Will Iran Turn Into a Chinese Gas Station?

On March 27, the foreign ministers of Iran and China met in Tehran and announced a huge investment deal. China, they said, would invest $400 billion in Iran over the next 25 years.

In an article in National Review, I argued that these numbers are likely illusory. The total global foreign direct investment(FDI) in Iran in 2019 was $1.5 billion, and that fell in 2020 to about $1 billion. How likely is it China will invest $16 billion a year in Iran, a country that has never absorbed more than $5 billion in FDI in one year?

And were China to do this, it would essentially be buying up the whole country and giving the lie to the Islamic Republic’s claims that it seeks independence and self-determination. The ayatollahs would be turning Iran into a large gas station for China.

The deal is not insignificant, suggesting as it does that China will help Iran counter the impact of U.S. sanctions. But Iranians, and all of us, really do not know what was agreed (for example, how large a discount on oil Iran will sell to China?) and what in reality will happen.

The text of the National Review article is here.