ERBIL, Kurdistan Region - The trade volume between Iraq and China is set to increase this year, continuing an upward trend following the coronavirus pandemic with frequent bilateral delegations strengthening ties between Baghdad, Erbil, and Beijing, Iraq’s ambassador to China said on Tuesday. 

“The trade volume was over $50 billion between Iraq and China last year. This year, the indicators that we have in the past three months suggest the trade will greatly increase. I believe it will exceed $55 billion,” Iraqi Ambassador to Beijing Shoresh Khalid said in an interview with Rudaw’s Mahdi Faraj in Beijing. 

Khalid attributed the increase in trade to the easing of restrictions between the two countries, particularly obstacles related to the coronavirus, which have greatly increased the frequency of bilateral delegations between Baghdad, Erbil, and Beijing – measures that have greatly developed diplomatic relations. 

Direct flights between Baghdad and Guangzhou also contribute to a great trade volume. A planned Baghdad-Beijing direct flight line will also expedite trade. 

“Relations between Iraq and China are developing on a daily basis,” he said. “Of course, Covid had a very bad impact. As you know, China closed its borders to all political and economic activities for three years. This had an effect in that no bilateral visits were carried out.”

As a testament to the increased bilateral ties, China opened a consulate general in Iraq’s southern oil-rich city of Basra last year, followed by the opening of an Iraqi consulate in Guangzhou a year later. 

“The Chinese foreign minister is highly likely to visit Baghdad this year after being invited by Iraqi Foreign Minister Fuad Hussein. He has accepted the invitation. Maybe in the coming days, Foreign Minister Fuad Hussein will visit China,” Khalid said. 

The ambassador noted that issues facing Iraqi businessmen in China regarding transferring money have all been resolved, and that trade can be carried out using Chinese yuan, despite the original trade mechanism between Baghdad and Beijing still being done through US dollars. 

“There are no banking issues left. Everybody can trade in either dollars or yuan,” he said. 

China is also heavily invested in numerous sectors inside Iraq, with a school shortage in the country paving the way for an agreement with Beijing to build 1,000 new schools in Iraq by the end of 2024. That number is set to increase in the coming years. 

“Today if you look at Baghdad, there are a number of Chinese companies looking to beautify Baghdad by constructing roads, bridges, and tunnels in Baghdad as well as other cities,” the ambassador said. 

“Iraq also buys a lot of steel from China, and many household appliances too. Iraq also buys petrochemicals and other materials from China, as well as building materials such as tiles and wood,” he added. 

China is the biggest importer of Iraqi oil. 

In February, the Chinese foreign ministry spokesperson told Rudaw that Beijing is ready to strengthen trade and cooperation on all levels with Iraq and the Kurdistan Region.

“We will continue to make positive progress in the China-Iraq strategic partnership,” Wang Wenbin said. 

In recent years, China has stepped up its diplomatic efforts in the Middle East, as it increasingly becomes a key actor in regional affairs to promote an alternative to US influence. In March, Beijing brokered a deal between Saudi Arabia and Iran to end a seven year hiatus in diplomatic ties.