Iran has been actively working to circumvent Western sanctions through strategic economic partnerships at both global and regional levels. By enhancing trade routes, joining multilateral organizations such as BRICS, and engaging in infrastructure projects like the International North-South Transport Corridor (INSTC), Iran aims to bolster its economic resilience. These efforts include strengthening ties with China and Russia, launching new trade corridors, and leveraging its strategic location to become a pivotal transit hub. These initiatives seek to mitigate the impact of sanctions and integrate Iran more deeply into the global economy, ensuring sustained economic growth and stability.
On July 21, the first transit train from China embarked on its journey to Iran via Kazakhstan and Turkmenistan, marking a significant milestone in the China-Iran-Europe rail corridor. The train, carrying car parts, is set to enter Iran through the Incheh Borun border terminal in the north-east. This development follows the launch of freight trains between the two countries, aimed at promoting trade and serving as a transit route between West Asia and Europe.
The inauguration ceremony of this new phase took place at the Aprin railway station. Key officials, including Seyyed Miad Salehi, the Islamic Republic of Iran Railways managing director, and ambassadors from China, Kazakhstan, and Turkmenistan, attended the ceremony. The Iranian train's journey highlights the strategic cooperation between Iran and its neighbors, enhancing their roles in East-West cargo transit.
According to Salehi, this rail route is a crucial infrastructure for boosting trade between Iran and China, positioning Iran as a secure gateway for China to access Europe. Morteza Jafari, another official with the Iranian Railways, disclosed plans for the train to operate twice a week in both directions during the initial phase, emphasizing its efficient overseas transportation.
Recent data from China's General Administration of Customs (GAC) indicate that Iran and China traded $5.89 billion of goods in the first five months of 2024. This trade route is expected to bolster these figures despite recent declines.
Experts highlight the importance of Iran enhancing its transit sector, leveraging its strategic geographical location to become a regional transit hub. The potential construction of the China-Kyrgyzstan-Uzbekistan (CKU) railway also presents further opportunities for Iran and Turkmenistan to strengthen their roles in East-West cargo transit.
Iran has been expanding its trade routes in recent years to counter Western sanctions, notably through the International North-South Transport Corridor (INSTC). The recent inauguration of the Rasht-Caspian railway and the planned Rasht-Astara railway with Russia are part of these efforts.
Iran's recent membership in BRICS (Brazil, Russia, India, China, and South Africa) further underscores its commitment to strengthening economic and strategic ties with major global economies. This membership is expected to enhance Iran's ability to participate in and benefit from global economic initiatives and infrastructure projects.
President-elect Masoud Pezeshkian has emphasized his administration's focus on fostering bilateral and multilateral partnerships with Russia and China, particularly within frameworks like BRICS, the Shanghai Cooperation Organization (SCO), and the Eurasian Economic Union (EEU).
The ongoing US sanctions on Iran and the trade wars with China have compelled China to seek alternative markets and trade partners. Strengthening ties with Iran helps China bypass some of the economic restrictions imposed by the US. China’s strategic economic and political maneuvers, such as enhancing the China-Iran rail corridor and strengthening ties with BRICS countries, are driven by the need to mitigate the challenges posed by its complex relationship with the US.
Benefits for Iran:
Trade Promotion: Enhances trade volume and efficiency between Iran and China.
Transit Hub: Positions Iran as a key transit route between West Asia and Europe.
Economic Boost: Provides a faster and more economical alternative to sea transportation.
Strategic Partnerships: Strengthens Iran’s geopolitical ties with China, Kazakhstan, and Turkmenistan.
Infrastructure Development: Promotes the development of crucial rail infrastructure.
Countering Sanctions: Expands trade routes to mitigate the impact of Western sanctions.
Regional Influence: Enhances Iran's influence in regional politics, logistics, and trade.
BRICS Membership: Enhances global economic engagement and access to larger markets through BRICS initiatives.
Benefits for China:
Market Access: Provides direct access to Iranian and European markets.
Logistics Efficiency: Offers a faster and cost-effective alternative to traditional sea routes.
Strategic Positioning: Strengthens China’s Belt and Road Initiative by enhancing connectivity.
Economic Growth: Boosts trade volumes and economic ties with Iran and the broader region.
Security: Ensures a secure and reliable trade route amidst geopolitical tensions.
Resource Access: Facilitates the import of essential resources from Iran.
Iran is a significant supplier of oil and gas. By securing energy resources from Iran, China can ensure a stable supply of essential resources, reducing its vulnerability to US-imposed disruptions.
The inauguration of the China-Iran-Europe rail corridor marks a new chapter in the bilateral relations between Iran and China, promising significant economic and strategic benefits for both nations and further strengthened by Iran's membership in BRICS.
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