Iran’s commercial exchanges with its leading trade partner, China, reached $13.34 billion during the first 10 months of 2022, registering a 14.8% rise compared with the corresponding period of the year before.
Latest data released by China’s General Administration of Customs show Iran’s exports totaled $5.72 billion during the period, indicating a 9.1% year-on-year increase.
In return, China exported $7.61 billion worth of goods to Iran, registering a 19.5% YOY rise.
Bilateral trade hit $1.03 billion in October 2022 with Iran’s exports at $364.87 million and imports at $673.61 million.
According to China’s General Administration of Customs, Iran’s trade with China in 2021 stood at $14.78 billion, registering a 1% decrease compared with the year before.
Iran’s exports totaled $6.5 billion last year, indicating a 0.9% year-on-year increase, while China exported $8.28 billion worth of commodities to Iran, registering a 2.5% YOY decrease.
25-Year Cooperation Deal
China and Iran have announced plans to strengthen ties in the fields of energy and infrastructure, as they have launched a 25-year cooperation agreement.
The landmark agreement, which was signed in March last year and entered into force on Jan. 14, will see the two countries expand cooperation in the fields of energy, infrastructure, production capacity, science, technology, medicine and healthcare, according to a statement from China’s Foreign Ministry.
Bilateral cooperation will also be expanded to third-party markets in the fields of agriculture, fisheries and cybersecurity.
Iran’s Foreign Minister Hossein Amir-Abdollahian told China’s state news agency Xinhua that Tehran “looks forward to learning from China’s development experience and advanced technology”.
Wang also reiterated China’s position on Iran’s nuclear deal, to which it is a signatory, saying the US bore most of the responsibility for months of stagnation in talks about reviving the deal, as it unilaterally quit the same in 2018.
The cooperation document was discussed for the first time in 2015, when Chinese President Xi Jinping visited Iran. The agreement reportedly pledges Chinese investments of $400–600 billion.
Accession to SCO
A memorandum of obligations on Iran's Shanghai Cooperation Organization membership was signed at the 22nd meeting of the Council of Heads of State of SCO held on Sept. 16.
China congratulated Iran on its upcoming full membership in SCO and said it is willing to strengthen coordination and cooperation within the SCO framework, Chinese President Xi Jinping said in a meeting with Iranian President Ebrahim Raisi on Friday morning.
Xi stressed that China supports Iran in safeguarding its national sovereignty and national dignity, and is willing to work with Iran to uphold the principle of non-interference in internal affairs and safeguard the common interests of developing countries.
Iran's Foreign Ministry Spokesperson Nasser Kanani praised the signing of the memorandum, saying that it was "another important and lasting development in strengthening good neighborhood policy and regional convergence, and deepening multilateralism”.
Iran’s permanent membership was approved during the 21st meeting of the Council of Heads of State of SCO in the Tajik capital Dushanbe in September 2021. The country obtained observer status in the organization in June 2005 and applied for full membership in 2008.
SCO is a Eurasian political, economic and security organization founded in 2001. The current members of the organization are China, India, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan. The observer countries are Afghanistan, Belarus, Iran and Mongolia while partner countries are Armenia, Azerbaijan, Cambodia, Nepal, Turkey and Sri Lanka. The current SCO summit in Samarkand, Uzbekistan, is expected to finalize the admission of Iran and grant the status of a dialogue partner to Egypt, Qatar and Saudi Arabia.
“This is a very important day for Iran and SCO,” SCO Secretary-General Zhang Ming told reporters at the signing ceremony.
"The Iranian entry into the group of member states will strengthen the Shanghai Cooperation Organization," he said.
Russian presidential aide, Yury Ushakov, said Iran will be able to participate in the SCO summit as a full member of the organization as early as next year.
"Iran will participate as a full member already at the next summit, which will be held in India in 2023 … There will be nine members," he added.
Acceptance of Iran as a full member of SCO will open up a new horizon of multilateralism, reads an article published by The Diplomat.
“It will be beneficial not only for Iran but for the whole region. Many analysts argued that even if Iran may not be able to reap many immediate benefits from joining the SCO, it indicates Iran’s willingness to pursue stronger relations with China and Russia, the organization’s two most powerful members,” the article said.
