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From Wikipedia:
China-Iran relations: 中国–波斯关系, Persian: [same as above]) refer to the historic diplomatic, cultural and economic relations between the cultures of China proper and Greater Iran, dating back to ancient times, since at least 200 B.C. The Parthians and Sassanid empires (occupying much of present Iran and Central Asia) had various contacts with the Han, Tang, Song, Yuan, Ming. For millennia the two ancient civilizations of Asia were further connected both economically and culturally via the Silk Road. The two were also briefly unified under the Mongol Empire.
Han-Parthian era
The Han dynasty explorer Zhang Qian, who visited the neighbouring states of Bactria and Sogdiana in 126 BCE, made the first known Chinese report on Parthia. In his accounts Parthia is named "Ānxī" (Chinese: 安息), a transliteration of "Arsacid", the name of the Parthian dynasty. Zhang Qian clearly identifies Parthia as an advanced urban civilization, whose development he equates to those of Dayuan (in Ferghana) and Daxia (in Bactria).
- "Anxi is situated several thousand li west of the region of the Great Yuezhi (in Transoxonia). The people are settled on the land, cultivating the fields and growing rice and wheat. They also make wine out of grapes. They have walled cities like the people of Dayuan (Ferghana), the region contains several hundred cities of various sizes. The coins of the country are made of silver and bear the face of the king. When the king dies, the currency is immediately changed and new coins issued with the face of his successor. The people keep records by writing on horizontal strips of leather. To the west lies Tiaozi (Mesopotamia) and to the north Yancai and Lixuan (Hyrcania)." (Shiji, 123, Zhang Qian quote, trans. Burton Watson).
Following Zhang Qian's embassy and report, the Han conquered Dayuan in the Han-Dayuan war and established the Protectorate of the Western Regions, thereby opening the Silk Road. Commercial relations between China, Central Asia, and Parthia flourished, as many Chinese missions were sent throughout the 1st century BCE:
"The largest of these embassies to foreign states numbered several hundred persons, while even the smaller parties included over 100 members… In the course of one year anywhere from five to six to over ten parties would be sent out." (Shiji, trans. Burton Watson).
The Parthians were apparently very intent on maintaining good relations with China and also sent their own embassies, starting around 110 BC: "When the Han envoy first visited the kingdom of Anxi (Parthia), the king of Anxi dispatched a party of 20,000 horsemen to meet them on the eastern border of the kingdom… When the Han envoys set out again to return to China, the king of Anxi dispatched envoys of his own to accompany them… The emperor was delighted at this." (Shiji, 123, trans. Burton Watson).
Parthians also played a role in the Silk Road transmission of Buddhism from Central Asia to China. An Shih Kao, a Parthian nobleman and Buddhist missionary, went to the Chinese capital Luoyang in 148 CE where he established temples and became the first man to translate Buddhist scriptures into Chinese. The Persianized kingdom of Kushan became the crossroads for Sino-Indian Buddhist transmissions, with many Iranians translating Sanskrit sutras into Chinese.[1]
Sassanian era
Like their predecessors the Parthians, the Sassanian Empire maintained active foreign relations with China, and ambassadors from Persia frequently travelled to China. Chinese documents record thirteen Sassanian embassies to China. Commercially, land and sea trade with China was important to both the Sassanian and Chinese Empires. Large numbers of Sassanian coins have been found in southern China, confirming maritime trade.[1]
On various occasions, Sassanian kings sent their most talented Persian musicians and dancers to the Chinese imperial court. Both empires benefited from trade along the Silk Road, and shared a common interest in preserving and protecting that trade. They cooperated in guarding the trade routes through central Asia, and both built outposts in border areas to keep caravans safe from nomadic tribes and bandits.
During the Liang dynasty in China, in 547 a Persian embassy paid tribute to the Liang, amber was recorded as originating from Persia by the Liang Shu (Book of Liang).[2]
There are records of several joint Sassanian and Chinese efforts against their common Hephtalite enemy. Following encroachments by the nomadic Turkic on states in Central Asia, an apparent collaboration between Chinese and Sassanian forces repelled the Turkic advances. Documents from Mount Mogh also note the presence of a Chinese general in the service of the king of Sogdiana at the time of the Arab incursion.
The last members of the Sassanian Empire's royal family fled to Tang China. Following the conquest of Iran by Muslim Arabs, Peroz III, the son of Yazdegerd III, escaped, along with a few Persian nobles and took refuge in the Chinese imperial court.[3] Both Peroz and his son Narsieh (Chinese neh-shie) were given high titles at the Tang court.[3] At least on two occasions, the last possibly in 670, Chinese troops were sent with Peroz to help him against the Arabs restore him to the Sassanian throne, with mixed results. One possibly ended up in a short rule of Peroz in Sistan (Sakestan) from which a little numismatic evidence remains. Narsieh later attained the position of commander of the Chinese imperial guards and his descendants lived in China as respected princes.[3]
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Iran and China have updated a 25-year deal signed first in 2016 that foresees $400 billion of Chinese investment in the resource-rich Middle Eastern nation, well-regarded energy industry publication the Petroleum Economist reports.
The update came during a visit at the end of August by Iranian Foreign Minister Mohammad Javad Zarif to Beijing where his Chinese counterpart State Councilor Wang Yi called the two countries as “comprehensive strategic partners”.
