China-Iran Trade Report (April 2020)
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COVID-19 Hits Chinese Imports from Iran
New data released by the General Administration of Customs of the People’s Republic of China (GACC) demonstrates the impact of COVID-19 on Chinese imports of Iranian manufactured goods. Non-oil imports fell to USD 405 million in April, down from USD 551 million in March—26 percent decline.
Compared to March totals, import values in April fell 9 percent in HS Section 5 (includes crude oil), 2 percent in Section 6 (includes chemical products), 22 percent in HS Section 7 (includes plastics) and a significant 69 percent in HS Section 15 (which includes iron and steel). The fall in import values of manufactured goods in these sections is likely attributable to disruptions in Iran’s industrial output related to the COVID-19 outbreak (see the Iran PMI Report for more details).
Data for Chinese exports to Iran suggest that a rebound in Iranian industrial activity is forthcoming. Exports of goods in HS Section 16 (includes machinery and mechanical appliances) rose from USD 208 million in March to USD 330 million, a 58 percent increase that marks a highpoint for exports in this category in 2020.
Based on the declared value of China’s imports of Iranian oil, trade in crude oil (HS Chapter 27) is at the lowest level in two decades, reflecting the collapse in global oil prices. Declared imports showed a small rise in April to USD 121 million from USD 115 million in February. Yet, Iran continues to export oil to China via Malaysia. The 12 month rolling trend presented below reflects how the value of declared imports of Iranian oil presented in GACC data continues to underestimate the total economic value of Iranian oil exports to China.
The “hidden” value of China’s import of Iranian oil via Malaysia likely means that Iran is still running a small trade surplus in its bilateral trade with the People’s Republic, even though April customs data points to a trade deficit of USD 270 million, the highest such deficit over the last 12 months.
