{"id":1808,"date":"2025-09-19T14:24:24","date_gmt":"2025-09-19T10:54:24","guid":{"rendered":"https:\/\/iranbri.com\/a-look-at-iran-china-relations-a-strategy-for-activating-the-belt-and-road-initiative-and-the-25-year-comprehensive-agreement\/"},"modified":"2025-09-19T14:24:24","modified_gmt":"2025-09-19T10:54:24","slug":"a-look-at-iran-china-relations-a-strategy-for-activating-the-belt-and-road-initiative-and-the-25-year-comprehensive-agreement","status":"publish","type":"post","link":"https:\/\/iranbri.com\/en\/a-look-at-iran-china-relations-a-strategy-for-activating-the-belt-and-road-initiative-and-the-25-year-comprehensive-agreement\/","title":{"rendered":"A Look at Iran-China Relations: A Strategy for Activating the Belt and Road Initiative and the 25-Year Comprehensive Agreement"},"content":{"rendered":"

<\/em>Iran is at a sensitive juncture in its history, and due to the 25-year strategic pact with China, this country holds a special and irreplaceable position for us. In contrast, Iran does not hold such a position for China. Whenever Iran has faced crises in various fields, it has turned to China, requesting urgent assistance, consultation, or technical, engineering, and manufacturing cooperation. However, from China’s perspective, Iran is a sanctioned country with no option other than China, and it also knows that Russia is preoccupied with its own problems, and Europe and the US have closed their doors. <\/p>\n

This has led China not to see itself in an urgent position to respond to Iran’s demands. Even if it meets some of Iran’s demands, it knows that Iran has no other option and will be forced to continue cooperation. Iran’s dependence on China, especially in oil sales, with over 90% exported to that country, is indeed Iran’s problem, as all capacities are placed in one basket, which has deprived Iran of its maneuvering and bargaining power. In this article, a different approach is proposed, relying on an inward-looking perspective, creating economic capacities, and diversifying options. <\/p>\n

A Brief Overview of Iran’s Situation Compared to its Neighbors in Relation to China<\/h2>\n

Saudi Arabia’s transactions with China amounted to approximately $107 billion in 2024 (Saudi exports to China were about $57 billion, and China’s exports to Saudi Arabia were about $50 billion); China has been one of the largest sources of investment in clean and renewable energies in Saudi Arabia. Approximately $21.6 billion from 2021 to October 2024 (mainly clean energy and solar chain), the YASREF Aramco-Sinopec refinery in Fujian with a capacity of 400,000 barrels\/day and plans for expanding the refining\/petrochemical complex in 2025, as well as a wave of “green” collaborations (solar panels\/electric vehicles) have been examples of these transactions.<\/p>\n

The UAE’s transactions with China also amounted to approximately $90 billion in non-oil trade in 2024. China’s exports to the UAE in 2024 were about $65.6 billion (UN\/Comtrade), which included the extensive presence of Chinese companies in logistics, energy, and technology at the COSCO terminal in Khalifa Port (CSP Abu Dhabi Terminal).<\/p>\n

However, Iran’s transactions with China have been such that non-oil trade in the 11 months leading up to February 2025 was approximately $30.4 billion (Iran’s statistics). Due to sanctions, oil sector statistics are mostly outside official direct investment figures; however, economic cooperation is primarily focused on oil purchases and non-dollar commodity exchanges. China purchased an average of 1.4 million barrels\/day of oil and condensates from Iran in 2024 (Kpler\/IEA estimate).<\/p>\n

In the UAE, China’s logistics projects (COSCO terminal) and solar energy (MBR Park) are key drivers of China’s role in the UAE’s non-oil economy. In Iran, due to sanctions, the official trade picture is less than the actual volume of oil transactions; independent estimates show that a major share of Iran’s oil goes to China. <\/p>\n

Activating the Belt and Road Initiative and the 25-Year Comprehensive Agreement<\/h2>\n

Iran is clearly lagging behind its neighbors in interactions, relations, and benefiting from China-related interests due to sanctions, isolation in the global trade structure, and the international system. The solution to activating this immense potential and actualizing it in practice lies in two well-known Chinese proverbs and sayings: <\/p>\n

First, tidy up your house, then invite guests (\u5148\u6574\u7406\u597d\u81ea\u5df1\u7684\u623f\u5b50\uff0c\u518d\u8bf7\u5ba2\u4eba: Xi\u0101n zh\u011bngl\u01d0 h\u01ceo z\u00ecj\u01d0 de f\u00e1ngzi, z\u00e0i q\u01d0ng k\u00e8 r\u00e9n) <\/p>\n

Talk less, do more (\u5c11\u8bf4\u591a\u505a: Sh\u01ceo shu\u014d du\u014d zu\u00f2.) <\/p>\n

If Iran organizes its economy, stands against smuggling \u2014 especially fuel smuggling with an annual volume of $20 to $30 billion \u2014 by eliminating government-mandated pricing, reforms its economic governance, removes command pricing, and escapes budget deficits and inflation, the country’s need for China will decrease. Under these circumstances, China will feel threatened, needed, and motivated, and to maintain its position in Iran, it will be willing to invest and cooperate much more extensively and offer better proposals. <\/p>\n

Iran can negotiate with China on trade, transit, Chabahar Port, oil sales, or tariffs and trade, but given the Chinese understanding of Iran’s situation, they see no urgency in responding to these demands. China may offer relative cooperation to maintain relations, but only to the extent that its own interests are secured. <\/p>\n

