China’s investment in Iran has increased by 20-fold in the past four years, according to Iranian officials, and many see this figure as an indicator of just how good relations are between the Caspian country and the East Asian giant.
“The Chinese companies had near $2.3 billion of direct investment in Iran from 2014 till 2018, while the amount of [the Chinese] investments was $110 million from 1996 till 2014.” Mohammad Khazaie, an Iranian deputy economics minister who also serves as the head of the Iranian Investment Organization, said while addressing the third China-Iran Trade and Investment Opportunities Conference held in Tehran on January 30.
Khazaie also noted that there is $10 billion worth of financing between the two countries, adding that Chinese companies have provided $11 billion dollars of foreign investment to Iranian projects, Iran’s state news agency IRNA reported.
Simultaneously, China also reopened Iranian nationals' bank accounts in spite of U.S. pressures on Chinese banks to find out identities of their customers. Chinese officials started putting restrictions on Iranian nationals' bank accounts a few months ago, saying that the country was to follow international laws concerning money laundering and financial aid to terrorism via suspicious bank accounts.
“Reopening of the bank accounts of the Iranians, many owners of which are traders and university students, started a week ago, after intensive talks held between the Iranian and the Chinese sides,” Hossein Yaqoubi, the Director General of the International Affairs Department at Iran’s Central Bank told IRNA on January 30.
Despite lifting of the anti-Iran sanctions, where China also played a leading role in the signing of the 2015 Joint Comprehensive Plan of Action, better known as the nuclear agreement, the U.S. under the Trump administration is accused of hindering implementation of the deal.
Since the lifting of the nuclear-related sanctions in January 2016, China has opened up two credit lines worth $4.2 billion to build high-speed railway line that will link the Iranian cities of Tehran to Mashhad, located in Iran’s northeast, as well as Isfahan, in the country’s center.
“The volume of trade between the two countries was about $40 billion in 2017, and I hope that this volume will increase to $50 billion in 2018,” the chairman of the Iran-China Joint Chamber of Commerce Asadollah Asgaroladi said, according to Fars news agency. In January 2016, Chinese leader Xi Jinping and Iran’s President Hassan Rouhani agreed to increase trade to $600 billion over the next ten years.
China is Iran’s biggest oil customer, supplying Asia’s largest economy with eight percent of its gas and oil needs. In 2017, trade between Iran and China grew by 22 percent compared to 2016 figures, or $31.24 billion, reaching about $40 billion. At the same time, China is a major supplier of advanced weapons to Iran, including anti-ship cruise missiles, and has reportedly assisted Iran’s development of land attack cruise missiles.
Iran and China will also cooperate in the “One Belt, One Road” initiative, the world's largest global trade network, stretching from China to Europe, including the construction of a high-speed railway in Iran.