January-May Trade With China Declines 14% to $5.4 Billion

EghtesadOnline: Iran’s commercial exchanges with its leading trading partner, China, stood at $5.49 billion in the first five months of 2021, to register a 14% decline compared with the corresponding period of 2020, the lowest in the past five years.

News ID: ۷۸۶۵۲۴

27 June 2021

As per the data provided by the General Administration of Customs of the People’s Republic of China show, Iran’s exports to China totaled $2.52 billion, indicating a 7% decrease year-on-year.

In return, China exported $2.95 billion worth of commodities to Iran, indicating a 19.1% YOY decrease.

The decline in Iran-China trade is mainly due to the outbreak of the new coronavirus, but the two sides are taking measures to boost trade turnover back to its pre-coronavirus levels.

Bilateral trade stood at $1.16 billion in May 2021.

Iran’s exports to China amounted to $551.3 million during the fifth month of the year. The volume stood at $370 million during the corresponding period of last year.

Iran’s imports from China amounted to $616.1 million in May 2021, which figure stood at $761 million in May 2020.

Iran-China trade reached a record high in 2018 but decreased in 2019, after the reimposition of US sanctions against Iran following the former US administration’s unilateral withdrawal from the nuclear deal, known as the Joint Comprehensive Plan of Action.

Iran and China traded 30.12 million tons of non-oil goods and commodities worth $18.71 billion in the last fiscal year (March 20-21). This put China at the top of Iran's trading partners, even though figures indicate a decline in bilateral trade.

China accounted for 26% of Iran's annual non-oil exports, as a total of 26.58 million tons of non-oil goods worth $8.95 billion were shipped from Iran to China during the period.

Pistachio, nuts, minerals, construction material, methanol, carpets, iron ore, glassware and fruits were the main types of goods exported from Iran to China last year.

Imports from China totaled 3.54 million tons worth $9.76 billion during the year to March 21, 2021, accounting for 10.6% of the total volume of Iran's imports and 25.3% of the total value of imports.

Industrial machinery, raw material, medical equipment, paper, wood, textile, auto parts and sport equipment were Iran's main imports from China.

Cooperation Under BRI

It is mutually beneficial to advance Iran-China cooperation within the framework of the Belt and Road Initiative, which could accelerate both Iran's development and the China-proposed initiative's implementation, an Iranian business leader told Xinhua in a recent interview.

The deepening of cooperation between Iran and China under BRI could help promote "the country's infrastructure, particularly in the transportation sector, such as roads, railroads, ports, airports and means of transportation" said Majidreza Hariri, president of the Iran-China Chamber of Commerce and Industries (ICCCI).

"Such collaborations would also help boost employment in Iran, which is one of the problems facing the country's youths as well as educated and skilled workforce," he added.

Hariri said Iran's participation in BRI will help develop the country's mining sector and increase their share in the domestic economy.

"Iran's ideal geographical position is the first and most important advantage," which makes the country's participation in the BRI beneficial for the China-proposed initiative, as it appropriately connects West Asia to East Asia through land and sea, he added.

The ICCCI chief said the country's good political and economic relations with its eastern and western neighbors are among Iran's other advantages.

"If these advantages are used appropriately and maximally, they can help accelerate BRI's implementation," he added.

Despite the shadow cast by the Covid-19 pandemic, ICCCI is taking part in online exhibitions and holding virtual meetings with their Chinese partners to increase its presence in the Chinese market.

The Iranian business leader, who has interacted with the Chinese people for roughly 40 years and visited China regularly for almost three decades, said the Iranian and Chinese people, owing to their characteristics, can work together.

As this year marks the 100th anniversary of the founding of the Communist Party of China (CPC), he said the Chinese ruling party "has helped considerably improve the quality of people's lives in China".

"The present level of development and progress witnessed in China could not be possible without such a CPC-led united country," he said.

25-Year Cooperation Agreement

Iranian Foreign Minister Mohammad Javad Zarif and his Chinese counterpart Wang Yi signed the Iran-China comprehensive cooperation document in a meeting in Tehran on March 27, IRNA reported.

The cooperation document had for the first time been discussed in 2015, when Chinese President Xi Jinping visited Iran.

In addition to his Iranian counterpart, Wang met Iran's President Hassan Rouhani and Ali Larijani, anadvisor to Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei.

Wang and Zarif had consultations on bilateral and international issues and explored long-term cooperation and implementation of comprehensive strategic partnership in the meeting.

“Relations between the two countries have now reached the level of strategic partnership and China seeks to comprehensively improve relations with Iran,” Wang was quoted as telling Zarif.

“Our relations with Iran will not be affected by the current situation, but will be permanent and strategic,” Wang said ahead of the televised signing ceremony referring to US sanctions.

Larijani said in his meeting with the Chinese FM: “Iran decides independently on its relations with other countries and is not like some countries that change their position with one phone call.”

The accord brings Iran into China’s Belt and Road Initiative, a multi-trillion-dollar infrastructure scheme intended to stretch from East Asia to Europe, according to Reuters.

The project aims to significantly expand China’s economic and political influence, and has raised concerns in the United States.

China has spoken out often against US sanctions on Iran and partly contested them. Zarif called China “a friend for hard times”.

The agreement includes Chinese investments in sectors such as energy and infrastructure.

Rouhani appreciated Beijing’s support for Iran’s position on its 2015 nuclear deal with world powers, in which it agreed to curb its nuclear program in return for the lifting of international sanctions.

“Cooperation between the two countries is very important for the implementation of the nuclear accord and the fulfilment of obligations by European countries,” Rouhani said.

US President Joe Biden has sought to revive talks with Iran on the nuclear deal abandoned in 2018 by his predecessor, Donald Trump, in 2018. Tehran wants the US sanctions removed before any negotiations resume.

“Under the new administration, the Americans want to reconsider their policy and return to the nuclear accord, and China welcomes their move,” Wang said.

He also promised that China would provide more coronavirus vaccines to Iran, the Middle Eastern country worst-hit by the pandemic.

Iranian Foreign Ministry Spokesman Saeed Khatibzadeh said the agreement was a “roadmap” for trade and economic and transportation cooperation, with a special focus on both countries’ private sectors.

China is willing to invest $400 billion in Iran’s economic sectors as part of its 25-Year Cooperation Agreement, some $80 billion of which are to be in the mining sector, according to the head of Mines and Mineral Industries Commission of Iran Chamber of Commerce, Industries, Mines and Agriculture.

“The significance of this amount becomes even more prominent when we take into account that over the last 95 years and since the reign of Reza Shah [the first Pahlavi Monarch] up until now, investments made in Iran’s mines and mineral industries amount to no more than $50 billion,” Bahram Shakouri was also quoted as saying by ILNA.

The official said absorbing this volume of Chinese investments can generate numerous jobs and expand the country’s production and exports.

“This can also affect developments in other fields such as infrastructures, transportation and ports,” he concluded.