By Emma Scott | Affiliate Researcher - Centre of Chinese Studies - Stellenbosch University - South Africa
Middle East Institute | Apr 06, 2016
This essay examines China-Iran trade relations, as well as Chinese
investments in Iran. Particularly, it asks whether the stated
Chinese-Iranian ambition to increase the value of bilateral trade to
$600 billion within a decade is attainable. Additionally, it identifies
the factors responsible for the trade deficit in Iran’s favor, and shows
that the pace of China’s foreign direct investment (F.D.I) in Iran is
slowing in spite of absolute increases.
The Iran-China commercial relationship has developed considerably
since 1979, when China adopted its Open Door Policy and the Iranian
Revolution took place. Within a decade, the volume of bilateral trade
rose to approximately $400 million.
By 2014, the value of bilateral trade had reached $51.8 billion (see
Chart 1). The growth of the Iran-China Chamber of Commerce and
Industries (I.C.C.C.I.), from 65 members in 2001 to 6,000 today furnishes additional evidence of the expansion of the relationship.
Against this backdrop, during his January 22-23, 2016 visit to Iran,
President Xi Jinping confidently pledged to promote trade ties to the
value of $600 billion in ten years. But is this objective attainable? One way to find out is by putting this figure in perspective.