The People Republic of China & IRAN Relations

Reconstruction of SILK ROUTE

The relations between Iranian(Post shah era) and Chinese governments(after 1949) are relatively new, trade and diplomatic relations between the peoples and cultures within these two countries have existed since 200 BC.

These new relations flourished during the cold war era which has grown extensively after collapes of soviet union.

The major reason of the extensive development in the relation in the two countries was the requirement of the oil and gas demands of developing economy of PRC where for Iran re-establishment of and development of militray streangth and capabilities in post cold war era i.e. after the collaps e of soviet union(USSR).

Currently more than 80% of oil and gas requirements of china are satisfied by Islamic Republic of Iran.

Today Iran serves as a permanent member partner of PRC growing Oil and gas demands.  Because of this reliance on Iranian oil and gas, China is now investing in the modernization of Iran’s oil and gas sector to secure access to the resource. 

In 2011, the group Green Experts of Iran reported that Beijing and Tehran had signed an extensive deal that would give China exclusive rights to several Iranian oil and natural gas fields through 2024. Earlier in 2004 the two countries signed a preliminary accord worth $70 billion to $100 billion by which China will purchase Iranian oil and gas and help develop Iran's Yadavaran oil field, near the Iraqi border. Earlier same year, China agreed to buy $20 billion in liquefied natural gas from Iran over a quarter-century.

China -Iran Exponential trade growth

Under the terms of the deal, Iran will give Chinese oil companies exclusive rights to three large regions of Iranian land as well as the rights to build all necessary infrastructure for these regions, all of which sit atop of large oil and natural gas fields. In return, China promises to treat any foreign attack against these regions as attacks against its own sovereign territory, and will defend them as such. China will have no need for prior permission from the Iranian government to maintain and increase its military presence in Iran, and will control the movement of Iranians in and out of these territories.The Green Experts of Iran speculate that this agreement was the concrete basis for Major General Zhang Zhaozhong's statement that "China will not hesitate to protect Iran even with a third World War." 

Apart from the energy partnership between the two nation, china has also strong commercial realtions . the Iraninan apetite for various consumer good has been doubled since 1979 revolution. China imported $3.12 billion of Iranian non-energy goods in 2009, and has also made  extensive nonenergy related infrastructure investments in Iran, including construction contracts for bridges, highways, railways, airport infrastructure, and metro rail systems.  Additionally,  it  is  reported that China has expressed interest in assisting with the development of Iran’s other extractive industries including titanium, aluminum, copper, and coal.

  China  also  exports  manufactured goods to Iran such as computer systems, household appliances, and cars etc. where as Iranian government has also provided special authority and subsidy to the chineses compnaies involved in various infrastructure projects. the mutal cooperation between the two nation is growing despite of the sanction and other restriction imposed by USA, EU and united nation on both the countries.

PRC is home for more than 20 million muslim chinese poupulation which had always been area of concern for PRC government. these developing relation with Iran will help the chinese goverment to improve its image among the Chinese Muslim population staying in the northern part of china

After Iranian Revolution in 1979(post Shah era), Iran’s relationship with the United States, Europe, and the Western countries has deteriorated over issues such as Weapon of mass destruction and terrorist sponsorship. 

With Iran’s every step towards ‘rogue state’ status, the United States, European Union, and United Nations have responded with increasingly proactive sanctions that attempt to target the economic and political pillars of support for the Islamist regime and further isolate Iran from the West. China, meanwhile, has not hesitated to profit from the economic void left by the torrent of Western economic outflow. 

This undue priority of PRC toward the Iraninan interests has developed a new dimension in the world political scenario.

In my next post you will discover how this growing relation between two countries will affect India and rest of the World.