China-Iran Trade Report (January and February 2023)
Trade Falls As China Celebrates New Year
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for the first two months of the year show a typical seasonal contraction in China-Iran trade associated with the Chinese New Year holidays, which began on February 1. But while the seasonal decline in Chinese exports to Iran was in line with that seen in January and February 2022, Chinese imports from Iran remain below levels seen last year.
In January, bilateral trade totalled $1.26 billion, in line with the last two months of 2022. In February, the value of bilateral trade dropped by 34 percent to $842 million. The persistent absence of declared oil imports from Iran continued to drive the trade balance in China’s favour.
Chinese exports to Iran halved from $921 million in January to $489 million in February. The decline can mostly be attributed to a fall in Iran’s purchase of Chinese machinery (HS Chapter 84), electrical equipment (HS Chapter 85), and vehicles and transportation equipment (HS Chapter 87). Exports in these three categories totalled $307 million in February, $224 million less than in prior month.
China’s imports of Iranian goods saw less movement between January ($336 million) and February ($352 million) and showed a small improvement from December’s low point. In February, China imported $93 million worth of organic chemicals (HS Chapter 29) from Iran, more than double compared of January. Declared oil exports remain negligible.
In the first two months of 2023, China’s crude imports from the UAE and Malaysia dropped significantly after the record high levels recorded in December 2022. Such a contraction is consistent with the seasonal drop in demand due to the Chinese holidays. It does not suggest a change in China’s use of the UAE and Malaysia as intermediaries to import undeclared Iranian oil.
