People's Republic of China – Iran relations
Encyclopedia
People's Republic of China – Islamic Republic of Iran relations refers to the economic, political, and social relations between the modern nations of the People's Republic of China
and Iran
, from the 1950s to the present day. Both the pre-1979 revolution Pahlavi dynasty
of Iran and the post-revolutionary Islamic Republic of Iran have had diplomatic ties with China.
Although the relations between these two governments are relatively new, trade and diplomatic relations between the peoples and cultures within these two countries have existed since 200 BC (see Sino-Persian relations).
(CNPC) was granted an $85 million contract to drill 19 wells in the natural gas fields in Southern Iran and signed another similar $13 million contract. Then again in 2004, an agreement was reached where China would import 270 million tons of natural gas over 30 years from South Par fields which is the richest natural gas fields in the world for $70 billion. Another Chinese company, Sinopec Group, gets half-share in Yardarvaran oil fields worth about 100 billion for the purpose of exploration. Later in 2007, CNPC signed a $3.6 billion deal to develop offshore gas fields in Iran and then signed another $2 billion contract to develop the northern Iranian oil field near Ahvaz. < Not only is China helping to develop the oil and gas sector, but China supports Iran’s ambitions to bring Caspian Sea oil and gas to Southern Iranian ports through pipelines so the resources can be exported to Europe and Asia. Iran relies upon its oil sales to China to ensure its fiscal well-being. China also sells gasoline to Iran despite international pressures that have halted Iran’s ability to get gasoline from other suppliers.
China
finds in Iran
a permanent partner for its exports and a source for its growing energy demand. In March 2004, Zhuhai Zhenrong Corporation, a Chinese state-run company, signed a 25-year contract to import 110 million metric tons of Liquefied Natural Gas
(LNG) from Iran
. This was followed by another contract between Sinopec
and Iran LNG
, signed in October of the same year. The deal, worth $100 billion, adds an extra 250 million tons of LNG to China's energy supply, to be extracted from Iran's Yadavaran field
over a 25-year period. In January 2009, Iran and China signed a $1.76bn contract for the initial development of the North Azadegan oil field in western Iran. In March the two countries struck a three-year $3.39 billion deal to produce liquefied natural gas in Iran's mammoth South Pars
natural gas field. Because of its limited refining capacity Iran imports one third of its refined products such as petrol from China.
Ali Akbar Saheli, Iran's former representative to the International Atomic Energy Agency
, said that the two countries "mutually complement each other. They have industry and we have energy resources".
in 1980 since China was allies with both nations. China was able to remain outside of the conflict and push for a peaceful resolution to the conflict.
The political and economic ties between China and Iran are not ironclad. China has been careful in deals with Iran while simultaneously trying to not antagonize China’s relationship with the US. The cooperation emerges partly from Chinese and Iranian recognition as a fellow heir to a great civilization and because Iran has emerged as the regional leader in the Middle East. There is also a shared distrust of the United States. Some Chinese hold to the conspiracy theory that the US wants China to take on more international responsibility to entangle China in situations beyond its borders effectively limiting its reemergence as a great power nation. There is also Iranian admiration for China’s rapid economic growth. But with that growth, China has become the scapegoat for the problems in Iranian politics yet their economic contributions to Iran is appreciated and respected.
Iran can use its links with China to build more links across Asia while remaining insulated from US attack.
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
and Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
, from the 1950s to the present day. Both the pre-1979 revolution Pahlavi dynasty
Pahlavi dynasty
The Pahlavi dynasty consisted of two Iranian/Persian monarchs, father and son Reza Shah Pahlavi and Mohammad Reza Shah Pahlavi The Pahlavi dynasty consisted of two Iranian/Persian monarchs, father and son Reza Shah Pahlavi (reg. 1925–1941) and Mohammad Reza Shah Pahlavi The Pahlavi dynasty ...
of Iran and the post-revolutionary Islamic Republic of Iran have had diplomatic ties with China.
Although the relations between these two governments are relatively new, trade and diplomatic relations between the peoples and cultures within these two countries have existed since 200 BC (see Sino-Persian relations).
Oil & Gas
One of the main pillars of the relationship is oil and gas. China switched to petroleum primarily to get their energy supply off of coal. There was a rapid increase in oil importation from 1974 into the 1990s. Now, approximately 80% of China’s total imports from Iran are oil and the rest is mineral and chemical products. Because of this reliance on Iranian oil and gas, China is now investing in the modernization of Iran’s oil and gas sector to secure access to the resource. George L. Simpson Jr. (2010). “Russian and Chinese Support for Tehran” ’’ Middle East Quarterly’’ The China National Petroleum CorporationChina National Petroleum Corporation
China National Petroleum Corporation is a state-owned fuel-producing corporation and the largest integrated oil and gas company in the People's Republic of China...
