Amir Sameni
More than four years have passed since Iran and China signed their 25-year Comprehensive Cooperation Program in early 2021—an agreement whose roots go back to the JCPOA (2015 Iran nuclear deal) period and Tehran’s attempt to pursue a “positive balance” diplomacy.
Initial expectations assumed that China would invest up to $400 billion in Iran under this framework. Yet official data tell a very different story: between 2005 and 2025, China’s total direct investment in Iran amounts to only $4.7 billion, with roughly $2 billion occurring after the signing of the agreement.
Over the same period, Beijing injected hundreds of billions of dollars into Pakistan, Iraq, the UAE and Saudi Arabia—equivalent to 30 to 40 times its investment in Iran. According to 2024 data from Shanghai University, bilateral trade has also halved over the past decade, despite the stated intention of both countries to expand cooperation.
These outcomes point to a clear conclusion: the architecture of Iran–China economic cooperation has not been successful.
Common explanations include sanctions, banking restrictions, settlement obstacles, policy instability and Iran’s inability to provide credible guarantees for Chinese investment. Yet the deeper cause lies in flawed policy design and persistent misunderstandings about China’s priorities, sensitivities and economic structure.
Outdated Lens
Iranian decision-makers have often viewed China through a narrow and outdated lens—as a source of cheap goods—while overlooking its transformation into an innovation-driven global power, the first trading partner of more than 100 countries and a major lender with over $2.2 trillion in loans extended worldwide over two decades.
This misalignment has also shaped Iran’s interpretation of the 25-year agreement. Tehran has frequently framed it as a strategic partnership implying shared risks and benefits. Beijing, however, views it as a non-binding strategic cooperation framework—far less substantial than China’s stable institutional partnerships with Pakistan, Saudi Arabia or other Persian Gulf states.
Part of this gap stems from differing approaches to the global order: Iran’s slow policy adjustments and limited flexibility contrast with China’s preference for rapid, predictable and stability-enhancing engagement. Moreover, China’s experience over two decades suggests that Iran’s approach has been episodic and reactive to US sanctions pressure; whenever sanctions ease, Iranian enthusiasm for deeper cooperation wavers.
Given diminished prospects for resolving Iran’s nuclear dispute and reducing tensions with the West, Tehran has little choice but to define a more coherent, long-term and credible cooperation framework with China.
Essential Adjustments
Such a framework must prioritize Iran’s urgent needs for capital and technology while providing guarantees and predictability to Chinese investors. Beyond this strategic shift, several operational adjustments are essential.
First, unlike Iran’s highly public approach, China avoids broad publicity for agreements and initiatives. Second, cooperation should not be limited to Beijing; China’s vast network of provincial economic hubs requires Iran to deploy skilled private-sector economic advisers across multiple provinces. Third, Iran must redefine its economic role within China’s Belt and Road Initiative, including potential integration with the China–Pakistan Economic Corridor and deeper involvement in the Shanghai Cooperation Organization. Fourth, both sides must address the mutual misperceptions amplified by media environments in each country. Finally, Iran must design a new institutional mechanism aligned with China’s National Development and Reform Commission (NDRC), rather than relying solely on its Foreign Ministry–led structure, which has proven insufficient in coordination and follow-through.
A more realistic, structured and trust-building approach is essential if Iran seeks to translate political goodwill into meaningful economic outcomes with China.