“China and Iran have established a wide-ranging and close relationship over the past few decades, with focus on China’s energy requirements and Iran’s resources in addition to considerable non-energy economic links, arms sales, defense cooperation and geostrategic balancing with the United States … Joining SCO is a success for Iran on both economic as well as political fronts. Since 2018, when the US ex-president, Donald Trump, pulled out of Tehran’s nuclear agreement with major powers, including Russia and China, the Iranian economy suffered critically. Therefore, inclusion in SCO will open up new avenues for trade and cooperation with neighboring states which, in return, help Iran to solve its economic challenges.”
Another article published by Observer Research Foundation says Iran’s short-term gains from this membership is political rather than economic.
"The fact is that Iran perceives its accession to SCO as leverage against the US at a time when nuclear talks are on the verge of collapse. SCO member states are reluctant to engage in Iran-US hostility; they also accepted Saudi Arabia, Qatar and Egypt as ‘dialogue partners’ in a balancing effort. This is also true for Russian efforts to highlight the anti-Western geopolitical identity of SCO, as member states remain divided over Russia’s invasion of Ukraine. At least in the short run, SCO is unlikely to offer any efficient alternative mechanism to meet Iran’s economic and security priorities, as long as sanctions and hostility with the West remain. However, the SCO membership brings Iran a degree of international prestige and political leverage to strengthen its bargaining power in negotiating with the US,” the article said.
Mohammad Lahouti, the head of Iran Export Confederation, said Iran’s accession to SCO is a watershed event for diplomacy, which can open up new frontiers for the country’s economy.
“Iran has unparalleled capacities through which cooperation with SCO members can be facilitated. The country is located on corridors linking north to south and west to east; Iran remains the most important corridor to cross West Asia, although many countries tried to replace it over the years,” he said.
“According to statistics, the country has one of the largest global oil and gas reserves needed by China and India, two key members of SCO.”
However, Mohsen Jalalpour, former president of Iran Chamber of Commerce, Industries, Mines and Agriculture, is ambivalent.
“Is accession to SCO a really historic event? I personally believe it is; such developments are very important for Iran’s economy; they shouldn’t be regarded in passing. Yet, what is central is whether the country will be able to tap into such opportunities. Therefore, the event per se is significant but we probably won’t achieve the favorable outcome,” he wrote for the Persian economic daily Donya-e-Eqtesad.
“Where does my pessimism come from? The fact of the matter is that in the past few years, we did not forge any economic ties with any, I repeat, any country. Our relations, even with our neighbors were based on security and political issues. I urge you to think twice if you think I’m wrong. In relation with what country, did economic issues take precedence?”
An Op-Ed published by Responsible Statecraft believes the membership marks the end of Iran’s isolation.
“Membership will grant Tehran top-level contacts and economic cooperation with Russia, China, India, Pakistan and several Central Asian countries — nearly half the population of the world, making up 28% of the global GDP … Though Iran is not so confident as to feel insulated from US sanctions, and though they may hope to keep the door to the West open, Iran’s choice may no longer be capitulation or isolation. The intended isolation of Iran, which has largely focused on sealing off the country’s western border, has caused a very large leak in the eastern one. And Iran is not just breaking out of isolation globally in the East; they are also breaking out regionally in the Middle East,” it said.
Iran has historically been a trading nation, Vienna-based strategy consultant Bijan Khajehpour told Responsible Statecraft.
“Sanctions disrupted the trade patterns, but Iran’s response to the US maximum pressure has been to focus on its immediate neighbors as well as on Eastern powers. The policy is primarily driven by security as well as economic imperatives. A full SCO membership will further facilitate Iran’s trade with Asian powers and Russia, compensating for the decline in trade with the EU, which has decreased due to US sanctions,” he said.
It is not yet known whether Iran and the United States will return to the JCPOA nuclear agreement. Nevertheless, whether they do or not, it appears that Iran’s international isolation is nearing an end,” read an Op-Ed published by Responsible Statecraft, as Iran signed a memorandum of obligations to become a permanent member of the Shanghai Cooperation Organization.
At a meeting in April 2023, full membership will be finalized. As a result, Iran will join an organization that represents 43% of the world’s population, making it the second largest international organization after the UN.
“SCO has also become a high priority for both Russia and China. Its purpose is to act as an economic and foreign-policy counterweight to the US-led unipolar world … Even if the negotiations to restart the JCPOA nuclear deal fall through and Western sanctions remain in place, the isolation of Iran may be over,” the article concluded.
