Iran’s commercial exchanges with its leading trade partner, China, reached $7.53 billion during the first half of 2023, registering an 8.1% decrease compared with the corresponding period of the year before.
Latest data released by China’s General Administration of Customs show Iran’s exports totaled $2.2 billion during the six-month period ending June, indicating a 45.8% year-on-year fall.
In return, China exported $5.32 billion worth of goods to Iran, registering a 29.1% increase.
Bilateral trade hit $1.09 billion in June 2023 with Iran’s exports at $308.7 million and imports at $788.65 million.
Iran’s trade with China in 2022 stood at $15.79 billion, registering a 7% increase compared with the year before. Iranian exports totaled $6.35 billion last year, indicating a 2.3% year-on-year decrease, while China exported $9.44 billion worth of commodities to Iran, registering a 14.3% increase.
China has been the biggest destination for Iran’s exports of minerals and mining products in terms of value in recent years, new data released by the Iranian Mines and Mining Industries Development and Renovation Organization show.
Total exports stood at 48.69 million tons worth $12.24 billion in the last Iranian year (March 2022-23).
With over 10.94 million tons worth $2.9 billion, China accounted for 22.5% of weight and 23.7% of value of last year’s total exports respectively.
China has remained Iran's largest trading partner for 10 consecutive years ending 2022, according to the Chinese Ministry of Commerce.
Iran’s President Ebrahim Raisi paid a three-day state visit to China starting Feb. 14. During the visit, Tehran and Beijing signed a number of bilateral cooperation documents in the fields of agriculture, trade, tourism, environmental protection, health, disaster relief, culture and sports, Xinhua reported.
Chinese President Xi Jinping met with Raisi in Beijing where the two leaders agreed on deepening China-Iran comprehensive strategic partnership.
“Beijing will unswervingly develop friendly cooperation with Iran, regardless of how the international and regional situation changes,” the Chinese president said.
“China has always viewed and developed its relations with Iran from a strategic perspective.”
The Iranian president headed a delegation, including the new central bank governor and six members of Raisi's Cabinet, including the ministers of economy, petroleum, foreign affairs and trade.
The documents would include agreements in the field of transportation worth $12 billion, which include projects like the high-speed rail link between Tehran and Mashhad, and investment in the Imam Khomeini Airport City.
Investment in Iran's southeastern Makran Coast and the purchase of Iranian oil are also included in the documents, Caspian News reported.
Raisi's visit serves as an example of the high level of mutual trust between China and Iran, as well as a milestone in their bilateral ties, CGTN wrote.
During Raisi's visit, China and Iran exchanged views on promoting bilateral economic and trade relations, and reached a series of positive results.
China has announced its willingness to work with Iran to implement the important consensus reached by the two heads of state in economic and trade fields, deepen pragmatic cooperation in other fields, import more Iranian products and continue cooperation in building the Belt and Road Initiative.
It has promised to strengthen multilateral cooperation between the two countries under the framework of Shanghai Cooperation Organization and inject new growth impetus into deepening the China-Iran comprehensive strategic partnership.
Iran’s Accession to SCO
On July 4, Iran officially became a full member of the Shanghai Cooperation Organization during a virtual summit hosted by India for the SCO Heads of State Council.
“The Shanghai Cooperation Organization is of great importance for Iran, and Tehran’s effort to finalize its membership is regarded a significant measure in the field of diplomacy,” Mohammad Lahouti, the head of Iran Export Confederation, said in an interview with the Public Relations Office of Tehran Chamber of Commerce.
According to the official, SCO members own a third of the world's land and soil, 43% of the world's population and 25% of the world's gross product, which indicate the significance of this organization at the international level.
Recalling the government's general policy of focusing as much as possible on trade with neighbors and looking to the East instead of focusing on trade with the West, Lahouti said, “Iran's membership in SCO will facilitate trade with some countries, but we cannot expect miracles with regard to commercial obstacles currently facing Iran's foreign trade due to sanctions.”
The IEC chief noted that Iran's isolation from the international economy has created problems for businessmen and economic players, saying that alongside interaction with the world's major economies in the form of Shanghai Treaty, efforts should be made to remove restrictions caused by sanctions in foreign trade.
“Iran's trade with the member countries of Shanghai Treaty is very small compared to the volume of trade these countries have with the world. Last year, more than 50.6 million tons of goods were exchanged between Iran and 11 member countries of the Shanghai Cooperation Organization. Therefore, we must have an action plan for these countries,” he said.
According to the official, Iran’s trade with SCO member states in the fiscal 2022-23 recorded a rise of 6.5% compared with the previous year, and the import share of this volume of trade, with a growth of 34%, was about 8.9 million tons.
Afghanistan was among the top five export destinations of Iranian goods worth $1.48 billion among the member countries.
Among the potential benefits of Iran’s membership, Lahouti referred to the development of employment and investment, neutralization of sanctions, removal of obstacles in the way of financial and economic exchanges and the preparation of grounds for the use of regional currencies instead of the US dollar.
“To achieve these goals, the support and cooperation of private and public sectors as well as the public with the government is essential,” he added.
According to the IEC chief, Iran has been an observer member of SCO since 2005, and by joining the organization as a permanent member, the country can hope to boost the level of foreign trade with member states such as China, Russia and India, as three major economic powers.
“It will also be possible to firmly withstand the restrictions imposed by Europe and US against Iran's economy. However, it should not be forgotten that Iran's extensive interactions at different political levels with other countries should be put on the agenda as a strategic solution by Iran in the international arena,” he said.
Stressing the significant weight of SCO at the international level, Lahouti stressed that four of the world's nuclear powers, namely Russia, China, India and Pakistan, are members of this treaty while China and Russia, which are among the five permanent members of the UN Security Council, are also the main pillars of the said agreement.
“This is sufficient for any observer to understand why the Shanghai Cooperation Organization is important beyond a regional security organization,” he said.
He added that Iran's role in the One Belt, One Road project and the 25-year cooperation document between Iran and China can also serve as a supplement to this agreement.
“At the same time, by being a permanent member of this organization, Iran is also linked to the vast markets of SCO member countries and as a regional power, it can have positive economic interactions with these countries in various fields of trade, transit and energy. Considering that recently Iran became an observer member of the Eurasian Economic Union, participation in the Shanghai Cooperation Organization can complement the process for Iran to use the economic capacities of regional countries that account for 65% of the world's population and extensive global resources,” he said.
Lahouti concluded that it is also important for SCO members to work with a power like Iran, which has vast resources for economic cooperation and is a bridge between East and West Asia as well as North and South.
“Tehran's closer collaboration with the Shanghai Cooperation Organization and Iran’s more pronounced role on the Silk Road will be beneficial for all parties,” he said.
