sunset from behind the wire

sunset from behind the wire

Thursday, September 14, 2017

China - Iran Trade Nexus

As part of its Belt and Road Initiative, China is boosting its economic and transport cooperation with Iran, which will be used as a transport and logistics hub for China’s trade with Turkey and Europe. This creates new opportunities for Central Asia countries, which would increase the transit of Chinese goods by rail to Iran. 

According to Eurasianet, Iran intends to expand its railway network and align it with other Belt and Road Initiative rail projects in Central Asia.

China is providing $1.5 billion in financing to electrify the Tehran-Mashhad trunk line, and another $1.8 billion to establish a high-speed rail connection linking Tehran, Qom and Isfahan. In return, Iranian authorities are slashing transit tariffs for Chinese goods, according to railway chief Saeed Mohammedzadeh. 

In May, Iran joined Chinese President Xi’s Belt and Road Initiative in order to upgrade its rail infrastructure. China sees Iran as its switching point for shipping goods west to Europe through Turkey and south to Iranian ports on the Persian Gulf.

The terms of Iranian participation will be important because the Iran initiatives could become a more secure alternative to the China-Pakistan Economic Corridor. China’s determination to reach the Mediterranean and west Asia means that any Western attempts to reimpose sanctions on Iran will be frustrated. 

The communist mandarins in Beijing are not interested in sectarian conflicts, but in making profits and extracting resources, both of which require stability. Thus, they'll pressure Iran to do things that will promote stability. Whether or not they are successful is something else all together.