The relationship between the Islamic Republic of Iran and the People's Republic of China has taken on multifaceted dimensions in recent years, particularly with the escalation of Western sanctions against Iran. This relationship, founded on shared strategic and economic interests, has consistently been influenced by regional and international dynamics and entered a new phase following Israel's 12-day attack on Iran in June 2025.
In the landscape of Iran-China relations, the concerns of Tehran and Beijing represent two sides of the same coin: mutual interests viewed through different priorities. For Iran, this partnership is a crucial avenue to move away from a single-product economy and break the isolation imposed by Western sanctions. Tehran seeks to attract significant Chinese investment into its vital economic arteries—from infrastructure to modern industries—to diversify its non-oil exports. In the international arena, Iran views China as a strategic ally that can act as a political counterweight to Western pressure and deepen defense and security cooperation.
Conversely, China approaches this equation from a different perspective. Beijing's primary concern is ensuring stability in West Asia to secure the uninterrupted flow of energy and the safety of its trade corridors. For China, Iran is not only a stable energy supplier but also a key geostrategic link in its ambitious "Belt and Road Initiative." However, Beijing adopts a cautious approach, aiming to maintain a balance in its relations with all regional actors, including Arab nations and Israel. China's objective is to play the role of a powerful and impartial mediator, thereby preventing any tensions that could jeopardize its economic interests and substantial investments.
Despite the aforementioned, relatively distinct concerns, Iran-China relations possess significant potential for development. The 25-year Comprehensive Cooperation Agreement between the two nations has opened new horizons in various fields. These opportunities include:
Economic and Commercial:
As one of the world's largest holders of oil and gas reserves, Iran, and as the largest consumer, China, are natural economic complements. Beyond oil and gas, there is substantial potential for exporting Iranian non-oil products to China and importing technology and industrial goods from China. Steel and iron products, knowledge-based products such as nanotechnology and biotechnology (areas of Iranian scientific strength), and popular Iranian handicrafts and hand-woven carpets can find niche markets in China.
Infrastructure and Development:
Chinese investment in Iranian infrastructure projects—including transportation (rail, roads, ports), energy (power plants, refineries), and communications (5G development)—can significantly contribute to Iran's economic development. Opportunities include the completion of the East-West and North-South railway corridors, the development of the Makran coast and the port of Jask, desertification control, and assistance in developing sustainable agriculture.
Technology and Knowledge-Based Fields:
Technology transfer and cooperation in emerging fields like artificial intelligence and autonomous vehicles can lead to the enhancement of Iran's scientific and industrial capabilities.
Geopolitical and Regional:
Both Iran and China are striving to establish a multipolar world order and reduce American unilateralism. Iran's membership in the Shanghai Cooperation Organisation (SCO) and BRICS has created new opportunities for political and security convergence. However, the mere existence of abundant opportunities and favourable conditions does not necessarily guarantee the realisation of Iran-China cooperation across various domains, as numerous challenges lie on this path.
Western Sanctions:
The most significant obstacle to the development of relations is the continuation and intensification of US and Western sanctions against Iran. These sanctions cause major Chinese companies to hesitate in cooperating with Iran, generally limiting partnerships to smaller, non-state-owned enterprises or requiring more complex mechanisms. In this context, Iran's share of China's total foreign trade in 2024 was a mere 0.2% (a 9% decrease from the previous year). This is while China's global trade amounted to $61 trillion in the same year, with its trade with the rest of the world increasing by 7%.
Trade Imbalance:
The bulk of Iran's exports to China consists of raw materials (crude oil and petroleum products, ethylene polymers and other petrochemicals, iron ore and other minerals, agricultural products, and dried nuts). In contrast, China's exports to Iran—in terms of both quantity and quality of goods (machinery and industrial equipment, vehicles and auto parts, electronics and telecommunications equipment, plastic products, iron and steel and their manufactured goods, home appliances, textiles, and apparel)—give it the upper hand. According to Chinese customs statistics, which do not account for Iranian oil imports due to sanctions-related issues, the trade volume between Iran and China in 2024 was approximately $13.4 billion, of which $8.9 billion was Chinese exports to Iran and $4.4 billion was Chinese imports from our country. These figures show a trade balance heavily skewed in China's favour. Although including Iranian oil exports would somewhat reduce this imbalance, the long-term reliance on selling raw materials is another serious problem. This quantitative and qualitative imbalance could, in the long run, lead to Iran's economic dependency on China, reduce the country's bargaining power in political negotiations, and even result in China's strategic influence and dominance over Iran.