Currently, China’s investment in Iran is very limited and generally does not exceed one to two billion dollars per year; whereas by reforming Iran’s command economic structures and improving economic governance, we can generate tens of billions of dollars in surplus revenue annually and escape budget deficits, liquidity creation, and inflation. Therefore, to improve relations, Iran’s internal economic structure must first be reformed.<\/strong> Otherwise, Iran will remain highly dependent on China, and China will not feel any necessity for deeper, broader, or more extensive commitments in such an equation. <\/p>\n

In fact, as long as Iran puts all its eggs in China’s basket, no significant transformation in relations should be expected. The real solution is to strengthen the country’s leverage and bargaining power through economic reforms and diversification of foreign relations and partners. Only then can Iran-China relations be elevated to a strategic and balanced level, and China be encouraged to fight other competitors to maintain its share and position in Iran’s economy and trade, and grant more concessions to Iran\u2014concessions it is currently unwilling to give in the current domestic economic and foreign relations equation, and sees no reason to. <\/p>\n

While our officials are more interested in learning and imitating China’s control and supervisory policies, such as filtering, they have neglected or deliberately chosen not to learn from the achievements of China’s free-market economic policies, including the absence of government-mandated pricing in major cases and the avoidance of deadly and destructive price fixing. To further clarify the matter, major price comparisons between China and Iran are presented in the table below: <\/p>\n\n\n\n\n\n\n\n\n
Name<\/strong><\/div><\/td>\n
Iran <\/strong>(USD)<\/strong><\/div><\/td>\n
China <\/strong>(USD)<\/strong><\/div><\/td>\n
China Price\/Iran<\/strong><\/div><\/td>\n<\/tr>\n
Household Electricity<\/strong>(kWh)<\/strong><\/div><\/td>\n
0.002<\/strong><\/div><\/td>\n
0.075<\/strong><\/div><\/td>\n
37.5 times<\/strong><\/div><\/td>\n<\/tr>\n
Gasoline<\/strong><\/div><\/td>\n
0.033<\/strong><\/div><\/td>\n
0.85<\/strong><\/div><\/td>\n
25.8 times<\/strong><\/div><\/td>\n<\/tr>\n
Diesel<\/strong><\/div><\/td>\n
0.0067<\/strong><\/div><\/td>\n
0.80<\/strong><\/div><\/td>\n
119 times<\/strong><\/div><\/td>\n<\/tr>\n
Natural Gas<\/strong><\/div><\/td>\n
0.06 <\/strong> (approx.) <\/strong><\/div><\/td>\n
0.50<\/strong><\/div><\/td>\n
8.3 times<\/strong><\/div><\/td>\n<\/tr>\n
Household Water<\/strong><\/div><\/td>\n
0.035<\/strong> (approx.)<\/strong><\/div><\/td>\n
0.71<\/strong><\/div><\/td>\n
20 times<\/strong><\/div><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Criteria:<\/strong> Iran’s subsidized gasoline: 3000 Tomans, non-rationed diesel in Iran: 600 Tomans, Dollar: 90,000 Tomans<\/p>\n

Conclusion<\/h2>\n

Iran possesses all the potential capacities to become a key and active member in the hundreds-of-billions-of-dollars Belt and Road Initiative, and also to activate the 25-year comprehensive agreement with China. The overlooked points are manifested in two Chinese proverbs: speaking less, chanting slogans, and stating goals and plans to avoid attracting the envy, hostility, and sabotage of ill-wishers and the schemes and conspiracies of enemies; and structural reform of the domestic economy, updating economic governance, and eliminating command pricing, which would make smuggling economically unviable due to the approximate equalization of fuel prices on both sides of the border. Furthermore, free prices will lead to tens of billions of dollars in annual revenue, create a budget surplus instead of a deficit, eliminate the need for liquidity creation and inflation to compensate for budget shortfalls, and enable salary increases for employees commensurate with price liberalization due to the proportional increase in government revenue from the liberalization of fuel, energy, water, and electricity sales prices. Moreover, only with free pricing will individuals and companies seek to save and use modern, low-consumption technologies to pay less, and production will become profitable, as producers can profit by selling their products at free and real prices. Whereas under command pricing, they barely survive, are mostly loss-making, and are on the verge of bankruptcy. In fact, under command pricing, smuggling and mining are profitable; conversely, with free prices: Domestic and foreign production, employment, and investment will occur, surge, and flourish, and simultaneously create maneuvering and bargaining power for Iran in foreign relations and trade, including with China.<\/p>\n","protected":false},"excerpt":{"rendered":"

Iran is at a sensitive juncture in its history, and due to the 25-year strategic pact with China, this country holds a special and irreplaceable position for us. In contrast, Iran does not hold such a position for China. Whenever Iran has faced crises in various fields, it has turned to China, requesting urgent assistance, […]<\/p>\n","protected":false},"author":7,"featured_media":305,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[53],"tags":[],"coauthors":[47],"class_list":["post-1808","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-notes-en"],"_links":{"self":[{"href":"https:\/\/iranbri.com\/en\/wp-json\/wp\/v2\/posts\/1808","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/iranbri.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/iranbri.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/iranbri.com\/en\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/iranbri.com\/en\/wp-json\/wp\/v2\/comments?post=1808"}],"version-history":[{"count":0,"href":"https:\/\/iranbri.com\/en\/wp-json\/wp\/v2\/posts\/1808\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/iranbri.com\/en\/wp-json\/wp\/v2\/media\/305"}],"wp:attachment":[{"href":"https:\/\/iranbri.com\/en\/wp-json\/wp\/v2\/media?parent=1808"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/iranbri.com\/en\/wp-json\/wp\/v2\/categories?post=1808"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/iranbri.com\/en\/wp-json\/wp\/v2\/tags?post=1808"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/iranbri.com\/en\/wp-json\/wp\/v2\/coauthors?post=1808"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}