EghtesadOnline: Iran’s second national pavilion in China was launched in Ningbo, a sub-provincial city in northeast Zhejiang Province, on Saturday.
“Establishded in a 300-square-meter area, the pavilion has been launched with the aim of introducing Iran’s goods and services to promote exports and attract foreign investment,” said Ali Dehqani, Iran’s commercial attaché to Shanghai, IRNA reported.
“The port city of Ningbo has a population of 8 million and is among 15 regions in which the Chinese government has issued permits for the establishment of free trade zones,” he added.
Ningbo is the only free trade zone in Zhejiang Province. It was established by State Council in 1992, covering an area of 2.3 square kilometers. It lies in the middle of the coastline of mainland China, at the southern end of Yangtze River Delta, according to Financial Tribune.
According to Dehqani, Ningbo is the world’s fifth top trading port.
He noted that the pavilion has 60 booths displaying products and services related to economic, business, construction and technology fields.
A tariff-free regime is one of the advantages of sales of Iranian products in Chinese free trade zones.
Iran’s first national pavilion was launched in the Shanghai Free Trade Zone in March. The center displays a wide range of Iranian products such as handicrafts, hand-woven and machine-made carpets, high-tech products, petrochemicals, construction stones, food, nuts and tourism services, among others.
According to China Daily, the two-story pavilion is situated at Waigaoqiao, an area of Shanghai’s free trade zone spread over 5,400 square meters. The lower story is used for exhibition and demonstrations, and the upper story is the office of Iran’s enterprises.
Deep Economic Ties Getting Stronger
China is Iran’s top trading partner. Iran’s exports to China in 2017 witnessed a 25.2% rise compared to 2016 to reach $18.58 billion, according to Hossein Roostaei, an official with the Trade Promotion Organization of Iran.
“Iran’s major commodities exported to China last year included crude oil, polyethylene, methanol, sulfur, styrene, iron ore, copper ore, purified copper, chromite, lead ore, zinc ore, marble and travertine,” he said.
Iran’s outgoing ambassador to China, Ali Asghar Khaji, told Global Times in a recent interview: “China and Iran are enjoying good relations in the political, economic, industrial, investment and energy sectors, and bilateral ties are expected to expand after the meeting between Chinese President Xi Jinping and Iranian President Hassan Rouhani,” Khaji said.
Abdolnasser Hemmati was appointed as Iran’s new ambassador to China on the recommendation of Foreign Minister Mohammad Javad Zarif and the approval of President Hassan Rouhani, IRNA reported on Sunday.
Rouhani was in China for a working visit as well as the annual Shanghai Cooperation Organization summit earlier this month in the Chinese coastal city of Qingdao in Shandong Province. Iran is an observer member of SCO.
“China is not only Iran’s biggest trade partner, but also one of the major investors in our country,” Khaji said.
In July 2017, China signed a contract with Iran to finance the electrification of a 926-km railroad from Tehran to the northeastern city of Mashhad in Khorasan Razavi Province with a $1.5 billion loan. This was the first foreign finance in an Iranian project after Iran signed the nuclear deal with six world powers, including USA.
The railroad is a strand of the so-called New Silk Road–a 2,300-kilometer Chinese railroad that links Urumqi, the capital of China’s western Xinjiang Province, to the Iranian capital Tehran, connecting Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan along the way.
The Belt and Road initiative, put forward in October 2013 by Chinese President Xi Jinping, includes several corridors through land and sea, including the New Silk Road rail route, which will serve as a tailwind for the transport of goods and energy between Iran and China.
According to Washington Times, Iran occupies a strategic node in Beijing’s ambitious foreign investment strategy.
After French petroleum giant Total, which last year signed a $4.8-billion contract to develop a portion of the South Pars Gas Field—the world’s largest—pulled out, citing looming US sanctions, Iranian Oil Minister Bijan Namdar Zanganeh has said the state-owned China National Petroleum Corp., which already owns 30% of the South Pars project, could take over Total’s 50.1% stake.
“If the US administration does not agree with Total staying in Iran, China will replace this company,” Zanganeh said in a statement last month.
The Commerce Ministry in Beijing said last week that China will maintain normal relations with Iran.
Gao Feng, the ministry’s spokesman, made the statement when asked at a regular news briefing if Chinese firms would withdraw from the Iranian market as US President Donald Trump pulled the United States out of an international nuclear deal with Iran in May and said he would reimpose harsh sanctions on Tehran.
China’s adeptness at doing business with Iran through state-owned companies not exposed to the American financial systems is expected by some to make Beijing the biggest beneficiary of Trump’s move to withdraw from the nuclear deal.
“The dynamics of the US withdrawing from the [nuclear] deal and leaving European sides scrambling to protect their business interests has led to Iran reaching out to China and encouraging it to commit to investing,” said Ahmad Majidyar, an Iran analyst with the Washington-based Middle East Institute, the Washington Times wrote in an article.
“China is looking to fill the void left by departing companies. But they face a dilemma: How will they maneuver around what new sanctions or conditions emerge? That remains to be seen.”
Carleton Greene, a former high-level sanctions official in the US Treasury Department, said it is entirely plausible that China could benefit from a reduction in competition from European companies fleeing business opportunities in Iran because of the threat of reimposed sanctions.