China, one of Iran’s closest allies and the biggest buyer of its oil, has stayed on the sidelines of its conflict with Israel, urging a diplomatic solution.
Beijing has long backed US-sanctioned Tehran as part of efforts to deepen its strategic and economic heft in the Middle East.
In 2021, they signed a 25-year cooperation deal, though full details were never disclosed and analysts say follow-up implementation has been weak.
However, Chinese investment in Iran lags what Beijing puts into other nations in the region.
“Chinese state-owned companies have largely stayed away, mostly out of fear of running afoul of US sanctions,” said Bill Figueroa, a China-Middle East expert at the University of Groningen in the Netherlands.
The American Enterprise Institute estimates total Chinese investment since 2007 at just under $5 billion, while Chinese commerce ministry data shows its direct investments in Iran by the end of 2023 totalled $3.9 billion.
By contrast, Beijing invested more than $8.1 billion in the United Arab Emirates between 2013-2022, and almost $15 billion in Saudi Arabia between 2007-2024, the think-tank says.
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Energy:
China imports around 43 million barrels of oil per month from Iran – accounting for some 90% of Iran’s oil exports and roughly 13.6% of China’s crude purchases.
Around 65% of total crude and condensate shipped through the Strait of Hormuz off Iran is destined for China, according to shipping data firm Vortexa.
China National Petroleum Corp (CNPC) in 2016 signed a $4.8 billion deal with France’s Total to develop the offshore South Pars gas field in the Gulf with an Iranian state firm.
CNPC’s stake of 30% was worth around $600 million. However, the state-owned petroleum giant pulled out of the project due to US pressure in 2019.
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CNPC also signed a deal in 2009 to develop the North Azadegan oil field, with the first phase valued at about $2 billion. The first cargo of 2 million barrels was shipped to China in 2016.
China’s biggest refiner Sinopec signed a $2 billion deal to develop the Yadavaran oil field in 2007. In 2017, Sinopec signed a contract worth about $2.1 billion to upgrade a refinery in Abadan near the Gulf coast. It remains under construction.
In 2024, China’s LDK Solar reached a deal with Iran’s Ghadir Investment Group for a large-scale photovoltaic power plant with investment of around 1 billion euros ($1.16 billion). It was expected to generate 2 billion kilowatt-hours of solar power annually.
Railways:
In 2018, China National Machinery Industry Corporation signed a 5.3 billion yuan ($738 million) deal to expand and renovate a railway connecting Tehran with the cites of Hamedan and Sanandaj to improve connectivity in west Iran.
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Also that year, a subsidiary of China Railway Construction Corporation signed a contract worth 3.5 billion yuan for the 263 km Kermanshah-Khosravi railway project in west Iran, with a construction period of 48 months.
China’s Norinco International signed an agreement in 2018 to build the first tramway line in the Iranian city of Qazvin, at about $150 million.
In 2017, China Eximbank and an Iranian state bank signed a $1.5 billion deal to upgrade and electrify a 926 km railway between Tehran and the eastern city of Mashhad as part of Beijing’s Belt and Road Initiative. However, the project has stalled over financing negotiations.
Metals:
In 2017, China’s Metallurgical Corporation (MCC) invested around $350 million in the Sepid Dasht steel plant and won a design contract for a pelletising project. However, local media reported that the projects were delayed by financing issues.
($1 = 7.1783 Chinese yuan renminbi)
($1 = 0.8623 euros)
