Oil & Gas
One of the main pillars of the relationship is oil and gas. China switched to petroleum primarily to get their energy supply off of coal. There was a rapid increase in oil importation from 1974 into the 1990s. Now, approximately 80% of China’s total imports from Iran are oil and the rest is mineral and chemical products. Because of this reliance on Iranian oil and gas, China is now investing in the modernization of Iran’s oil and gas sector to secure access to the resource. The China National Petroleum Corporation (CNPC) was granted an $85 million contract to drill 19 wells in the natural gas fields in Southern Iran and signed another similar $13 million contract. Then again in 2004, an agreement was reached where China would import 270 million tons of natural gas over 30 years from South Par fields which is the richest natural gas fields in the world for $70 billion. Another Chinese company, Sinopec Group, gets half-share in Yardarvaran oil fields worth about 100 billion for the purpose of exploration. Later in 2007, CNPC signed a $3.6 billion deal to develop offshore gas fields in Iran and then signed another $2 billion contract to develop the northern Iranian oil field near Ahvaz. Not only is China helping to develop the oil and gas sector, but China supports Iran’s ambitions to bring Caspian Sea oil and gas to Southern Iranian ports through pipelines so the resources can be exported to Europe and Asia. Iran relies upon its oil sales to China to ensure its fiscal well-being. China also sells gasoline to Iran despite international pressures that have halted Iran’s ability to get gasoline from other suppliers.
China finds in Iran a permanent partner for its exports and a source for its growing energy demand. In March 2004, Zhuhai Zhenrong Corporation, a Chinese state-run company, signed a 25-year contract to import 110 million metric tons of Liquefied Natural Gas (LNG) from Iran. This was followed by another contract between Sinopec and Iran LNG, signed in October of the same year. The deal, worth $100 billion, adds an extra 250 million tons of LNG to China's energy supply, to be extracted from Iran's Yadavaran field over a 25-year period. In January 2009, Iran and China signed a $1.76bn contract for the initial development of the North Azadegan oil field in western Iran. In March the two countries struck a three-year $3.39 billion deal to produce liquefied natural gas in Iran's mammoth South Pars natural gas field. Because of its limited refining capacity Iran imports one third of its refined products such as petrol from China.
In 2011, the group Green Experts of Iran reported that Beijing and Tehran had signed an extensive deal that would give China exclusive rights to several Iranian oil and natural gas fields through 2024. Under the terms of the deal, Iran will give Chinese oil companies exclusive rights to three large regions of Iranian land as well as the rights to build all necessary infrastructure for these regions, all of which sit atop of large oil and natural gas fields. In return, China promises to treat any foreign attack against these regions as attacks against its own sovereign territory, and will defend them as such. China will have no need for prior permission from the Iranian government to maintain and increase its military presence in Iran, and will control the movement of Iranians in and out of these territories. The Green Experts of Iran speculate that this agreement was the concrete basis for Major General Zhang Zhaozhong's statement that "China will not hesitate to protect Iran even with a third World War."
Trade
There existed unofficial trade relations between Iran and China during the cold war and steadily increased. Trade reached 1.627 billion in the 1980s and 15 billion in 2007. In 2001, the volume of trade between Iran and China stood at roughly $3.3 billion, and in 2005, the volume of Sino-Iranian trade hit US$ 9.2 billion. Iran's Deputy Minister of Commerce Mehdi Ghazanfari speculated that trade exchanges between Iran and China will exceed $25 billion in 2008. In 2005, exports from China represented 8.3% of the total import market in Iran, giving China the second largest share of the market after Germany. China's exports to Iran have experienced particularly rapid growth in the past five years, with China replacing Japan as the world's second largest exporter to Iran. Iran's imports from China rose by 360% between 2000 and 2005. China is now responsible for about 9.5% of all Iranian imports. In 1988, the Iranian market opened up to Chinese industry when the PRC began economic restructuring. Once profitable trade relations were established, the PRC invested in Tehran’s subway systems, dams, fishery, and cement factories while Iran helped supply China with the highly desire minerals coal, zinc, lead, and copper. Trade between the two states also included power generation, mining, and transportation equipment along with arms and consumer goods such as electronics, auto parts, and toys. Iran–China trade value reached $30 billion in 2010 and is expected to increase to $50 billion by 2015.
Ali Akbar Salehi, Iran's former representative to the International Atomic Energy Agency, said that the two countries "mutually complement each other. They have industry and we have energy resources".
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