China eyes trade, Silk Road projects with Iran as sanctions go

Buoyed by the historic nuclear deal reached between world powers and Iran, China is eyeing big openings for trade and the ambitious Silk Road projects with the Islamic Republic as the economic sanctions that isolated the country are set to go.
The deal struck between the six world powers -- the US, UK, France, China, Russia and Germany -- and Iran yesterday in Vienna will enable a revitalised sanction-free Iran to boost trade and cooperation with China, analysts said.
Li Shaoxian, an expert in Middle East studies at Ningxia University, said the reopening of the Iranian market would increase competition between China and the West.

China, however, has an advantage of having a rich knowledge of the Iranian market and huge foreign-exchange reserves for investments.
"In the long run, the focus will of course be on the development of Iran's infrastructure and oil and gas sector," said Shada Islam, policy director of the Brussels-based thinktank Friends of Europe.
"Given its location and diverse regional interests, Iran will also inevitably play a crucial role in China's (new) Silk Road proposal," Islam told the state-run China Daily.

An Huihou, China's former ambassador to Egypt, said Iran has a strong desire to participate in Silk Road initiatives amid Tehran's ambitious plans to revive its economy.

Closer economic links would also boost the "going global" strategy of Chinese enterprises and further elevate China's ties with other Middle East countries, said An.
Iran, a key stop in the ancient Silk Road project, has also joined China-led Asian Infrastructure Investment Bank as a founding member.
The ambitious Silk Road initiative, for which Chinese President Xi Jinping has set up a USD 40-billion fund, has several components.
While the China-Pakistan Economic Corridor, linking China's Xinjiang with Gwadar port in the Arabian Sea close to Iran has been launched, Beijing is lobbying hard with various countries to commence the projects under One Belt and One Road project.

Iran could also become a major source for energy-hungry China which imports a substantial amount of energy from Iran.
Two-way trade volume between Iran and China had reached a record USD 51.8 billion last year, up 31.5 per cent from 2013.
The major items that China, the world's largest energy consumer, imports from Iran include crude oil and iron ore.
Iran has the world's fourth-largest oil reserves and the second-largest reserves of natural gas.
Fraser Cameron, director of the Brussels-based EU-Asia Centre told the daily that "Iran could quickly become a major economic power in the Middle East," Cameron said.

"It occupies a key geostrategic situation and could be an important hub for the new Silk Road initiatives. China-Iran relations could also develop quickly since they have complementary economies.