by Vahram Ayvazyan
China has become Iran's number one trading partner and the two countries have announced plans to more than double their annual bilateral activity to $100bn by 2016
The Iranian conundrum has entered a new phase. From July 1, the European Union banned the sale of protection and indemnity insurance for ships carrying Iranian oil. But will those sanctions dissuade Iran from developing its nuclear facilities? Will they isolate the country? Who can be Iran's allies? Who are the key decision-makers within Iran? Those are key questions for the western policy-makers.
History can provide us with a rare glimpse into the efficacy of sanctions on Iranian trade and the country's economy. After the discovery of Iran's secret uranium enrichment programme in 2002, western companies began to withdraw from Iran and western governments began to ramp up pressure on the Islamic Republic, opening up new opportunities for Chinese firms and diplomats to build economic and strategic ties to Tehran.
By 2007, China had become Iran's number one trading partner. China signed a $20bn agreement, in May 2011, to boost bilateral cooperation in Iran's industrial and mining sectors - and the leaders of the two countries have announced plans to more than double their annual bilateral trade, which is currently around $30–$40bn, to $100bn by 2016. Through its economic cooperation and deal-making with China, including a barter agreement designed to facilitate trade despite sanctions against banks doing business with Iran, the country has blunted the impact of the international sanctions regime on the country.
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