When Iran and China signed their 25-year "Comprehensive Strategic Partnership" in March 2021, Iranian officials spoke of a transformative relationship that would break the back of Western sanctions. President Hassan Rouhani described it as the foundation of a new international order; state media called it "the deal of the century."

Five years on, the picture is more complicated than either the boosters or the sceptics predicted. China has indeed become Iran's economic lifeline — its largest oil customer, a major supplier of manufactured goods, and an increasingly important partner in telecommunications and infrastructure. But many of the specific investment projects promised in the agreement have not materialised, and Iranian officials have grown privately frustrated with what they see as Beijing's reluctance to commit fully as long as nuclear tensions with the West remain unresolved.

What Was Promised

The full text of the 25-year agreement has never been officially released by either government, but leaked sections and official statements described plans for up to $400 billion in Chinese investment in Iranian energy, transport, infrastructure, and technology over 25 years — in exchange for guaranteed access to Iranian oil at a discount, and Iranian support for Chinese positions on issues including Taiwan, the South China Sea, and Hong Kong.

Specific projects mentioned in official discussions included a high-speed rail link between Tehran and Mashhad, expansion of the Chabahar port complex, development of the South Pars gas field, upgrade of Iranian mobile networks to 5G using Huawei technology, and construction of a series of petrochemical plants.

What Has Been Delivered

Progress has been uneven, at best. Chinese oil purchases from Iran have grown substantially — accounting for the majority of Iran's exports as described elsewhere in this publication — but this reflects commercial self-interest rather than idealistic solidarity. Chinese buyers are getting Iranian crude at discounts of $15–25 per barrel below Brent; the arrangement benefits Beijing at least as much as Tehran.

On the infrastructure side, several joint committees have been formed, feasibility studies commissioned, and memoranda of understanding signed — but the number of projects that have moved from paper to ground has been modest. The Tehran-Mashhad high-speed rail project has seen little concrete progress. The Chabahar port development has proceeded slowly and at a smaller scale than promised.

Chinese telecommunications firms, including Huawei and ZTE, have expanded their presence in Iran's telecommunications market, and Iranian mobile networks are being upgraded with Chinese equipment. But the 5G rollout remains at an early stage, and interoperability with Chinese digital payment systems — which would potentially allow Iran to bypass dollar-denominated transactions — is years away from practical implementation.

"China is a strategic partner in the sense that we share an interest in resisting American hegemony. But China is also a very hard negotiator who looks after its own interests first. This is not a charity." — Senior Iranian official at the Ministry of Foreign Affairs, speaking on background

The Sanctions Constraint

The single biggest obstacle to Chinese investment in Iran has been the same factor that constrains everyone else: U.S. secondary sanctions. Large Chinese state-owned enterprises, which are the obvious vehicles for major infrastructure investment, have global business interests that would be threatened by OFAC designations. Even companies that are theoretically willing to absorb sanctions risk face practical difficulties in financing, insuring, and servicing projects in Iran.

The result has been a pattern where Chinese companies participate through smaller, less-scrutinised subsidiaries or through joint ventures structured to minimise their formal exposure — arrangements that are slower, more expensive, and less transformative than direct investment would be.

"China wants the oil. China wants the political alignment. China does not want to sacrifice its global business interests for Iran," said Negar Mortazavi, an Iranian journalist and analyst based in Washington. "That is the honest summary of the relationship."

Political Dimensions

Beyond economics, the partnership has had clearer political dimensions. Iran has consistently supported Chinese positions on Taiwan and other sensitive topics in multilateral forums. China has used its UN Security Council veto to block or weaken Western resolutions on Iran's nuclear program and human rights situation. Both sides have participated in joint naval exercises and security consultations.

Iran was formally admitted to the Shanghai Cooperation Organisation (SCO) in 2023, a milestone that Iranian officials celebrated as a sign of integration into the alternative international order Beijing and Moscow are attempting to construct. Membership has brought diplomatic visibility but limited practical economic benefit so far.

Iranian Public Opinion

Polls and social media sentiment suggest that the Iranian public is considerably more sceptical of the China partnership than official rhetoric implies. There is widespread resentment of Chinese goods that have flooded Iranian markets — often at the expense of domestic manufacturers — and anxiety about what some Iranians describe as "selling the country" to Beijing.

The opacity of the original agreement — never published in full — fuelled conspiracy theories about secret clauses giving China special territorial or resource rights, most of which appear to be unfounded but have proven impossible for officials to definitively refute without transparency they seem unwilling to provide.

Russia's Parallel Role

Russia has also deepened its relationship with Iran since 2022, driven by their shared status as heavily sanctioned states. Military cooperation has been particularly significant: Iran has supplied Russia with drones used in its war in Ukraine, in exchange for Russian military technology, including air defence systems and assistance with Iran's missile and aerospace programs.

The Russia relationship complicates the picture of Iran-China ties. Moscow and Beijing have different interests in how Iran's nuclear and regional situations evolve, and Tehran must navigate between its two most important partners without fully satisfying either.

The Next Five Years

Whether the China partnership delivers on its promise over the next two decades may depend less on bilateral will than on the outcome of Iran's nuclear negotiations and the broader trajectory of U.S.-China relations. A nuclear deal that lifted sanctions would create conditions for deeper Chinese investment — but might also reduce Iran's dependence on Beijing, giving Tehran more negotiating leverage in the relationship.

For now, Iran is strategically dependent on China in a way that is uncomfortable for many Iranians but that officials accept as the unavoidable consequence of their geopolitical choices. As one Tehran foreign policy analyst put it: "China is not our saviour. But right now, it is our only major option. We should be clear-eyed about that."