After a historic lifting of Western sanctions from Iran, Tehran attracted a number of large investment projects from several major participants. While a Chinese-Iranian contract to build an oil terminal has attracted the most media attention, there are many other projects.

Writing in�the online Asia Times news site, freelance journalist Salman Rafi Sheikh states that, as�the US still hesitates to�unfreeze Iranian financial assets, effectively preventing European banks from�financing deals, Iran is likely to�turn toward�other opportunities.

According to�recent research, China is set to�become the world's leading energy consumer by�2030, and, as�such, is interested in�securing Iran's oil supply, something that Iran is yet to�begin production of, due to�lagging capacity.

Aside from�the expected oil purchases, Iran could also become China's geographical link to�the region. Iran borders both the Persian Gulf and Caspian sea which make it essential for�Chinese "New Silk Road" plan, known in China as "one belt, one road" program.
As Shiekh explains it, the New Silk Road plan requires that China win Iran's cooperation to�work out�a mutually-profitable strategy.


One possible solution, proposed by�Sheikh, is nuclear cooperation. Now that sanctions are lifted, Iran is seeking opportunities to�boost its nuclear energy sector.


According to�Iran's Atomic Energy Commission head, Ali Akbar Salehi, Tehran plans to�accept investment from�China�for the establishment of�two nuclear power plants. In addition, the two countries agreed to�cooperate on�the modernization and reconfiguration of�the Arak nuclear facility, along�with enhanced cooperation in�other areas of�nuclear research.


But China's participation is not a done deal, Sheikh notes, as�other competitors, most notably Russia, are looking into�nuclear cooperation with�Iran.


"Russia has already agreed to�build nuclear reactors in�Bushehr as�well as�aid Iran to�develop the Fordo enrichment plant to�produce isotopes that are not capable of�producing nuclear weapons," Sheikh writes.


It should be noted that Russia's Rosatom agency is a particularly strong competitor, as�it is capable of�designing, constructing and managing a country's entire nuclear power infrastructure.


Sheikh also notes that Russia's competition in�nuclear energy is not the only challenge for�China, pointing out�that Japan is interested in�oil from�Iran, and other Middle Eastern countries.


A geopolitical issue to�be overcome involves the participation of�Saudi Arabia, a country that has troubled relations with�Iran, but�is an interest for�China as�both a wealthy consumer market and a possible customer for�nuclear energy.


In his analysis, Sheikh suggests that China must use a restrained approach to�balance its interests in�Iran and Saudi Arabia, noting that there will be an inevitable "tilt" toward�Iran, as�Riyadh is historically pro-US, while Iran was China's trading partner, even during�sanctions.


Sheikh believes that increased trade with�China by�the two Middle Eastern countries could lead to�a degree of�normalization in�the relations between�them. Saudi Arabia, which seeks to�diversify its oil-based economy, will likely seek new cooperation opportunities, which could include participation in�the New Silk Road project.

By Sputnik