Iran and China traded 30.12 million tons of non-oil goods worth $18.71 billion in the year ending March 20, 2021.
This makes China the top trading partner of Iran, even though figures indicate a decline in the volume of their bilateral trade.
According to the Islamic Republic of Iran Customs Administration, China accounted for 26% of Iran's total non-oil exports, as 26.58 million tons of non-oil goods worth $8.95 billion were shipped from Iran to China during the period.
Pistachio, nuts, minerals, construction materials, methanol, carpet, iron ore, glassware and fruits were the main types of goods exported from Iran to China in the last fiscal year.
Imports from China totaled 3.54 million tons worth $9.76 billion during the year to March 21, 2021, to account for 10.6% of the total volume of Iran's imports and 25.3% of the total value of imports during the period.
Industrial machinery and raw materials, medical equipment, paper, wood, textile, auto parts and sports equipment were Iran's main imports from the South Asian state in the fiscal 2020-21.
10% Decline
Iran’s non-oil trade with the East Asian country declined by over 10% last year, as bilateral trade totaled $20.82 billion in the year ending March 20, 2020.
The decline in Iran’s petroleum exports to China and the drop in oil prices were the key factors contributing to the decline in Iran-China trade. Issues between Hong Kong and China also reduced trade between Iran and China, since many Iranian businesses used to export goods to China through Hong Kong.
The Iranian side of Iran-China Chamber of Commerce late last year held a virtual meeting titled "Iran-China Commercial Ties in 2020 and the Prospect of Economic Relations in 2021", in the presence of Iran's Ambassador to China Mohammad Keshavarz-Zadeh.
“The government needs to be more determined about boosting trade ties with China,” Majid Reza Hariri, the head of the joint chamber, said at the meeting, calling on officials to take counter-measures against the negative atmosphere surrounding the two countries' businesses.
"There is a huge market for Iran-made agricultural products, dairy products and seafood … This is a great opportunity for our country," the chamber’s website quoted him as saying.
Keshavarz-Zadeh noted that despite the outbreak of Covid-19, Iran has been pursuing the implementation of the 25-year strategic cooperation plan with China.
He also called for the marketing of Iranian goods in China, stressing that Iranian businesses need to provide detailed information about Iranian goods, if they plan to export to China.
“Global trade has dropped by 30% following the outbreak of coronavirus and Iran was no exception. Seven countries, including China, Iraq, Afghanistan, the UAE and India, account for 75% of our foreign trade; over 50% of Iran’s non-oil exports are headed to Iraq and China, all indicative of our export vulnerability," Hariri said recently.
“Natural gas, gas condensates, petrochemicals and unprocessed minerals make up 70% of Iran's exports. Covid-19 has pushed down the demand for and the prices of these export items. For our production lines to remain operational, about $45 billion worth of essential goods, pharmaceuticals and medical equipment need to be imported. Given the restrictions placed on oil sales, this figure seems to be unreachable.”
Earlier, Pedram Soltani, a member of Iran Chamber of Commerce, Industries, Mines and Agriculture board of directors, had said Iran has to prepare for a 30% decline in export value in the fiscal 2010-21 compared with the previous year due to the impacts of the spread of the novel coronavirus on national and international trade.
“Under the current circumstances, it is estimated that the country’s exports will fall between $10-12 billion compared with last year. The main products that will experience a plunge due to the pandemic are petrochemicals, steel, mineral products, tile and ceramics and nuts,” he was quoted as saying by ISNA.
Soltani added that China is most likely the least affected economy by the pandemic and since it is Iran’s top trading partner, exports to this country will hopefully remain unaffected.
“Yet, the outbreak of Covid-19 as well as the nosedive in oil prices will make Iraq, our second biggest export destination, very cautious and we will be facing limitations on the commodities we can export to the neighboring country,” he added.
Soltani noted that based on World Trade Organization’s prediction, world trade will see a 13-32% plunge in 2020 (best- and worst-case scenarios), noting that it is likely that the economic crisis awaiting the world now will be more intense than the one experienced in 2008.
25-Year Cooperation Agreement
Iranian Foreign Minister Mohammad Javad Zarif and his Chinese counterpart Wang Yi signed the Iran-China comprehensive cooperation document in a meeting in Tehran on March 27, IRNA reported.
The cooperation document had for the first time been discussed in 2015, when Chinese President Xi Jinping visited Iran.
In addition to his Iranian counterpart, Wang met Iran's President Hassan Rouhani and Ali Larijani, the advisor to Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei.
Wang and Zarif held consultations on bilateral and international issues and explored long-term cooperation and implementation of comprehensive strategic partnership in the meeting.
“Relations between the two countries have now reached the level of strategic partnership and China seeks to comprehensively improve relations with Iran,” Wang was quoted as telling Zarif.
“Our relations with Iran will not be affected by the current situation, but will be permanent and strategic,” Wang said ahead of the televised signing ceremony referring to US sanctions.
Larijani said in his meeting with the Chinese FM: “Iran decides independently on its relations with other countries and is not like some countries that change their position with one phone call.”
The accord brings Iran into China’s Belt and Road Initiative, a multi-trillion-dollar infrastructure scheme intended to stretch from East Asia to Europe, according to Reuters.
The project aims to significantly expand China’s economic and political influence, and has raised concerns in the United States.
China has spoken out often against US sanctions on Iran and partly contested them. Zarif called it “a friend for hard times”.
The agreement includes Chinese investments in sectors such as energy and infrastructure.
Rouhani expressed appreciation of Beijing’s support for Iran’s position over its 2015 nuclear deal with world powers, in which it agreed to curb its nuclear program in return for the lifting of international sanctions.
“Cooperation between the two countries is very important for the implementation of the nuclear accord and the fulfilment of obligations by European countries,” he said.
US President Joe Biden has sought to revive talks with Iran on the nuclear deal abandoned in 2018 by his predecessor, Donald Trump in 2018. Tehran demands the removal of sanctions Trump imposed before any negotiations resume.
“Under the new administration, the Americans want to reconsider their policy and return to the nuclear accord, and China welcomes their move,” Wang said.
He also promised that China would provide more coronavirus vaccines to Iran, the Middle Eastern country worst-hit by the pandemic.
Iranian Foreign Ministry Spokesman Saeed Khatibzadeh said the agreement was a “roadmap” for trade and economic and transportation cooperation, with special focus on both countries’ private sectors.
According to the American Enterprise Institute, China invested $26.92 billion in Iran from 2005 to 2019.
Of the total investment, $1.53 billion were made in chemical industries, $11.1 billion in energy, $4.96 billion in metals, $160 million in real estate, $6.92 billion in transport and $2.25 billion in utilities.
The value of China’s overseas investment and construction combined since 2005 exceeds $2 trillion.
Iran-China trade has fallen recently due to the outbreak of coronavirus. However, the two sides are taking all necessary measures to boost their trade turnover back to its pre-corona levels.
