Iran’s former ambassador to China on China’s view of sanctions

China's oil consumption (1980-2006)

Mohammad Hossein Malaek, Iran’s former ambassador to China, has written a short article for Iranian Diplomacy on China’s strategic and tactical view of US-backed sanctions on Iran.

He mentions that China has in fact managed to take some advantage of sanctions against Iran by improving its own access to Iranian energy relative to competing consumers.

Punitive measures targeting Iran’s energy industry in recent years have been a blessing for Beijing. They have given it a rare opportunity to invest in Iran’s lucrative fields. China has now actually become Iranian Oil Ministry’s first option.

…In negotiations, Beijing tries to persuade Iranians replace Western technology with Chinese technology.

He mentions that China pays for its oil in cash:

In the recent years, China has purchased an annual estimated value of 9 billion dollars of oil from Iran, the price of which it in pays in cash.

The former ambassador briefly touches on the logistical and legal headache associated with cash payments, existing sanctions against Iran, and the possibility of future sanctions.

U.S-supported sanctions could not freeze the trade partnership between Iran and China, but they add to the already existing problems. Tehran can still supply its demands through cash purchase and Beijing won’t cut THE economic ties. Things will be the same, only with more courts and legal obstacles.

…To keep up their exchanges with American fiscal institutes, Chinese banks have agreed not to issue letters of credit for Iranian traders and organizations and stop dollar-based transactions. Nevertheless, the stronger economic ties between Iran and China, the more difficult it gets for them to carry out financial proceedings.