By Mohammad Khatibi

Expert says Chinese investment in Iran difficult under sanctions, but possible with determination 

December 13, 2025 - 21:58

TEHRAN – In the midst of intensifying regional tensions and the enduring weight of Western sanctions, the future of China–Iran relations remains a subject of growing international interest. To better understand the dynamics shaping Beijing’s approach to Iran, The Tehran Times spoke with Professor Hongda Fan, director of the China–Middle East Center at Shaoxing University.

In this wide-ranging conversation, Professor Fan explores how sanctions have constrained economic cooperation, the sectors most affected, and the strategies both nations might employ to sustain ties under pressure. He also reflects on the broader geopolitical context — from China’s balancing act with the United States and Persian Gulf states to the implications of a shifting multi-polar order.

Below is the full text of the interview, edited for clarity and conciseness:

How have the recent supposed reimposition of United Nations sanctions shaped China’s willingness and approach to economic and trade cooperation with Iran?

To be frank, sanctions are the biggest obstacle to China's powerful companies and enterprises doing business with Iran. Although Iran is a populous country and China has been promoting foreign trade and investment, Iran is currently not China's main partner in West Asia in terms of both trade and investment. I believe that the issue of sanctions is the fundamental obstacle.
It is particularly important to note that in addition to sanctions, Iran's investment and trade environment also has some negative impacts on China's enthusiasm and willingness. Especially the investment environment in Iran does need to be improved.

What effects have sanctions had on China’s investment strategies and sectoral priorities in Iran?

It is obvious that when considering investing in Iran, China will first choose the sectors that are least likely to be sanctioned. This certainly cannot meet Iran's demand for external investment. One of the purposes of sanctions is to limit Iran's rise in power, so currently it is difficult for Iran to attract external investment in some key sectors.

Under persistent sanctions, what mechanisms and strategies can China and Iran employ to sustain and advance bilateral economic cooperation?

The bilateral trade and investment volume between China and Iran largely indicate the difficulties in cooperation between the two countries. In today's turbulent global environment, many countries are seeking new ways of cooperation, which is closely related to the adjustment of the international landscape. 

In this process, I believe that the decision maker's determination is very important. If China and Iran truly consider each other as their long-term and steadfast partners, I believe both Beijing and Tehran will have enough wisdom to advance bilateral cooperation.

If sanctions are reduced or lifted, which emerging sectors are likely to offer the greatest potential for expanded China–Iran economic collaboration?

I, like the Iranian people, long for sanctions to be lifted as soon as possible. Once sanctions are reduced or lifted, I believe China will try to cooperate with Iran in multiple sectors, including infrastructure construction, new energy, new technology, manufacturing, etc. If the strategic mutual trust between the two countries is satisfactory, I even believe that cooperation in the military field is possible.

How is China’s approach to security and defense cooperation with Iran?

Given that a war was recently imposed on Iran and considering China’s foreign cooperation in recent years, there is virtually no precedent for supplying weapons to countries in or near active conflict; therefore, it does not appear that China would move toward military or defense deals with Iran in the near future. Moreover, cooperation in security and defense depends on long-term strategic mutual trust, which China and Iran have not yet developed—sanctions are not the sole reason.

To what extent is China prepared to provide diplomatic, economic, or multilateral support to Iran in international forums amid sanctions?

Whether in bilateral or multilateral diplomatic occasions, we have already seen China's firm support for Iran. Looking at the interaction between political figures from the two countries, at China's diplomatic 
performance at the United Nations and the International Atomic Energy Agency (IAEA), and at China's condemnation of Israel for launching the 12-day war, I believe Iranian friends have seen China's diplomatic support for Iran. As for economic support, China's continued import of Iranian oil despite sanctions is itself a form of support for Iran.

How do China’s relations with other major powers and regional actors, particularly the United States and Persian Gulf states, affect its decision-making regarding security and diplomatic engagement with Iran?

The relationships between countries in West Asia are very complex. I disagree with countries such as Israel and the United States that believe Iran is the root cause of current regional issues. 

But I believe that Iran is indeed at the center of regional conflicts. In addition, the long-term confrontation between Iran and the United States is still ongoing. All of these factors make many countries cautious when dealing with Iran. However, as the world's second largest power, China is increasingly less influenced by third-party factors when interacting with Iran. Bilateral interests are becoming the core determining factor of Beijing's policy towards Tehran.

Considering the global shift toward a multi-polar order, how might China adapt its Middle East policies, particularly toward Iran, in response to sanctions, regional dynamics, and emerging economic opportunities?

I believe that Beijing hopes the sanctions imposed on Iran can be lifted soon and will work towards this end. Beijing certainly does not want to see continued regional unrest. After all, a stable and peaceful West Asia is more beneficial to China. If sanctions and regional instability continue, the attractiveness of West Asia and Iran to the outside world will decrease, and Beijing will have more exchanges with other countries.