Dr Mohammad Mahdi Mazaheri
Researcher in International Relations / Director of the Centre for Dialogue and Cooperation of Silk Road Nations
In recent years, amid the intensification of Western sanctions against Iran, the relationship between the Islamic Republic of Iran and the People’s Republic of China has evolved and become multifaceted. Rooted in shared strategic and economic interests, this partnership has been shaped by both regional and international dynamics, and has entered a new phase following Israel’s 12-day attack on Iran in June 2025.
From Iran’s perspective, the main priorities in its relations with China include reducing dependency on oil revenues, diversifying non-oil exports, attracting foreign investment into critical infrastructure and industries, and circumventing unilateral Western sanctions. Iran seeks a powerful partner capable of supporting its technological advancement, infrastructure development, and economic growth. Moreover, Beijing’s political backing in international forums—especially in countering Western pressures, is of significant value for Iran. Expanding defence and security cooperation is also among Iran’s core interests in this bilateral relationship.
Conversely, China’s primary concern vis-à-vis Iran lies in ensuring regional stability and security in West Asia, which is essential for uninterrupted energy supply and maintaining international trade routes. As the world’s largest energy consumer, China requires oil and gas imports from Iran, as a stable source. Furthermore, the “One Belt, One Road” (OBOR / BRI) initiative, along which Iran is situated, holds immense geostrategic significance for Beijing. China seeks stable relations with all regional actors to safeguard its economic and geopolitical interests and avoids military tensions that might jeopardise its investments and trade routes. Balancing relations with other regional countries, particularly Arab states and even Israel remains critical for China, so that it can function as a neutral and effective mediator.
Despite these somewhat divergent concerns, bilateral relations between Iran and Chine possess vast untapped potential for expansion. The 25-Year Comprehensive Strategic Partnership Agreement between the two countries has opened new horizons in several domains:
Economic and Trade Dimensions
Iran, as one of the world’s largest holders of oil and gas reserves, and China, as the world’s largest energy consumer, enjoy a natural economic complementarity. Beyond hydrocarbons, significant potential exists for Iran to export non-oil goods, while importing Chinese technology and industrial goods. Iran’s Steel and iron products, as well as knowledge-based products such as nanotechnology and biotechnology, which are among Iran’s scientific strengths, and traditional handicrafts and Persian carpets, could find niche markets in China.
Infrastructure and Development
Chinese investment in Iran’s infrastructure including transportation (railways, roads, ports), energy (power plants, refineries), and communications (5G expansion) can meaningfully contribute to Iran’s economic development. Key projects include the completion of East-West and North-South rail corridors, the development of Makran coasts and Jask port, desert reclamation, and sustainable agricultural expansion.
Technology and Innovation
Collaboration in cutting-edge fields such as artificial intelligence and autonomous vehicles can significantly enhance Iran’s scientific and industrial capabilities through technology transfer.
Geopolitical and Regional Cooperation
Both Iran and China advocate for a multipolar world order and the reduction of U.S.-led unilateralism. Iran’s membership in the Shanghai Cooperation Organisation (SCO) and BRICS presents new avenues for political and security alignment.
Nevertheless, the realisation of these opportunities faces numerous obstacles:
Western Sanctions
The most formidable barrier to expanding bilateral relations remains the continuation and intensification of U.S. and Western sanctions against Iran. These sanctions deter major Chinese corporations from engaging with Iran, restricting cooperation largely to smaller and non-state firms or through complex workaround mechanisms. Notably, Iran’s share in China’s total foreign trade in 2024 was a mere 0.02%—a 9% decline from the previous year—while China’s total global trade volume grew by 7%, reaching $6.1 trillion globally.