(CNPC) was granted an $85 million contract to drill 19 wells in the natural gas fields in Southern Iran and signed another similar $13 million contract. Then again in 2004, an agreement was reached where China would import 270 million tons of natural gas over 30 years from South Par fields which is the richest natural gas fields in the world for $70 billion. Another Chinese company, Sinopec Group, gets half-share in Yardarvaran oil fields worth about 100 billion for the purpose of exploration. Later in 2007, CNPC signed a $3.6 billion deal to develop offshore gas fields in Iran and then signed another $2 billion contract to develop the northern Iranian oil field near Ahvaz. < Not only is China helping to develop the oil and gas sector, but China supports Iran’s ambitions to bring Caspian Sea oil and gas to Southern Iranian ports through pipelines so the resources can be exported to Europe and Asia. Iran relies upon its oil sales to China to ensure its fiscal well-being. China also sells gasoline to Iran despite international pressures that have halted Iran’s ability to get gasoline from other suppliers.
China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
finds in Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
a permanent partner for its exports and a source for its growing energy demand. In March 2004, Zhuhai Zhenrong Corporation, a Chinese state-run company, signed a 25-year contract to import 110 million metric tons of Liquefied Natural Gas
Liquefied natural gas
Liquefied natural gas or LNG is natural gas that has been converted temporarily to liquid form for ease of storage or transport....
(LNG) from Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
. This was followed by another contract between Sinopec
Sinopec
China Petroleum & Chemical Corporation Limited , or Sinopec Limited , is a majority owned subsidiary of state owned company Sinopec Group. Sinopec Limited is listed in Hong Kong and also trades in Shanghai and New York ....
and Iran LNG
Iran LNG
Iran LNG is a LNG plant under development at Tombak Port, approximately north of Assaluyeh Port and southeast of Kangan.-History:Construction of the LNG plant started in 2007...
, signed in October of the same year. The deal, worth $100 billion, adds an extra 250 million tons of LNG to China's energy supply, to be extracted from Iran's Yadavaran field
Yadavaran Field
Yadavaran Field oil field is one of the NIOC Recent Discoveries which is located in Khuzestan, Iran.The name is new, as the field is made up of two former fields, Koushk and Hosseinieh...
over a 25-year period. In January 2009, Iran and China signed a $1.76bn contract for the initial development of the North Azadegan oil field in western Iran. In March the two countries struck a three-year $3.39 billion deal to produce liquefied natural gas in Iran's mammoth South Pars
South Pars / North Dome Gas-Condensate field
The South Pars / North Dome field is a natural gas condensate field located in the Persian Gulf. It is the world's largest gas field, shared between Iran and Qatar...
natural gas field. Because of its limited refining capacity Iran imports one third of its refined products such as petrol from China.
Trade
There existed unofficial trade relations between Iran and China during the cold war and steadily increased. Trade reached 1.627 billion in the 1980’s and 15 billion in 2007. In 2001, the volume of trade between Iran and China stood at roughly $3.3 billion, and in 2005, the volume of Sino-Iranian trade hit US$ 9.2 billion. Iran's Deputy Minister of Commerce Mehdi Ghazanfari speculated that trade exchanges between Iran and China will exceed $25 billion in 2008. In 2005, exports from China represented 8.3% of the total import market in Iran, giving China the second largest share of the market after Germany. China's exports to Iran have experienced particularly rapid growth in the past five years, with China replacing Japan as the world's second largest exporter to Iran. Iran's imports from China rose by 360% between 2000 and 2005. China is now responsible for about 9.5% of all Iranian imports. In 1988, the Iranian market opened up to Chinese industry when the PRC began economic restructuring. Once profitable trade relations were established, the PRC invested in Tehran’s subway systems, dams, fishery, and cement factories while Iran helped supply China with the highly desire minerals coal, zinc, lead, and copper. < Trade between the two states also included power generation, mining, and transportation equipment along with arms and consumer goods such as electronics, auto parts, and toys. Iran–China trade value reached $30 billion in 2010 and is expected to increase to $50 billion by 2015.Ali Akbar Saheli, Iran's former representative to the International Atomic Energy Agency
International Atomic Energy Agency
The International Atomic Energy Agency is an international organization that seeks to promote the peaceful use of nuclear energy, and to inhibit its use for any military purpose, including nuclear weapons. The IAEA was established as an autonomous organization on 29 July 1957...
