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Thursday, November 1, 2007

China and Iran relations

This is from this site. It is a brief summary of Iran China relations with a number of references. THe US has often interfered to prevent Chinese military exports to Iran but the US may not be able to do this much longer. Russia and China are forming new alliances that will no doubt begin to balk at US attempts to prevent any threats to its hegemony.

China and Iran relations
01/11/2007

“…Iran is a consistent market for China’s exports and supplier for its growing energy demand. China is involved with Iran’s energy sector in everything from oil exploration and drilling to pipelines…”

Backgrounder by Realit-EU


Relations between China and Iran date back many centuries. Pre-Islamic Persian dynasties such as the Parthians and Sassanids had various contacts with China. In Islamic times, the two countries were connected by the Silk Road. China and Iran established diplomatic relations on August 16, 1971. 1

Economic Ties

Iran is a consistent market for China’s exports and supplier for its growing energy demand. China is involved with Iran’s energy sector in everything from oil exploration and drilling to pipelines.

However, China’s engagement with Iran extends far beyond energy, with more than 100 Chinese companies working in Iran in sectors such as dam construction and shipbuilding, steel production, and airport and seaport development.

Ali Akbar Saheli, Iran's former representative to the International Atomic Energy Agency, said the two countries “mutually complement each other. They have industry and we have energy resources.” 2

Iran has observer status, and aspires membership to, the Shanghai Cooperation Organization, a mutual security organization formed between China, Russia and several other countries of the former Soviet Union, in which China has a leading role. 3

Iran is is confident in the growing support it has been receiving from China. In July 2004 Iran’s parliamentary speaker Gholam Ali Haddad-Adel stressed China's support for Iran’s nuclear programs. 4

Trade between Iran and China has grown quickly, increasing from $1.2 billion in 1998 to about $10 billion last year. 5

Iran is the second largest oil exporter to China after Saudi Arabia, exporting around $5.8 billion in crude oil along with petrochemical products. 6

At the same time China was the second largest exporter to Iran in 2005, with 8.3% of the total market, and those exports rose 360% from 2000 to 2005 for economic and strategic reasons. 7

As for specific projects, in March 2004 China’s state-owned oil trader Zhuhai Zhenrong Corporation signed a $20 billion (R133 billion) deal to buy more than 110 million tons of liquefied natural gas (LNG) from Iran over 25 years, according to company and press reports. The deal will begin with a purchase of 2.5 million tons of LNG from Iran in 2008, rising to 5 million tons per year by 2013. 8

In October 2004 China’s state-owned Sinopec Group signed a $100 billion agreement with Iran to develop the Iranian Yadavaran oil field, which will produce an expected 300,000 barrels of oil per day over a 25-year period. In April 2007 Iran’s oil minister Kazem Vaziri-Hamaneh said a final deal was very close. 9 Sinopec would assume a 51% stake in the Yadavaran field, with 29% going to India's Oil and Natural Gas Corporation (ONGC) and the remaining 20% to either Iranian firms or another foreign company such as Royal Dutch Shell. 10

Military Ties

China has played a key role in Iran's missile development, with exports and assistance dating back 20 years. China’s exports and assistance to Iran generally fall into two areas: provision of anti-ship cruise missiles and related technology and technical assistance for Iran's ballistic missile program, as well as some exports of complete ballistic missiles. 11

China began exporting missiles to Iran in 1985 during the Iran-Iraq war, when China supplied weapons and military technology to both sides. 12

In 1986-87 China reportedly transferred HY-2 (Silkworm) anti-ship cruise missiles to Iran, prompting the United States to issue a protest to Beijing and to temporarily freeze American liberalization of high-technology exports to China. 13

In 1989 China also sold between 150 and 200 M-7/8610 ballistic missiles to Iran. 14

China reportedly assisted Iran's efforts to upgrade its North Korean Scud missiles and has supplied technical and manufacturing assistance to a number of indigenous Iranian missile programs, including the Iran-130 (aka Mushak-120), Iran-700, NP-110, and Zelzal-3.

In 1996, when media reports stated that China had transferred advanced C-802 anti-ship cruise missiles to Iran that could trigger U.S. sanctions under the 1992 Iran-Iraq Nonproliferation Act, China vigorously denied the allegation. 15

In 1996 China reportedly began helping Iran develop indigenous anti-ship cruise missiles based on Chinese designs.

