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By Sara Rajabova

Iran’s traditional and major trade partner China is determined to further strengthen the relations with the Islamic Republic.

The removal of sanctions have enabled Beijing, which did not cease the cooperation with the Islamic Republic during sanctions-period, to expand economic cooperation, especially in the field of investment and providing financial resources.

With an aim to get more benefits from cooperation with Iran, Chinese President Xi Jinping is going to pay an official visit to Tehran, which is the first visit of Chinese president to the Islamic Republic in 14 years.

The Chinese president reportedly will arrive in Iran heading a big delegation of political and economic representatives.

Prior to his Tehran visit, Chinese leader Xi Jinping has called for strengthening political, trade and cultural ties with Iran through an op-ed published on IRNA news agency.

Speaking about trade ties between Iran and China, he said over the past six years Beijing has been Tehran’s major trade partner. China and Iran have developed a broad and deep partnership centered on China's energy needs and Iran's abundant resources as well as significant non-energy economic ties.

In 2011, approximately 10 percent of China's oil imports were from Iran. Approximately 80 percent of China’s total imports from Iran are oil and the rest is mineral and chemical products.

Iran exported 17.56 million tons of non-oil goods, worth $5.33 billion to China during the first eight months of 2015, according to Iranian Customs Administration. China was the main importer of Iranian goods in the mentioned period. Beijing’s imports accounted for 22.7 percent of Iran’s total non-oil exports in terms of value and 33.3 percent in terms of volume.

Omid Shokri Kalehsar, an energy analyst and PhD candidate in international relations at Turkey’s Yalova University, said Iran and China has historical relations, and after Islamic Revolution both countries was interested to develop bilateral relations.

“China and other countries are interested to invest in Iran’s energy and industry sectors. Chinnese firms have a good potential in energy sector and are ready to come back to Iranian energy sector and invest in it. China is Iran’s first business and trade partner and both counties enjoy a potential to increase trade volume in coming years,” the expert told AzerNews.

He voiced assurance that during Xi’s Tehran visit both countries will seek to discuss new agreement especially in oil and gas sector.

“Iran expects Chinese companies to be more active in the country and invest in its major projects. Iran is interested to attract about $30 billion investments from Chinese companies. In the first six months of 2014, China’s oil imports from Iran increased 48 percent from the same period the previous year. That pace slowed over the rest of 2014, but the year as a whole still registered a 28 percent increase in oil imports from Iran,” Shokri said.

He believes that energy will be backbone of Iran–China relations in post-sanctions era.

Shokri added that China is keen to convince Iran in joining the Shanghai Cooperation Organization.

“That regional grouping is currently devoted to fighting the “three evils” of separatism, terrorism, and religious extremism but it has grown economic aspects as well. China is also moving to integrate Iran into its own multilateral institutions. Iran has been officially accepted as a founding member of China-founded Asian Infrastructure Investment Bank, which is another small step toward normalizing Iran’s interactions with the global community,” the expert underlined.

As, over the past several years, China became Iran's number one oil customer and trading partner, Iran is now seeking China’s help in the technological know-how to develop its energy resources.

Shokri said after the lifting of the sanctions Iran is planning to export more oil to world oil market.

“Before sanctions, China firms had played key role in some Iranian oil and gas fields, as well as in Iran’s LNG sector. By December 2008, China’s Sinopec signed a 25-year agreement with NIOC for developing of Yadavaran oil field and according agreement Sinopec has to invest $1.76 in this field with an aim of increasing oil capacity. By 2009, China national oil company made agreement with Iran over developing South Azadeghan oil field. By June 2009, another important agreement was signed between Iran and China’s companies over phase 11 of South Pars field. China National Oil Company with Petronas and Iranian National Oil Company agreed to invest about $4.5 billion in this phase with an aim of producing 1.75 bcm daily form this phase,” the expert said.

He went on to say that this phase is very important for Iran and after coming to stream Iran will able to produce more oil and gas from South Pars fild.

“China’s CNPCI has also signed agreement to invest in Iran’s LNG project. Iran has a plan to produce about 75 million ton annually and has five LNG production facilities project. China’s firms have delayed the completion of oil and gas projects. Iran was not satisfied with such delays. China’s delays in completing oil and gas projects cost about $ 40 billion for the Iranian economy.

Shokri believes that China also seeks to play mediator role between Iran and Saudi Arabia and help these countries to solve the problems.

“China is importing oil from both countries and good relations between Iran and Saudi Arabia would help to keep peace in the region and whereas China’s oil imports from the region can contribute the stability in the region. Stability and peace in the region is very important for China’s energy security,” he said.

Beyond its oil resources, Iran also plays an important role in China’s regional economic ambitions.

Since 2013, China has pushed to expand its overland trade routes through the Silk Road Economic Belt, an initiative to build roads, railroads, and other transportation infrastructure throughout Central Asia. Iran is a critical part of this plan, due to its strategic location with access to key waterways.

Prior to his Tehran visit, Xi called for expansion of ties on transport sector and said Iran and China both are considered to be significant destinations that are located along the Silk Road.

Earlier in 2015, Iranian media reported that Tehran plans to participate in an ambitious Chinese plan to revive the Silk Road aiming to connect Asia to Europe and Africa through a network of roads, railways, ports and airports.

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Sara Rajabova is AzerNews’ staff journalist, follow her on Twitter: @SaraRajabova

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