What are China's economic interests in Iran?
BEIJING - 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.
Following are details of its investments in Iran.
Cooperation pact
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 behind 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 Dr Bill Figueroa, a China-Middle East expert at the University of Groningen in the Netherlands.
The American Enterprise Institute estimated that total Chinese investment since 2007 at just under US$5 billion (S$6.4 billion), while Chinese commerce ministry data shows its direct investments in Iran by the end of 2023 totalled US$3.9 billion.
In contrast, Beijing invested more than US$8.1 billion in the United Arab Emirates between 2013 and 2022, and almost US$15 billion in Saudi Arabia between 2007 and 2024, the think-tank said.
Energy
China imports around 43 million barrels of oil per month from Iran – accounting for some 90 per cent of Iran's oil exports and roughly 13.6 per cent of China's crude purchases.
Around 65 per cent 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 US$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 per cent was worth around US$600 million. However, the state-owned petroleum giant pulled out of the project due to US pressure in 2019.
CNPC also signed a deal in 2009 to develop the North Azadegan oil field, with the first phase valued at about US$2 billion. The first cargo of 2 million barrels was shipped to China in 2016.
China's biggest refiner Sinopec signed a US$2 billion deal to develop the Yadavaran oil field in 2007. In 2017, Sinopec signed a contract worth about US$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 (S$1.49 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 (S$945 million) deal to expand and renovate a railway connecting Tehran with the cites of Hamedan and Sanandaj to improve connectivity in west Iran.
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 US$150 million.
In 2017, China Eximbank and an Iranian state bank signed a US$1.5 billion deal to upgrade and electrify a 926km 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 invested around US$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. REUTERS
Join ST's Telegram channel and get the latest breaking news delivered to you.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
30 minutes ago
- Straits Times
War between China, US inconceivable and avoidable, says top Chinese official
Sign up now: Get ST's newsletters delivered to your inbox Mr Liu Jianchao, head of the Communist Party of China's International Department, speaking at the World Peace Forum in Beijing on July 3. BEIJING – War between China and the United States is not inevitable and even unthinkable, a senior Communist Party of China (CPC) official has said, in one of Beijing's clearest rejections yet of the notion of conflict between the world's two largest powers. 'People often say that a war between China and the US is inevitable, but I don't think so,' Mr Liu Jianchao, head of the party's International Department, told an international audience of current and former foreign policymakers and scholars at the World Peace Forum in Beijing on July 2. He described the Chinese and Americans as peace-loving people, and said it would be 'inconceivable' that China and the US would want to meet on the battlefield. 'So we advise those politicians who advocate force and admire muscle-flexing to give up their belligerent rhetoric and stop instigating conflicts and contradictions,' he said. Earlier in his opening remarks, he criticised US Defence Secretary Pete Hegseth's speech at the Shangri-La Dialogue security forum in Singapore, which marked the first comprehensive articulation of the US' Asia policy under President Donald Trump's second term. In that speech in June, Mr Hegseth had emphasised America's commitment to the Indo-Pacific region and warned that China poses a real and potentially imminent threat to the region. Mr Liu described Mr Hegseth's message as a 'new incarnation of a hegemonic mindset'. 'What he really wants is force, not dialogue, and to provoke confrontation, not peace and harmony,' Mr Liu said of Mr Hegseth. 'If we are still obsessed with zero-sum games and absolute security,' he warned, 'the people of the world may face a predicament that is not about who loses and who wins, but about destruction for all – a price that human civilisation cannot bear.' The strategic rivalry between the US and China has intensified in recent years, especially after Mr Trump returned to the White House in January . Competition spans from trade and technology to security and ideology. Mr Liu, who is the CPC's equivalent of foreign minister, stressed that China wants to develop peacefully. He pointed out that a secure and stable external environment is essential for the party's ability to rule the country. 'Hence, China will never export turmoil and strife, as that will lead to a self-destruction of the wonderful opportunities to develop,' he said. He called on leaders to act with responsibility and conscience in choosing a shared future over zero-sum games. 'History will judge our generation not by how many wars we have won, but by whether we have kept the peace and brought happiness to our people,' he said. Speaking at the opening of the forum, China's Vice-Premier Han Zheng reiterated that as a responsible big power, China has always been 'a builder of world peace, a contributor to global development and defender of international order'. At another session at the forum, Mr Cui Tiankai, a former Chinese ambassador to the US, stressed that China never set out to compete with the US. 'Our developmental goal is not to put anyone down or to replace anyone, but to surpass ourselves,' he said. Pointing to China's stance against Soviet hegemony in the 1960s, Mr Cui argued that Beijing's opposition to hegemonic power is not limited to the US. 'It is a mistake to think that Sino-US rivalry means that China is competing with the US for supremacy. We do not compete with anyone for supremacy, we are in fact against hegemony by any country,' he said. Speaking at the same panel as Mr Cui, Singapore's former foreign minister George Yeo did not hide his disdain for the pressuring tactics of Mr Trump. 'The US is no longer strong enough to be a global supremo. But it is strong enough to be a bully, especially to those who are weak,' he said. He cited how Mr Trump pressed Ukraine to sell minerals to the US and Japan to buy its rice. 'He is threatening people he can threaten,' he said. 'He is nice to Xi Jinping, because he knows he cannot bully Xi Jinping,' said Mr Yeo, referring to the Chinese President. Earlier Mr Liu said, when asked by a journalist about the future of US-China ties: 'I'm optimistic.'
CNA
37 minutes ago
- CNA
World Peace Forum: Chinese vice president says tariff and trade wars will have "no winners"
A senior Chinese leader has made a subtle but pointed jab at US President Donald Trump's foreign and trade policies. Vice President Han Zheng repeated Beijing's stance that there are no winners in tariff and trade wars. Tan Si Hui reports.
Straits Times
an hour ago
- Straits Times
Colombian foreign minister resigns amid passport printing row
Sign up now: Get ST's newsletters delivered to your inbox FILE PHOTO: Colombian Foreign Minister Laura Sarabia attends a press conference for a ministerial meeting of the China-CELAC Forum, at the Diaoyutai State Guesthouse, in Beijing, China May 13, 2025. REUTERS/Tingshu Wang/Pool/File Photo BOGOTA - Colombia's Foreign Minister Laura Sarabia announced her resignation on Thursday, as President Gustavo Petro's government faces turbulence over an administrative dispute involving the printing of national passports. Sarabia had expressed dissatisfaction with the government's decision to alter a previous passport printing agreement. "In the last few days, decisions have been made that I do not agree with," Sarabia wrote in a post on X, adding that she had decided to resign out of "personal coherence and institutional respect." Sarabia, who had previously served as Petro's chief of staff, was named the South American country's top diplomat by the leftist president in January. REUTERS
