19th - 22nd Sep 2017

Shahre Aftab International Exhibition Center

For China's global ambition, 'Iran is at the center of everything'

NEYSHABUR, Iran — When Zuoru Lin, a Beijing entrepreneur, first heard about business opportunities in eastern Iran, he was skeptical. But then he bought a map and began to envision the region without any borders, as one enormous market.

“Many countries are close by, even Europe,” Mr. Lin, 49, said while driving his white BMW over the highway connecting Tehran to the eastern Iranian city of Mashhad recently. “Iran is at the center of everything.”

For millenniums, Iran has prospered as a trading hub linking East and West. Now, that role is set to expand in coming years as China unspools its “One Belt, One Road” project, which promises more than $1 trillion in infrastructure investment — bridges, rails, ports and energy — in over 60 countries across Europe, Asia and Africa. Iran, historically a crossroads, is strategically at the center of those plans.

Like pieces of a sprawling geopolitical puzzle, components of China’s infrastructure network are being put in place. In eastern Iran, Chinese workers are busily modernizing one of the country’s major rail routes, standardizing gauge sizes, improving the track bed and rebuilding bridges, with the ultimate goal of connecting Tehran to Turkmenistan and Afghanistan.

Like pieces of a sprawling geopolitical puzzle, components of China’s infrastructure network are being put in place. In eastern Iran, Chinese workers are busily modernizing one of the country’s major rail routes, standardizing gauge sizes, improving the track bed and rebuilding bridges, with the ultimate goal of connecting Tehran to Turkmenistan and Afghanistan.

Once dependent on Beijing during the years of international isolation imposed by the West for its nuclear program, Iran is now critical to China’s ability to realize its grandiose ambitions. Other routes to Western markets are longer and lead through Russia, potentially a competitor of China.

“It is not as if their project is canceled if we don’t participate,” said Asghar Fakhrieh-Kashan, the Iranian deputy minister of roads and urban development. “But if they want to save time and money, they will choose the shortest route.”

He added with a smile: “There are also political advantages to Iran, compared to Russia. They are highly interested in working with us.”

Others worry that with the large-scale Chinese investment and China’s growing presence in the Iranian economy, Tehran will become more dependent than ever on China, already its biggest trading partner.

China is also an important market for Iranian oil, and because of remaining unilateral American sanctions that intimidate global banks, it is the only source of the large amounts of capital Iran needs to finance critical infrastructure projects. But that, apparently, is a risk the leadership is prepared to take.

“China is dominating Iran,” said Mehdi Taghavi, an economics professor at Allameh Tabataba’i University in Tehran, adding that the “Iranian authorities do not see any drawbacks to being dependent on China. Together, we are moving ahead.”

It is not just roads and rail lines that Iran is getting from China. Iran is also becoming an increasingly popular destination for Chinese entrepreneurs like Mr. Lin. With a few words of Persian, as well as low-interest loans and tax breaks from the Chinese and Iranian governments, he has built a small empire since moving to Iran in 2002. His eight factories make a wide variety of goods that find markets in Iran and in neighboring countries.

“You can say that I was even more visionary than some of our politicians,” Mr. Lin said with a laugh. Since 2013, when the “One Belt, One Road” plan was started, he has had dozens of visitors from China and multiple meetings with the Chinese ambassador in Tehran. “I was a pioneer, and they want to hear my experiences,” he said.

Source: The New York Times/Thomas Erdbrink

Published: 07/05/17