Iran’s commercial exchanges with its leading trading partner, China, stood at $4.32 billion in the first four months of 2021, registering a 17.6% decline compared with the corresponding period of 2020, the lowest in the past five years.
As per the data provided by the General Administration of Customs of the People’s Republic of China show, Iran’s exports to China totaled $1.97 billion, indicating a 15.6% decrease year-on-year.
In return, China exported $2.35 billion worth of commodities to Iran, indicating a 19.1% decrease compared with the same period of last year.
The decline in Iran-China trade is mainly due to the outbreak of the new coronavirus, but the two sides are taking measures to boost their trade turnover to its pre-coronavirus levels.
Trade between the two countries stood at $1.06 million in April 2021, 24.03% less than the $1.32 billion notched in April 2020.
Iran’s exports to China amounted to $499.7 million during the month. The volume stood at $526.2 million during the corresponding period of last year.
The country’s imports from China amounted to $566.4 million in April 2021, which figure stood at $796 million in April 2020.
Their four-month trade hit $13.3 billion in 2018. However, it declined by 32% to $8.8 billion in 2019, after the unruly reimposition of US sanctions against Iran and America's unilateral withdrawal from the landmark nuclear agreement.
The Iranian side of Iran-China Chamber of Commerce recently organized 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.
Majid Reza Hariri, the head of the joint chamber, said at the meeting that the government needs to be more determined about boosting trade ties with China, calling on officials to take counter-measures against the negative atmosphere surrounding their businesses.
"There is a huge market for Iranian agricultural, dairy and seafood products … This is a great opportunity for our country," the chamber’s website quoted the ambassador as saying.
"Despite the outbreak of Covid-19, we have been pursuing the implementation of Iran-China 25-year strategic cooperation plan."
Keshavarz-Zadeh also called for marketing Iranian goods in China, urging Iranian businesses to provide detailed information about Iranian goods, if they are planning 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.
“Natural gas, gas condensates, petrochemicals and unprocessed minerals make up 70% of Iran's exports. Covid-19 has lowered the demand for and the prices of these export items.”
IRICA’s Fiscal 2020-21 Data
According to the Islamic Republic of Iran Customs Administration, Iran traded $18.66 billion worth of goods in the last Iranian year that ended on March 2021.
Iran’s total non-oil trade stood at 145.7 million tons worth $73 billion in March 2020-21 fiscal year.
According to Mehdi Mirashrafi, the head of Islamic Republic of Iran Customs Administration, exports accounted for 112 million tons worth $34.52 billion and imports constituted 34.4 million tons worth $38.5 billion of the sum.
Iran’s main exports included gasoline, natural gas, polyethylene, propane and pistachio, with the latter alone earning $1.2 billion.
The main export destinations were China with 26.6 million tons worth $8.9 billion, Iraq with 25.6 million tons worth $7.3 billion, the UAE with 15.2 million tons worth $4.6 billion, Turkey with 6.3 million tons worth $2.5 billion and Afghanistan with 7 million tons worth $2.2 billion. These five countries imported more than 80 million tons of non-oil goods worth $25.7 billion. Mehr News Agency reported.
China, Iran’s biggest trading partner, 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 20, 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.
“Iran’s foreign trade reduced by 25 million tons due to sanctions and the Covid-19 pandemic,” the IRICA chief said, adding that the country’s trade deficit stood at $4 billion.
Mirashrafi noted that 23.1 million tons of essential goods, including corn, cellphones, rice, soybean meal, oilseeds, wheat and unprocessed oils, worth $12 billion were imported during the period under review.
Iran imported 3.5 million tons of essential goods worth $9.7 billion from China, 5 million tons worth $9.6 billion from the UAE, $4.3 billion from Turkey, 2.2 million tons worth $2.1 billion from India and 1.2 million tons worth $1.8 billion from Germany in the year to March 20.
Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.
25-Year Cooperation Agreement
Iran’s 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 had 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, which 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 appreciated Beijing’s support for Iran’s position on 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 added.
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 wants the sanctions imposed by Trump removed before any direct negotiations could 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.
Saeed Khatibzadeh, Iran’s Foreign Ministry spokesman, said the agreement was a “roadmap” for trade, economic and transportation cooperation, with a special focus on both countries’ private sectors.
China is willing to invest $400 billion in Iran’s economic sectors as part of its 25-Year Cooperation Agreement, some $80 billion of which are to be in the mining sector, according to the head of Mines and Mineral Industries Commission of Iran Chamber of Commerce, Industries, Mines and Agriculture.
“The significance of this amount becomes even more prominent when we take into account that over the last 95 years and since the reign of Reza Shah [the first Pahlavi monarch] up until now, investments made in Iran’s mines and mineral industries amount to $50 billion,” Bahram Shakouri was also quoted as saying by ILNA.
The official noted that absorbing this amount of Chinese investments can generate numerous jobs and expand the country’s production and exports.
“This can also affect developments in other fields such as infrastructures, transportation and ports.”
Customs Cooperation
Tehran and Beijing have signed an agreement to broaden cooperation in customs affairs for increasing trade between the two countries.
The agreement was signed on Wednesday between the IRICA chief and China’s Deputy Customs Commissioner-General Wang Lingjun during a videoconference, Fars News Agency reported.
Under the document, IRICA will introduce measures to facilitate customs inspections for certain companies certified and rated by the Chinese customs office. The Chinese authority will reciprocate the move for Iranian companies authorized by IRICA.
The IRICA chief said the agreement will help minimize customs procedures needed to clear goods exported by authorized merchants on the two sides.
That would lower the costs incurred by traders and speed up the process of releasing the cargoes, he added.
Mirashrafi said Iran and China would be able to further expand their customs ties in future, as part of a broader agreement signed earlier this year by Iranian and Chinese foreign ministers which sets out a roadmap for economic cooperation between the two countries for the next 25 years.
“It will be a good start for us so that we can have stronger and more sustainable customs ties with our top trading partner in future,” he said.
