China deepening ties with Iran, providing drones to Tehran, per report to Congress

China has become Iran’s main economic booster, according to the report, purchasing about 90% of all Iranian oil exports last year.

By Mike Wagenheim, JNS

Amid the war in the Middle East, China has provided Iran with offensive drones, rocket fuel-related chemicals, and satellite navigation support in a “less restrained” approach to ties with the regime, according to a new fact sheet from the U.S.-China Economic and Security Review Commission, an independent body that advises Congress.

After U.S. strikes on the Islamic Republic began on Feb. 28, China “allowed two state-owned Iranian vessels in a Chinese port to be loaded with sodium perchlorate, which is used in solid rocket fuel for missiles,” per the March 16 fact sheet.

“China enables Iran to mitigate global sanctions through trade and financial networks, technology transfers, and dual-use trade,” per the report.

“Chinese banks, front companies, and intermediary firms facilitate oil transactions, the shadow fleet that transports Iranian oil, access to controlled technologies that support Iran’s missile and drone programs, and money laundering that enables it all.”

In exchange, “Iran supplies China with relatively low-cost oil and is a partner in China’s efforts to undermine the U.S.-led global order,” the fact sheet says.

China has become Iran’s main economic booster, according to the report, purchasing about 90% of all Iranian oil exports last year.

That translates to revenues of $31.2 billion last year, accounting for nearly half of the Iranian governmental budget.

Beijing has avoided formal defense cooperation agreements but is helping Iran join anti-West, pro-authoritarian international organizations and providing Iran with dual-use technology that can be applied to drones and missile production, according to the fact sheet.

The report cites anonymously sourced reports that “indicated China was engaged in direct arms sales to Iran,” including “offensive drones and a nearly finalized deal to sell anti-ship cruise missiles.”

Intelligence earlier this month suggested that Iranian ships picked up sodium perchlorate, a key ingredient for rocket fuel, at a Chinese port, according to the fact sheet.

That followed a Chinese shipment of nearly 1,000 tons of sodium perchlorate to Iran in early 2025, raising red flags about major support for Iran’s missile program.

Additionally, China has provided Iran use of its BeiDou satellite navigation system, which can assist in more accurate Iranian drone and missile strikes.

The U.S.-China Economic and Security Review Commission is a long-standing legislative branch commission created by Congress with a legislative mandate to monitor, investigate, and report on the national security implications of the bilateral trade and economic relationship between Washington and Beijing.