Iran and China have agreed on a new arrangement for crude oil payments under which Beijing will reimburse part of the money owed to Tehran in cash, a leading Iranian trader said on Monday.

China is the biggest buyer of Iran’s crude oil, purchasing more than 440,000 barrels each day, but Tehran imports goods instead of hard currency for its oil sales.

Asadollah Asgarowladi, chairman of Iran-China Chamber of Commerce, said the two countries have now agreed on making the payments partly in cash or transferring the money to a third country for imports.

“We wanted to transfer part of the money for our exports to other countries such as South Korea and Japan for imports or receive it in cash. Hence, consultations were made and an agreement was reached in this regard.

“Under the new agreement with Chinese authorities, it was decided that after a commission rebate, the balance of the money from oil and gas exports is returned to Iran,” Asgarowladi said.

Iran can sell around 1 million barrels per day of oil under a preliminary nuclear agreement but the country has to use a maze of routes to receive its money.

Asgarowladi however said there is no problem for payments of the oil money by the Chinese, without specifying the currency with which the two countries are trading.

China is also Iran’s biggest trade partner. Asgarowladi said annual transactions border around $52 billion, with Iran’s exports accounting for 55% of the trade.

Transactions, he said, will grow 20% every year under Iran’s vision plan irrespective of the results of nuclear talks which are currently at the final stretch.

“Trade relations between Iran and China are looked at from a long-term perspective and are not tied to the continuation or removal of sanctions.”

Asgarowladi, however, acknowledged that “minor differences” exist between the two countries over the quality of the Chinese goods.

Chinese goods have flooded the Iranian market in recent years, leaving many domestic production units in dire straits.

“We believe that the quality of Chinese goods exported to Iran must be improved and the ground be paved for an increase in investments by both countries in each other and by their joint companies,” Asgarowladi said.

He also said there are plans in the works for joint production in Iran which targets the regional market.

Source: Press TV