Tehran-Beijing trade channels stay open despite barriers
By Arash Nikpey
Member of Iran-China Joint Chamber of Commerce
China has been Iran’s largest trading partner in recent years, accounting for between 20% to 30% of Iran’s foreign trade annually. According to official statistics, China remains Iran’s top export destination and one of the largest sources of imports into the country.
Iran’s main exports to China consist of oil and petrochemical products, while imports from China include machinery, electronic equipment, auto parts, and consumer goods. As a result, the trade balance between the two countries has in most years leaned in Iran’s favor, largely due to the scale of oil, gas, and petrochemical exports to China.
However, reduced oil exports caused by sanctions, coupled with the forced discounts on sales stemming from those restrictions, along with the growth of consumer and industrial imports from China, have in some years pushed the balance toward either equilibrium or a deficit in China’s favor.
For instance, in 2023, overall bilateral trade stood at around $14.6 billion. Of that, Iran’s exports totaled $6.2 billion, while imports reached $8.4 billion, leaving Tehran with a trade deficit.
The main barriers to trade between Iran and China are sanctions and banking restrictions. Iran’s blocked access to the international financial system (SWIFT), US pressure on Chinese banks and firms to scale back dealings with Iran, and the need to get around oil sanctions through intermediaries all serve as major obstacles. High risks in money transfers further increase the cost of trade.
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