China-Iran Trade Report (December 2020)
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A Year That Could Have Been Worse
New data released by the General Administration of Customs of the People’s Republic of China (GACC) shows a relatively strong end to 2020 for China-Iran trade. Exports rose to USD 657 million from USD 609 million in the previous month. Imports bounced back, rising from USD 498 million to USD 733 million in December, meaning that China ran a trade deficit with Iran for just the second month in 2020, with China’s imports exceeding its exports by USD 78 million. Iran will be encouraged by decreasing trend in China’s trade surplus, which had been spurred in part by the supply-chain shocks related to COVID-19 and the volatility in the Iranian currency in the first nine-months of the year.
China’s declared oil imports were USD 180 million, the second highest monthly total in 2020. Add to this a considerably increase in declared imports from Malaysia and it is clear that Iran is exporting more oil to China, a fact that suggests the actual trade deficit China is running is greater than what the customs data suggests. It is possible that the increase in oil purchases, both directly from Iran and via Malaysia, is a reaction to the election of Joe Biden.
Overall, China-Iran trade ends 2020 with a stable outlook. The unexpected shock of the pandemic has passed and it appears that the impact of secondary sanctions is no greater than in 2019. Bilateral trade should be expected to return to 2019 levels in the coming months, so long as Iran’s economic recovery continues.
