The Cheaper Alternative: As Private Western Investors Retreat from Iran, Chinese Companies Are Gaining a Secure Foothold

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Businessmen from Beijing or Shanghai are now a common sight in Tehran's more salubrious restaurants and hotel lobbies. A large delegation of businessmen was recently taken around the country, meeting officials, potential private sector partners and large government clients.

The central thrust of this invasion is a pair of enormous energy projects that have been under discussion for two years--the Yadavaran oil field and a liquefied natural gas (LNG) sales agreement. However, neither has advanced far beyond a vague memorandum of understanding, leaving the industry sceptical they will go ahead.

Other projects stand on more concrete ground. The most advanced large-scale projects are a $900 million aluminium smelter, for which a letter of credit could be opened in …