Trade Imbalance
A significant portion of Iran’s exports to China comprises raw materials, including crude oil and derivatives, ethylene polymers, petrochemicals, iron ore, agricultural products, and dried nuts and fruits. In contrast, China exports high-value goods to Iran, including industrial machinery, vehicles and spare parts, electronics, telecommunication devices, plastics, steel, household appliances, and textiles. Based on Chinese customs data—which exclude Iranian oil imports due to sanctions—the bilateral trade volume in 2024 was approximately $13.4 billion, with $8.9 billion representing Chinese exports to Iran and only $4.4 billion as Iranian exports to China. These numbers show that the trade balance is heavily skewed towards China. Although accounting for Iran’s unrecorded oil exports to China, will reduce the trade imbalance, selling raw products in the long term is a significant problem for Iran. This quantitative and qualitative imbalance could, in the long run, lead to Iran’s economic dependency, weaken its bargaining position, and potentially result in the strategic influence and dominance of China over Iran.
Regional and Geopolitical Considerations
Given its broad interests in West Asia, China consistently pursues balanced relations with all regional actors and avoids publicly taking clear sides in regional disputes. This stance may not always align with Iran’s expectations during critical junctures.
Internal Challenges within Iran
Cumbersome bureaucracy, ineffective laws governing foreign investment, and lack of transparency in project execution can hinder cooperation. Moreover, shifts in foreign policy priorities with each change in government and instability in management can act as a significant barrier for the implementation of agreements and may obstruct the implementation of agreements and utilisation of their full potential, and in the long term can significantly undermine long-term relations.
China’s Deliberate Neutrality and Pragmatism
The 12-day Israeli attack on Iran in June 2025 revealed a different image of Eastern allies and security organisations like the SCO to Iran and exposed new challenges to expanding relations with the East. China’s response to this event was marked by urging restraint and peaceful conflict resolution. Predictably, Beijing merely expressed “deep concern” for the significant consequences of Israel’s attack, labelled the assault inconsistent with the UN Charter, and emphasised that “no party benefits from this sudden escalation.” Some Chinese think tanks likened this posture to the proverb “sitting atop a mountain watching tigers fight,”, which in Chinese literature implies deliberate neutrality in crises deemed too costly or lacking immediate benefit to China.
This cautious approach displays, that although China’s general policy is to oppose Western unilateralism and aggressive policies in principle, its practical priorities remain regional stability and protecting its wide ranging economic interests. China showed that it has no interest in direct involvement in regional military conflicts.
During the Israeli regime’s attack and later the U.S. attack on Iran, Beijing demonstrated a clear reluctance to take proactive or operational roles in managing global and regional issues, especially when the U.S. is involved. Instead, China pursues its interests through expanding trade or at most backchannel diplomacy.
Following the ceasefire, Iran sought to procure advanced military equipment from China to rebuild its defence capabilities. However, a statement by the Chinese diplomatic mission in Israel reaffirmed that “China never exports weapons to countries engaged in warfare and maintains strict controls on the export of dual-use items.” This suggests that Iran’s realistic expectations from China should centre more on diplomacy and mediation. Although economic interests could push China toward covert military-security dealings with Iran as well, this would primarily require a form of military diplomacy.
In conclusion, at this juncture, Iran is more eager than ever to strengthen its ties with China. However, Beijing, while maintaining friendly relations, stresses the imperative for political settlement and the reestablishment of peace and stability in the region, and simultaneously strives to balance its engagements with other key players. The Iran–China relationship, despite its unique economic, infrastructural, and geopolitical potential, operates within a complex matrix of sanctions, regional security concerns, and China’s diplomatic considerations. Within the Middle East’s complex puzzle, China has adopted a pragmatic and cautious approach that prioritises economic interests and regional stability over full alignment with any particular side.
In this context, as influential global powers either align with the West or, while professing multilateralism, avoid direct confrontation with the U.S., the Islamic Republic of Iran must embrace a more diversified foreign policy and avoid over-reliance on one or two global actors.
Specifically in relation to China, Iran’s active diplomacy should focus on operationalising the 25-year cooperation program, attracting genuine investment, boosting non-oil exports, and leveraging China’s tech enterprises to adapt to global transformations. One of the most effective strategies for expanding cooperation with China is to create and expand deep economic relations—mirroring the approach of key Persian Gulf states— to become an important part of China’s supply and value chain to bind Chinese economic interests to comprehensive support for Iran.
Ultimately, the future of Iran–China relations hinges on Tehran’s nuanced understanding of China’s global posture and on Its capacity to strategically exploit emerging opportunities in rapidly shifting regional and global developments.