Regional and Geopolitical Issues:
Due to its extensive interests in the West Asia region, China consistently seeks to maintain balanced relations with all regional countries and is reluctant to take a clear side in regional conflicts. This approach may not meet Iran's expectations at critical junctures.
Iran's Internal Obstacles:
A vast and complex bureaucracy, inefficient laws and conditions for attracting foreign investment, and an occasional lack of transparency in project implementation can slow down the pace of cooperation. Furthermore, shifts in foreign policy approaches following each change in government and a lack of managerial stability can act as serious impediments to the operationalisation of agreements and the full utilisation of cooperation potential, posing fundamental challenges to the future of these relations in the long term.
China's Calculated Neutrality:
The 12-day Israeli attack on Iran in June 2025 revealed another side of Iran's Eastern allies and security organisations like the SCO, unveiling a further challenge in developing relations with the East. China's position on this event was marked by an emphasis on restraint and the peaceful resolution of conflicts. Beijing (as expected) merely expressed "deep concern" about the serious consequences of the Israeli attack, deeming the action contrary to the UN Charter and stressing that "no party benefits from this sudden tension." This stance was described by some Chinese think tanks as "sitting on the mountain to watch the tigers fight," a phrase in Chinese literature signifying a calculated neutrality in crises where the cost for China is high and no immediate benefits are perceived. This cautious approach indicates that while China's general policy is to resist "unbridled Western unilateralism" and "aggressive policies," its practical priority is regional stability and the protection of its vast economic interests, showing no inclination to become directly involved in regional military conflicts.
During the attacks by the Israeli regime and subsequently the United States on our country, Beijing clearly demonstrated that it does not desire to be an active player or take on an operational role in managing global and regional issues. Especially when the US is involved, it cautiously seeks to advance its interests through trade expansion or, at most, behind-the-scenes consultations. In the post-ceasefire and post-war period, Iran has sought to procure advanced military equipment from China to rebuild its defence capabilities. However, the statement from the Chinese diplomatic mission to the Israeli regime that "China never exports weapons to countries involved in war and has strict controls on the export of dual-use items" indicates that Iran's expectations of China should lie more in the realm of diplomacy and mediation. Nevertheless, economic interests could push China towards discreet military-security interactions with Iran, an endeavour that would require a specific kind of military diplomacy.
In summary, at the current juncture, Iran is increasingly seeking to strengthen its relations with China. Meanwhile, China, while cautiously maintaining friendly cooperation with Iran, emphasizes the need for a political settlement and the restoration of peace and stability in the region, simultaneously striving to maintain its balanced relations with other actors. The Iran-China relationship, despite its unparalleled economic, infrastructural, and geopolitical opportunities, navigates a complex environment of sanctions, regional security concerns, and China's diplomatic considerations. In the intricate puzzle of the Middle East, China has adopted a realistic and cautious approach that prioritizes economic interests and regional stability over full alignment with any single party.
Therefore, in a situation where the world's powerful and influential countries are either in the Western camp or, while declaring certain independent and multilateral positions, avoid confrontation with the West, particularly the United States, the Islamic Republic of Iran must increasingly consider a policy of diversification in its foreign relations and avoid sole reliance on one or two global powers.
Specifically concerning China, Iran's active diplomacy must focus on operationalising the 25-year cooperation agreement, attracting real investment, and increasing non-oil export capacity. It must make the most of the potential of Chinese technology companies to align itself with global transformations. One of the most effective methods for developing cooperation with China is for Iran to create and deepen economic ties—much like other influential Gulf states—to become part of China's value and supply chain, thereby tying China's economic interests to a comprehensive support for Iran. In this regard, the future of Iran-China relations will depend on a correct understanding of China's global approaches and interests and the intelligent capitalisation on opportunities within the context of rapidly evolving regional and global developments.
Mohammad Mahdi Mazaheri, University Professor
(The opinions expressed are those of the authors and do not purport to reflect the opinions or views of the IPIS)