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Sino-Iranian Economic Cooperation under Sanctions

The current stage of Sino-Iranian relations is characterized by a high level of economic cooperation. Its key elements are the spheres of energy and infrastructure construction, including that within the framework of China’s Belt and Road Initiative. It is noteworthy that cooperation has shown relevance and strong efforts to maintain ties through complicating cooperation mechanisms, despite the drop in trade based official figures under sanctions pressure. This article attempts to distinguish specific mechanisms of Sino-Iranian economic cooperation and trace their transformation under the sanctions. At the same time, the specific mechanisms of cooperation have differed depending on the level of sanctions pressure. Along with the last round of US policy tightening towards Iran in 2019-2020 Sino-Iranian cooperation has acquired a more cautious character, but has not been curtailed at all. First of all, the intermediaries’ network involved in trade accounts and supplies has become even more complicated. In addition, building new business relationships has focused around narrow-profile platforms and funds that organize relevant events. The article contains a detailed analysis of cooperation cases between companies and specialized institutions of China and Iran in various industries The experience gained by China in building mechanisms for cooperation with the sanctioned Iran can partly be applied in relations with Russia. Relations between China and Russia are entering a new phase and will be transforming. Relevant practices can be primarily used when developing mechanisms for foreign trade accounts, taking into account the effect of existing restrictions and the risks of secondary sanctions for Chinese companies.