The leader of Iran’s agency responsible for managing foreign investments asserted the country has documented a ten-fold increase in the amount of Chinese money flowing into Iran in the past year, the regime-linked Tasnim News Agency reported on Tuesday.
China’s investments in Iran rose from $300 million to $3 billion within the last year, Ali Fekri, the head of the Organization of Investment, Economic and Technical Assistant of Iran (OIETAI), was quoted as saying.
The prodigious increase in the amount of Chinese money circulating the Iran, the world’s foremost state sponsor of terrorism, is occurring as Beijing seeks a greater political role in the Middle East through both economic influence and alliances with anti-Israel and anti-American governments. With Iran, the Chinese Communist Party has endeavored to strengthen its ties by helping Iran improve its relations with neighbors directly, including brokering a historic deal in 2023 that allowed Iran to reopen its embassy in Riyadh, Saudi Arabia, and begin mending fences with its top geopolitical rival.
The China-Iran-Saudi Arabia agreement allowed China and its allies to welcome both countries into the BRICS alliance – named after founding members Brazil, Russia, India, China, and South Africa – in January. BRICS is primarily an economic bloc in which members help each other overcome Western human rights sanctions and become more independent from the U.S. dollar, but also operates on a political level, advancing the interests of its members at international venues such as the United Nations.
Chinese Ambassador to Iran Chang Hua L and Iran’s Vice President for Parliamentary Affairs Mohammad Hosseini attend a ceremony celebrating the 74th anniversary of the founding of the People’s Republic of China PRC in Tehran, Iran, on Sept. 12, 2023. (Shadati/Xinhua via Getty Images)
Fekri, in his remarks to the IRNA, appeared to be attempting to dispel concerns from allies that American and other Western sanctions on Iran, in response to Iran’s outsized role in funding jihadist terrorism around the world, was taking its toll on the Iranian economy. Tasnim quoted Fekri as stating that, under current Iranian President Ebrahim Raisi, Iran has attracted $10,608 billion in foreign direct investment (FDI).
While China is responsible for a significant percentage of the money, Russia remains the top investor in Iran since 2021. Russia has reportedly invested $2.7 billion in Iran since Raisi took office.
“Over the course of the Raisi administration until December, a total of $10.6 billion in capital entered Iran, with Russia accounting for approximately $2.7 billion of the amount. The oil and gas sector saw the highest capital attraction, with five investments totaling around $4.8 billion,” Fekri said in the interview, according to the anti-regime outlet Iran International.
China is rapidly competing with Iran for influence in the Iranian economy, using sweeping economic agreement structures to commit Iran to welcoming its corporations. In 2021, shortly before Raisi became president, Iran and China signed a “Comprehensive Strategic Partnership” agreement that reportedly promised Iran $400 billion in Chinese investment during a 25-year period. The deal covered a wide variety of economic sectors, prominently including oil and mining, as well as strategic sectors such as intelligence sharing and military development.
At the time, Iranian then-Foreign Minister Javad Zarif declared China a “friend for hard times” and praised the country for ignoring the various human rights abuses and illegal nuclear development schemes that triggered international sanctions on Iran.
Aside from its special, 25-year deal with China, Iran is a member of the Belt and Road Initiative (BRI), Beijing’s debt-trap scheme in which it offers vulnerable countries predatory loans meant to be used to pay Chinese companies to complete infrastructure projects.
“Iran enthusiastically backed the BRI from the start,” Hamed Vafaei, chair of Chinese Language and Literature at University of Tehran, told the Chinese state-run newspaper Global Times in August. “Iranian enterprises, in particular, seek to join the BRI cooperation projects. Iranians have been actively discussing the topic since the introduction of the BRI, including the impact of the BRI on both China and Iran.”
Vafaei said that both Iranian and anti-American countries “worry that US hegemony and unilateralism are destroying the present international order. In contrast, they are more welcoming of China, and many people are eager to understand what the BRI entails, and they have discovered that some policies inside the initiative’s framework are win-win and just.”
In reality, the BRI has resulted in disaster for some of the most impoverished countries participating – including Kenya, Sri Lanka, and Greece – including China seizing pivotal state projects, hacking into sensitive servers, and abusing locals.
Iran has yet to suffer the worst consequences of the BRI, which in some countries have included the seizure of ports and physical abuse of local workers, and continues to openly boast of joint Chinese projects with enthusiasm. On Monday, Mayor Alireza Zakani of Tehran announced that a visit to China in October yielded at least three contracts for “the purchase of 751 railway wagons, one million vans, motorcycles, and buses, as well as the construction of metro line 11.”
“We have finalized agreements to develop five five-star hotels in collaboration with Chinese companies, industrialize 200,000 housing units, and establish two amusement parks and two water parks in Tehran,” Zakani reportedly added.
Respectable housing for Iranians is a major point of contention in Tehran, Iran International reported, as the crowded metro area is in desperate need of new housing and Raisi made building new housing a prime campaign promise in 2021.
China’s increased ties to Iran have not come without a price. The United States imposed new sanctions on February 2 on several Chinese companies in response to their growing presence in Iran, accusing the companies of aiding Iran’s ballistic missile and drone programs.
“Iran’s continued proliferation of its advanced conventional weapons, including the UAVs and missiles that target U.S. soldiers, remains a critical threat to the stability of the region,” Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson said, announcing the sanctions.
Among the affected companies is the China Oil and Petroleum Company Limited (COPC), which the U.S. Treasury described as a front for the Islamic Revolutionary Guard Corps (IRGC) Quds Force, the foreign terrorism wing of the IRGC, a U.S.-designated terror organization and a formal wing of the Iranian armed forces.
“Hong Kong-based IRGC-QF front company China Oil and Petroleum Company Limited (COPC) has arranged contracts and sold hundreds of millions of dollars’ worth of Iranian commodities for the benefit of the IRGC-QF,” the Treasury asserted.
China has also suffered from the effects of Iranian proxy terrorism in the Middle East, particularly the campaign by the Yemen-based Houthi terrorists against global shipping in the Red Sea. The Houthis announced they would attack “Israel-linked” ships near the Bab el-Mandeb Strait that leads to the Red Sea, where a significant percentage of global commercial shipping enters the Suez Canal, in support of the October 7 terrorist assault by Hamas. The attacks have led many companies to redirect their ships across the Cape of Good Hope in Africa, a far longer and more expensive journey, affecting Chinese cargo even as the Houthis promise not to attack Chinese-flagged ships.
