Iran Private Sector Makes Proposals to Sustain China Trade Relations

EghtesadOnline: Senior officials of Tehran Chamber of Commerce, Industries, Mines and Agriculture met with Chinese counterparts and made proposals to maintain trade with the major partner in the face of reimposed US sanctions.

News ID: ۷۸۴۳۴۴

21 November 2018

A commercial delegation from the Chinese province of Hunan visited TCCIM headquarters in Tehran to discussed ways of boosting trade relations, the chamber's news website reported on Tuesday.

TCCIM Secretary-General Bahman Eshqi received the delegation and made the following three proposals to the Chinese counterpart:

First, China is among the eight nations that have received temporary reprieve from the United States to import Iranian oil and is expected to continue buying crude in earnest, Financial Tribune reported.

The second proposal dealt with creating a new money transfer channel.

Since the Bank of Kunlun has stopped working with Iranian banks, it is necessary that another bank be replaced with Kunlun as soon as possible.

Lastly, expansion of tourism ties will be a major means of boosting Iran-China ties.

Bank of Kunlun, the conduit facilitating Iran trade since 2006, said last month that it will no longer handle Iranian money from November.

Iranian private sector officials said China is looking to join the European Union's Special Purpose Vehicle—a barter trade clearing house aimed at maintaining trade with Iran. But as the implementation of SPV is facing hurdles, including where it will be based, it is becoming increasingly apparent that China needs to come up with a financial channel of its own to replace Kunlun and maintain trade with Iran.

Eshqi referred to a 2017 United Nations World Tourism Organization report that put China's tourism exports at $400 billion and predicted a $1.3 trillion turnover for 2020.

"Since the tourism industry is not directly hit by sanctions, if a portion of this capacity is tilted toward Iran, it can resolve some of Iran's foreign currency challenges without the need for a money transfer channel," he said.

The TCCIM chief pointed out that tourism expansion will also allow the younger generations of Iran and China to forge closer communication links. He said TCCIM is fully ready to help expand bilateral ties.

During the meeting, Eshqi also referred to centuries of shared history between Iran and China, and pointed out that both Beijing and Tehran wish to chart their own destiny and not allow the US to dictate terms.

Eshqi noted that since joining the World Trade Organization, China today is under the highest pressure from the US that has started a tariff war now amounting to $300 billion.

Like China, he said, Iran is now subject to most stringent US pressure in the form of economic sanctions reimposed after Trump unilaterally withdrew from Iran's nuclear deal with world powers.

"The US wishes to test the Europeans' resolve in trade ties with Iran and China's resolve in providing its energy requirements from Iran with its sanctions," he said.

Eshqi was confident that the historical cooperation between Iran and China can discourage the US from its hegemonic policies.

"Those who support Iran in the face of these unjust sanctions will stay with Iran in the future. We hope that China is one of those supporters," he said.

Yang Wi Gang, the head of Hunan Province's Permanent Committee, said China opposes unilateral US sanctions. He reassured that Iran plays an important role in China's Belt and Road Initiative.

The initiative, also known as Silk Road Economic Belt and the 21st-century Maritime Silk Road, is a development strategy adopted by the Chinese government involving infrastructure development and investments in European, Asian and African countries. "Belt" refers to the overland routes, or the Silk Road Economic Belt; whereas "road" refers to the sea routes, or the 21st-century Maritime Silk Road.

"We hope that as part of this major initiative, we can develop our trade and economic ties with Iran. We are interested in boosting relations with you," he said.

Yang concluded by presenting information about Hunan, saying it boasts a population of 73 million, is ranked ninth in China's overall economy and can cooperate with Iran in many areas, including bullet trains and agriculture.