Economy, Business And Markets

China to Clear Iran Debt

China to Clear Iran Debt China to Clear Iran Debt

Chairman of Iran-China Joint Chamber of Commerce Asadollah Asgar-Oladi said that China has to finance several Iranian projects and continues to do so.

"We agreed to receive our money in the form of goods and finance,” the official explained as reported by Xinhua on Friday.

"The Bank of Industry and Mine, Parsian, and Pasargad banks are currently working in this regard," the official explained.

In November 2013, Iran announced that about $30 billion of its oil revenues had been blocked by Chinese banks due to the sanctions imposed on Tehran’s banking system.            

The two countries agreed over Chinese companies’ financing of Iranian projects as an approach to return the blocked assets and clear the debts.

In December 2013, Asgaroladi announced that the annual trade between Iran and China may reach $38bn by the end of the current Iranian calendar year (which started March 21, 2014).

According to Iran’s Customs Administration, the country’s total non-oil exports to foreign countries (excluding gas condensates) stood at $31.3bn in the previous year (which ended on March 20), while the country’s total imports amounted to $50.8bn

In November, reports emanating from different government departments on large-scale developments using Chinese finance began to surface, the most high profile of which was the Tehran-Caspian Sea highway.

The by-pass would ultimately connect western Tehran to the towns and cities of the Caspian Sea via a dual-carriage way system.

The highway project which began over 20 years ago has been halted on many occasions due to lack of funds and capable engineers to break through the Alborz mountain range.

The project, when completed, will commence in conjunction with Chinese finance and engineering services which will cost roughly $3.5bn. The resumption of the Caspian Sea highway has now become one of the main priorities of the current government.