A Quantitative Study of Trade Potential between China and Iran



Iran is an important node country of the Belt and Road Initiative and has close economic and trade ties with China. Domestic research on Sino-Iran economic and trade relations has mostly stayed in qualitative aspects such as trade characteristics, influencing factors, and future trends. However, on whether Sino-Iran trade has potential, how much potential it could reach and other issues, there is still a lack of quantitative accurate assessment and analysis. Based on the bilateral trade data of Sino-Iran from 2010 to 2016, this paper evaluates the potential of bilateral trade between China and Iran by establishing a model of trade gravity. The results show that oil price fluctuations and sanctions against Iran by major countries are important factors affecting the trade flows between China and Iran. The minimum value of the Sino-Iran trade potential index is 1.27, and the maximum value is 2.49. Therefore the Sino-Iran trade is a potential re-modeling type. The potential for commercial trade between the two countries is limited, and the development space for commodity trade needs to be further explored. China and Iran can seek new growth points in bilateral trade by establishing an emergency record for trade, enhancing trade mutual trust, increasing cultural exchanges and so on. This study could provide a scientific basis for our country to formulate policies to promote Sino-Iran economic and trade development in the future.


China, Iran, Trade Gravity Model, Trade Potential, Assessment.Text


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