In August 1996 China and Iran signed a $3 billion deal that included the sale of Chinese ballistic missiles, missile guidance technology (including sensitive gyroscopes), and missile production equipment, according to a CIA report. 16

Under U.S. pressure, however, China began to curb its missile cooperation with Iran. On January 20, 1998, U.S. Defense Secretary William Cohen received personal assurances from Chinese President Jiang Zemin and Defense Minister Chi Haotian that China had halted transfers of anti-ship cruise missiles to Iran and Beijing would not help Iran to upgrade its current cruise missile inventory. 17

Iran and North Korea reportedly had worked together to improve the accuracy of the Chinese C-802, an anti-ship cruise missile with a range of 80 miles that Iran bought from China from the mid-1990s. Tehran purportedly took delivery of about 150 C-802 missiles. However, China suspended the C-802 sale under U.S. pressure. 18

In another development, The Washington Times reported that China signed an $11-million contract with Iran to upgrade Iran’s FL-10 anti-ship missile. 19

In April 2004 despite China's application to join the Missile Technology Control Regime, (a voluntary group of 34 countries that share the goal of non-proliferation of unmanned delivery systems capable of deliverying weapons of mass destruction) the State Department sanctioned five Chinese companies, including Norinco and the China Precision Machinery Import/Export Corporation, for transferring cruise and ballistic missile components and technology to Iran.

In August 2007 the leaders of China and Iran, along with Russia, said that Central Asia should be left alone to manage its stability and security, in an apparent warning to the United States to avoid interfering in this strategic, resource-rich region. The threat came at a meeting of the Shanghai Cooperation Organization. 20


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1. http://www.icocic.net/events.html

2. http://www.washingtonpost.com/wp-dyn/articles/A55414-2004Nov16.html

3. http://www.cfr.org/publication/10883/rise_of_the_shanghai_cooperation_organization.html

4. http://www.parstimes.com/opinion/2005/iran_nuclear_ambitions.html

5. http://www.washingtonpost.com/wpdyn/content/article/2006/02/17/AR2006021702146.html

6. http://www.payvand.com/news/06/jul/1078.html

7. http://www.payvand.com/news/06/may/1046.html

8. http://www.busrep.co.za/index.php?fSectionId=613&fArticleId=377684

9. http://www.iht.com/articles/2007/04/09/business/chioil.php

10. http://www.pinr.com/report.php?ac=view_report&report_id=456&language_id=1

11. http://www.nti.org/db/china/miranpos.htm

12. http://www.nti.org/db/china/miranpos.htm

13. Shirley A. Kan, “Chinese Proliferation of Weapons of Mass Destruction: Current Policy Issues,” CRS Issue Brief, October 17, 1996, p. 5; Gordon Jacobs and Tim McCarthy, “China's Missile Sales—Few Changes for the Future,” Jane's Intelligence Review, December 1992, p. 560.

14. Reuters, October 12, 1994; In Executive News Service, October 12, 1994; Defense News, October 17-23, 1994, p.64; Douglas Waller, et al., “Sneaking in the Scuds,” Newsweek, June 22, 1992, pp. 42-46; “China Deepens Arms Relationship with Iran,” Iran Brief, October 1, 1996, p. 2; Gordon Jacobs and Tim McCarthy, “China's Missile Sales — Few Changes for the Future,” Jane's Intelligence Review, December 1992, p. 560

15. http://www.nti.org/db/china/mtcrorg.htm

16. The Iran Brief, October 1, 1996, p.4; and December 5, 1996, p.6; Al-Sharq Al-Awsat (London), August 29, 1996; in FBIS-NES-96-169, August 29, 1996.

17. “China's President Assures Cohen on Iran Missile Sales,” Reuter, January 20, 1998; John Pomfret, “Cohen Hails Achievements In China Visit,” Washington Post, January 20, 1998, p. A-11; Bill Gertz, “China to Halt Missile Sales to Iran,” Washington Times, January 20, 1998, p. 1; Department of Defense News Briefing, January 20, 1998.

18. Michael Evans, “Tehran Upgrades Chinese Missile,” The Times (London), January 11, 2000.

19. Bill Gertz, “China Agrees to Deal With Iran on Missiles,” The Washington Times, August 19, 1999. p. 1.

20. http://www.washingtonpost.com/wp-dyn/content/article/2007/08/16/AR2007081601221.html


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