China-Iran Economic Pact Strengthens as Sanctions Ease

Even as most of the international sanctions meant to punish Iran over its elusive and aggressive nuclear program are lifted, Tehran managed to escape economic downfall and world isolation thanks in part to one country that didn’t play by the rules.

China has remained one of Iran’s most reliable business partners and that pact is expected to strengthen as economic sanctions against Tehran are lifted in return for its supposed de-escalation of its nuclear program.

During Chinese President Xi Jinping’s visit to Iran last week, the two nations agreed to increase trade to $600 billion in the coming decade.

“We are Iran’s biggest trading partner for six years in a row,” Xi wrote in an open letter to the Iranian people before his visit.

“China has considerable strength in capital, technologies, equipment and other areas,” the letter read. “Iran has rich resources, ample labor force and huge market potential, and it is in the crucial stage of industrialization and modernization.”

For years, Chinese investors and laborers have been building this industry.

Last September, a massive steel mill went into operation in central Iran after Chinese businessman Sheng Kuan Li pumped $200 million into the project. He owns two other factories in Iran.

“Where we had to stand on the sidelines, the Chinese have been filling the void,” said a European diplomat speaking to the New York Times on condition of anonymity. “They are way ahead of all of us.”

Throughout the country, steel mills and mines are being run by Chinese investors and manned by Chinese workers.

Chinese laborers have been hard at work building the Niayesh tunnel which is expected to be one of the largest urban tunnels in the world, stretching at more than three-and-a-half miles.

Iran’s metro-system emerged in 1995 from Chinese capital and with the know-how of Chinese engineers.

In return, Iran has been quenching Beijing’s thirst for cheap crude oil.

In 2013 alone, Iran exported $19 billion in crude oil and petrochemical products.

“They are an independent country,” said Iranian businessman Asadollah Asgaroladi in an interview with the Times. “They don’t allow the Americans to tell them what to do. So they buy our oil, now and in the future.”

Asgaroladi also leads the Iran-China Chamber of Commerce.

Xi views Iran as a key component in his so-called Silk Road project, which aims to push China’s economic influence westward.

Xi became the first world leader to visit Iran after most sanctions were starting to ease on Iran last week. His tour will now take him to Egypt and Saudi Arabia..

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