China-Iran Trade Report (March 2023)
Chinese Exports to Iran Surge
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for March 2023 shows a significant jump in Chinese exports to Iran. Exports totalled $1.5 billion—the highest monthly value since May 2018. However, March’s record-high exports are likely to be an outlier, with monthly exports expected to stabilise around $1 billion.
Electrical appliances (HS Chapter 85) drove March’s exceptional surge in the value of Iran’s imports from China. Tehran bought $522 million worth of Chinese electric machinery and parts, more than three times the monthly average recorded in 2022. Of this total, $427 million is categorised as “telephone sets, including smartphones and other telephones for cellular networks.” The figure is so high it seems like it could be an error.
In the same month, China exported $280 million of vehicles (HS Chapter 87) to Iran, returning to levels last seen before the Trump administration abandoned the JCPOA and reimposed secondary sanctions in 2018.
In March, Chinese imports from Iran totalled $445 million, consolidating the positive trend that followed December 2022 low point. Beijing imported $101 million of ores, slag, and ash (HS Chapter 26). March’s import of copper (HS Chapter 74) grew 152% compared to February, totalling $116 million. Consistently with the trend that began in July 2022, the value of Chinese declared imports of Iranian oil remained zero.
Following January and February seasonal contraction, China’s crude imports from the UAE and Malaysia recovered to $2.94 billion and $3.7 billion, respectively. In recent years, China has used the UAE and Malaysia as intermediaries to import undeclared Iranian oil. Beijing also reportedly uses Malaysia as a transfer point for Russian and Venezuelan crude. Iran’s oil continues to hold its share in the supply basket of Chinese teapot refineries despite the growing competition of the heavily discounted oil offered by Russia.
Record-high exports to Iran and the absence of declared oil imports further impacted the China-Iran trade balance, with Tehran continuing to run a trade deficit with Beijing.
Trends in Bilateral Trade
Trends in Imports
Imports
Exports
China-Iran Trade Report (January and February 2023)
Trade Falls As China Celebrates New Year
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for the first two months of the year show a typical seasonal contraction in China-Iran trade associated with the Chinese New Year holidays, which began on February 1. But while the seasonal decline in Chinese exports to Iran was in line with that seen in January and February 2022, Chinese imports from Iran remain below levels seen last year.
In January, bilateral trade totalled $1.26 billion, in line with the last two months of 2022. In February, the value of bilateral trade dropped by 34 percent to $842 million. The persistent absence of declared oil imports from Iran continued to drive the trade balance in China’s favour.
Chinese exports to Iran halved from $921 million in January to $489 million in February. The decline can mostly be attributed to a fall in Iran’s purchase of Chinese machinery (HS Chapter 84), electrical equipment (HS Chapter 85), and vehicles and transportation equipment (HS Chapter 87). Exports in these three categories totalled $307 million in February, $224 million less than in prior month.
China’s imports of Iranian goods saw less movement between January ($336 million) and February ($352 million) and showed a small improvement from December’s low point. In February, China imported $93 million worth of organic chemicals (HS Chapter 29) from Iran, more than double compared of January. Declared oil exports remain negligible.
In the first two months of 2023, China’s crude imports from the UAE and Malaysia dropped significantly after the record high levels recorded in December 2022. Such a contraction is consistent with the seasonal drop in demand due to the Chinese holidays. It does not suggest a change in China’s use of the UAE and Malaysia as intermediaries to import undeclared Iranian oil.
