China pumps billions into Iranian economy as Western firms hold off
Chinese firms making major inroads into country’s economy as European businesses worry about risk of fresh US sanctions
China is financing billions of dollars worth of projects in Iran, making deep inroads into the economy while European competitors struggle to find banks willing to fund their ambitions, Iranian government and industry officials said on Friday.
Freed from crippling nuclear sanctions two years ago, Iran is drawing unprecedented Chinese funding for everything from railways to hospitals, they said.
State-owned investment arm CITIC Group recently established a US$10 billion credit line and China Development Bank is considering lending US$15 billion more.
“They [Western firms] had better come quickly to Iran otherwise China will take over,” said Ferial Mostofi, head of the Iran Chamber of Commerce’s investment commission, speaking on the sidelines of an Iran-Italy investment meeting in Rome.
The Chinese funding, by far the largest statement of investment intent of any country in Iran, is in stark contrast with the drought facing Western investors since US President Donald Trump disavowed the 2015 pact agreed by major powers, raising the threat sanctions could be reimposed.
Iranian officials say the deals are part of Beijing’s US$124 billion Belt and Road Initiative, which aims to build new infrastructure – from motorways and railways to ports and power plants – and link China with Europe and Africa to pave the way for an expansion of trade.