, said that the two countries "mutually complement each other. They have industry and we have energy resources".
Military
China is believed to have helped Iran militarily in the following areas: conduct training of high-level officials on advanced systems, provide technical support, supply specialty steel for missile construction, provide control technology for missile development, build a missile factory and test range. It is rumored that China is responsible for aiding in the development of advanced conventional weapons including surface-to-air missiles, combat aircrafts, radar systems, and fast-attack missile vessels. It wasn’t until the 1990’s that the relationship between China and Iran came under close scrutiny by the United States. From this scrutiny it became known that China was using North Korea to traffick arms during the Iran-Iraq war to avoid antagonizing the West but later cut out the middle man. In the years of 1984 – 1986, about $1-2 billion worth of arms sales occurred. And then in 1986, Iran obtained Chinese-made anti-shi surface-to-surface missiles that posed a threat to Persian Gulf shipping. In possessing these missiles, Iran is able to control the Straits of Hormuz and all of the naval trade to and from the Gulf countries. In later inquiries, it was discovered that China sold Iran precursor and dual-use chemicals and the technology and equipment needed to use them. In 1996, the Washington Post exposed that China was supplying chemical weapons plants in Iran that were destined for the Army. Arms exports began to steadily decline in the 1990’s yet China engaged in $400 million worth of arms transfer agreements with Iran. Sales increased to $600 million from 1997-2000. On average, it is estimated that China made $171 million per year in arms exports to Iran since 1982.Nuclear Weapons
Nuclear cooperation began in the 1980’s when China helped build a research reactor and supply four other research reactors. Continued aid came in the form of helping Iran construct a uranium hexafluoride enrichment plant near Isfahan and resume construction on a nuclear power plant at Bushehr that was left uncompleted by the French and the German. In 1991, nuclear exports to Iran were discovered by the International Atomic Energy Association which contained three types of uranium. A 1990 covert nuclear agreement was also discovered. This discovery was followed by an unprecedented nuclear cooperation agreement in 1992. The agreement was signed despite US protests to have China limit its nuclear cooperation with Iran. Direct nuclear cooperation has ended but there is speculation over whether there remains indirect nuclear cooperation. For example, in 2005, 7 Chinese firms were suspected of selling nuclear weapons technology and all 7 had sanctions places upon them. Those firms were banned from trading with the United States for two years. There also continues to be Chinese nuclear experts, scientists, and technicians present in Iran. Now, China opposes Iran’s production and possession of nuclear weapons but does not see the urgency to stop it.Politics & Ideology
Official diplomatic relations were established in 1971. Before 1971, an unofficial relationship existed out of necessity. From this emerged the current relationship. In the 1980’s, the shared ideological themes of anti-imperialism and third world solidarity helped solidify the relationship but they became allies as a way to counterbalance the Soviet Union and the United States during the Cold War. When the USSR signed the Soviet-Indian friendship treaty, the relationship became a way to counter increasing Russian influence in the Persian Gulf. But there remained some distance between Mao’s regime and that of the Shah because of ideology. The Shah was friendly towards the United States and Mao was communist. The Shah also feared that the relationship could rally his communist opposition. Once the Shah was overthrown during the Islamic Revolution, China quickly recognized the new government in 1979. China was put into a difficult situation during the Iran-Iraq WarIran-Iraq War
The Iran–Iraq War was an armed conflict between the armed forces of Iraq and Iran, lasting from September 1980 to August 1988, making it the longest conventional war of the twentieth century...
in 1980 since China was allies with both nations. China was able to remain outside of the conflict and push for a peaceful resolution to the conflict.
The political and economic ties between China and Iran are not ironclad. China has been careful in deals with Iran while simultaneously trying to not antagonize China’s relationship with the US. The cooperation emerges partly from Chinese and Iranian recognition as a fellow heir to a great civilization and because Iran has emerged as the regional leader in the Middle East. There is also a shared distrust of the United States. Some Chinese hold to the conspiracy theory that the US wants China to take on more international responsibility to entangle China in situations beyond its borders effectively limiting its reemergence as a great power nation. There is also Iranian admiration for China’s rapid economic growth. But with that growth, China has become the scapegoat for the problems in Iranian politics yet their economic contributions to Iran is appreciated and respected.
Iran can use its links with China to build more links across Asia while remaining insulated from US attack.