Iran reportedly sidesteps trade sanctions with China's help

This from the FBI Newark's monthly National Security Threat Awareness Bulletin for October:

(U) Iranian officials say international sanctions haven't kept them from continuing to do business with much of the world. At the Tehran International Industry Fair in October, leaders boasted in a brochure that 25 countries were taking part. But on a visit to the fair, one country stood out: China. Trade specialists say that Beijing, which conducted nearly $22 billion in trade with Iran in 2009, can supply
versions of almost anything no longer imported from Western countries, and can easily circumvent or even ignore the banking complications faced by other nations attempting to do business with the Islamic Republic.
(U) China is building roads in Iran, helping Iranian companies copy Western-made machinery and is poised to take over for French, British and Japanese companies withdrawing from Iran's oil and gas fields.
"The Chinese are even manufacturing our prayer beads for remembering God in our daily prayers," said Ali Azhabi, an engineer for an oil platform in the Persian Gulf who attended the four-day trade fair, which concluded Oct. 9. Iranian officials point to business ties with other nations, including Russia and India, as
proof that tightened United Nations, Western and Asian sanctions on Iran are having no discernible effect on its economy. At the fair, business representatives from Turkey, Romania, India and Japan, as well as such Western countries as Germany, France, Italy and Sweden, worked the room, eagerly shaking hands
and swapping business cards, hoping any future transactions won't catch the eye of American regulators or trigger sanctions that bar trade benefiting Iran's military industry, nuclear program and other portions
of its energy sector.
(U) The UN Security Council has imposed sanctions on transactions bolstering Iran's nuclear program and military. The United States, European Union, Canada, Australia and Japan have also imposed restrictions on Iran's energy sector. But companies that sell products such as pharmaceuticals, foodstuffs or cosmetics are under no restrictions, although the United States seeks to dissuade all countries and
companies from any trade with Iran. Some Iranians at the fair said the foreign presence had been artificially bolstered by combining the 10th annual event with a heating, cooling and air-conditioning exhibition that had long been separate. The highest turnout by far was by Chinese companies, which made
up 81 of the 309 foreign firms present.
(U) Chinese support of Iran, a nation of 75 million people, is more than a political move. "China's development is still export-driven and Iran is a big market," said a professor at the Georgia Institute of
Technology in Atlanta. "Western sanctions are creating major opportunities for Chinese firms." Yang Fang, a Chinese industrial machinery salesman, estimated that the number of Chinese participants at the fair had increased 25% from last year. He stood in a giant hall that is considered premium trade-fair real estate; it had been painted red with stars to resemble the Chinese flag. Chinese companies sold everything from small household knickknacks to industrial tools. "We have no problem exporting to Iran," said Lucy Qiu, sales director for Luanlongxiao Arts & Crafts Co, which makes car seat cushions.