Sino-Iranian relations have to a large extent been affected by events unfolding in the international arena, rather than been confined to a mere extension of domestic policy as many perceive foreign policy to be. The establishment of diplomatic relations between Beijing and Tehran, in August 1971, neatly fitted into the rapprochement between China and the United States, gaining momentum with time, and reaching a climax with the inauguration of formal ties between China and the United States, in 1978. The evidence to the argument is Hua Guofeng’s visit to Iran in the last months of the Shah’s regime. The status quo that China so ardently supported in Iran was ruptured by the collapse of the monarchy in February 1979, leading to a chill between the Islamic Republic and the Middle Kingdom. The lull was soon to be over with Iran coming under military invasion by Iraq in 1980. The former having been denied access to western markets in procuring its very much needed military hardware to defend itself in the face of the superior Iraqi military machine, sought and received assistance from China. The hard currency from military sales, oddly enough from both Iran and Iraq (with the former later to be the main beneficiary of arms transfer), enabled China to initialize its modernization drive under Deng Xiaoping. The end of the Iran-Iraq war, in 1988, diminished the military dimensions in the relations, as Iran had successfully embarked on renovating its military industry, and therefore, was not as dependent on China as before. Iran’s virtually ruined and cash-stripped economy became the venue for China to forge ties with it, especially in the lucrative oil sector. With the ever-widening Western sanctions, Tehran’s ties with Beijing became more entrenched, with China positioning itself as the number one trading partner of Iran, as evidenced by the volume of trade reaching $30 billion in 2009 and destined soon to hit $70 billion over the next few years. An example of the ever-growing economic-trade ties is a contract, valued at $100 billion, which provides for the import of ten million tons of liquefied natural gas over a 25-year period in exchange for a 50% Chinese stake in the development of the giant Yadavaran oil field in the Persian Gulf. Yet the seemingly stable relations have not been crisis-free and have experienced difficulties due to China flooding Iran markets with its low-cost products and causing bankruptcies in several Iranian key industries as shoes and textile. This has stirred discontent among the traditional business community in Iran. Added to that, are Beijing’s ties with the United States, its biggest trading partner and supplier of advanced technology, which cloud relations with Iran, as shown as lately as April 2010 by China’s decision to surrender to Washington’s demands to reduce by half its imports of crude oil from Iran. Irrespective of the above, Sino-Iranian relations will expand in the foreseeable future, given the continued absence of relations and even rapprochement between Tehran and Washington, and with the West being adamant in curtailing Iran’s influence in the Middle East and in particular in the strategic Persian Gulf region.