Chinese enterprises will not pull out of Iran after US sanctions kick in, but they may face a tough business environment due to pressure from the US, Chinese analysts said following reports that the US demanded China and other countries cease imports of crude oil from Iran.

US officials warned allies that they should prepare to cut oil imports from Iran to zero by November or face US sanctions, the Washington Post has reported.

US officials have traveled in the last months to Europe and Asia to try to garner support for the administration’s tougher Iran policy. However, China will maintain its normal cooperation with Iran, said experts.

“China and Iran are friendly countries to each other. We maintain normal exchanges and cooperation on the basis of fulfilling our obligations under international law, including in the fields of economy, trade and energy. This is beyond reproach,” Lu Kang, spokesperson of China’s Ministry of Foreign Affairs, said recently. Hua Liming, a former Chinese ambassador to Iran, said Chinese enterprises in Iran, especially those in energy-related sectors, will face a tough business environment, and their operations will be affected due to the US sanctions.

“Currently, there are around 100 Chinese enterprises investing in industries such as energy, infrastructure and automobiles in Iran.  

The US may cut off remittance routes so that transactions between China and Iran are affected,” he said. China is Iran’s biggest oil customer.

According to the General Administration of Customs, China imported 39 million tons of crude oil in May and the total amount of crude oil China imported from January to May this year has increased 8.2% compared to the same period of last year.

Hua declared that Chinese companies will not follow European firms in withdrawing their business in Iran.  

Nearly a dozen European firms have canceled or suspended trade and investment deals with Iran after the US pulled out of the nuclear deal in May, Bloomberg reported.

Li Shaoxian, the head of Arab Research Institute at Ningxia University, said Chinese companies have kept normal business operations in Iran since 2012 when the administration of US former president, Barack Obama, tightened sanctions against Tehran, and this time, Chinese companies will be more determined to continue their operations in Iran.

But both Li and Hua warned that Chinese banks and companies have to prepare themselves for possible financial loss.

“To avoid possible financial loss in the US market, Chinese companies, especially those that have branches in the US, or are listed in the US stock market, should weigh their interests while operating in Iran,” Hua said, urging the firms not to sell US technology to Iran.

Will it be a matter of China shoring up a potentially massive overseas technology market, whilst Europe is forced to recede once more?

Again….China seems to win the peace….when will it end?

Happy reading!

Beijing Trend

Craven Fawcett



Takahama Industry Company Ltd

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