According to the Petroleum Economist, the deal represents “a potentially material shift to the global balance of the oil and gas sector” and could mark a "seismic shift in the global hydrocarbons sector” where no US dollars will be involved in commodity transaction payments.
Investment in oil, gas, petchems projects
“The central pillar of the new deal is that China will invest $280 billion, developing Iran's oil, gas and petrochemicals sectors,” said the monthly magazine which spoke to “a senior source closely connected to Iran's Petroleum Ministry” during Zarif’s visit.
This amount may be front-loaded into the first five-year period of the deal but the understanding is that further amounts will be available in every subsequent five-year period, subject to both parties' agreement, it said.
“There will be another $120 billion investment in upgrading Iran's transport and manufacturing infrastructure, which again can be front-loaded into the first five-year period and added to in each subsequent period should both parties agree,” it added.
The Petroleum Economist has been a respected energy industry publication for decades, better known for its sophisticated analysis.
Its report follows another story last month that China had “re-engaged” Iran on three key energy projects, namely Phase 11 of the supergiant South Pars gas field, West Karoun oil fields and the Jask oil export terminal.
State-owned China National Petroleum Corporation (CNPC), one of the country’s “big three” producers, holds an 80% stake in Phase 11 after French major Total’s withdrawal in August 2018 in response to US sanctions.
CNPC had since made little progress in developing the flagship project, but it has agreed to step up the pace on its development after getting a 30% discount to the global market price on potential condensate and LNG exports, the Petroleum Economist said.
China has also agreed to increase production from Iran's West Karoun oil fields—including North Azadegan, operated by CNPC, and Yadavaran, operated by fellow “big three” firm Sinopec—by an additional 500,000 barrels per day by the end of 2020.
According to the source cited by the magazine, Iran hopes to increase projected recovery rates from the fields from a current 5% of reserves in place to at least 25% by the end of 2021 at the very latest.
"For every percentage point increase, the recoverable reserves figure would increase by 670 million barrels, or around $34 billion in revenues even with oil at $50 per barrel," it quoted the source as saying.
Investment in manufacturing infrastructure
China’s close involvement in the build-out of Iran's manufacturing infrastructure will be entirely in line with its mammoth One Belt, One Road initiative, the Iranian source said.
The Asian giant intends to utilize the low cost labor available in Iran to build factories, designed and overseen by large Chinese manufacturing companies, with identical specifications and operations to those in China.
The idea is to ship Chinese products to Western markets by using Iran’s transport infrastructure.
Beijing’s biggest transportation project in Iran is worth $1.5 billion to electrify the rail line from Tehran to Mashhad for a length of 926 kilometers.
There are also plans to establish a Tehran-Qom-Isfahan high-speed train line and to extend this upgraded network up to the northwest through Tabriz.
The railway is part of the 2,300-kilometer New Silk Road that will link Urumqi in China’s resource-rich Xinjiang province to Tehran, connecting Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan along the way and extending to Europe via Turkey.
Tabriz, home to a number of key oil, gas and petrochemical and other industrial sites, and the starting point for the Tabriz-Ankara gas pipeline, will be a pivot point in the route.
Among benefits, Chinese companies will be given right of the first refusal to bid on any new, stalled or uncompleted oil and gas field developments, the report said.
Chinese firms will also have right of the first refusal on opportunities to become involved with any and all petrochemical projects in Iran, including the provision of technology, systems, process ingredients and personnel required to complete such projects.
Russia tangentially involved
The agreement includes a clause allowing at least one Russian company to have the option of being involved in the projects alongside Chinese operators, the report said.
Russia, tangentially included in the agreement, is weighing a similarly all-encompassing independent deal with Iran. In June, the two countries signed a dozen cooperation agreements covering energy, railway, agriculture, pharmaceuticals and tourism.
The agreements were signed as Russian Energy Minister Alexander Novak visited Iran with a delegation of 120 businesspeople, including representatives of private and public companies.
Facing off US
According to the Petroleum Economist, one key upside of the deals flows from the fact that both China and Russia hold seats on the UN Security Council, making it difficult for the US or any other adversary to further sanction Iran.
"In order to circumvent any further ramping up of sanctions—and over time encourage the US to come back to the negotiating table—Iran now has two out of five UNSC votes on its side,” it quoted the Iranian source as saying.
Beijing has pushed back against the United States, saying China's cooperation with Iran is legitimate under international law and should be "respected".
China imported more than 900,000 metric tons of crude oil from Iran in July, up more than 8 percent from the month before, data released last week by China's General Administration of Customs (GAC) showed.
The imports by the world’s largest oil buyer and more importantly the increase in shipments came despite Washington’s threat to punish companies after ending waivers to unilateral sanctions on Iranian oil on May 2.
Beijing has braced for any fallout from its participation in Iranian development projects and possible face-off with the US, the international energy website OilPrice.com said last month.
“If there is any further pushback from the US on any of these Chinese projects in Iran, then Beijing will invoke in full force the ‘nuclear option’ of selling all or a significant part of its $1.4 trillion holding of US Treasury bills, with a major chunk of the paper due to be sold in September on this basis,” it said.
