Iraq's Minister of Industry, Khaled Battal Najm, signed a contract with China's Shang Xin company to build a major industrial complex in Basra with investments exceeding $2bn, local media reported on March 22. 

China seeks to diversify its energy imports through Iraqi oil without becoming overly reliant on Baghdad, with Chinese firms now playing key roles across 50-67% of Iraq's oil sector. This economic leverage represents the foundation of Beijing's significant presence in Iraq, supported by solid diplomatic ties despite limited security involvement. Iraq has received significant contracts from Chinese companies on the back of several deals. 

In a press conference on March 22, Najm said another contract was signed with the Chinese firm to produce 1mn tonnes of sponge iron annually.

He said the contracts aim to develop Iraq's strategic industrial sector. The development aims to integrate sponge iron factories alongside aluminium and stainless steel plants. INA reported that the project is expected to cater to domestic markets and potential future exports. 

The minister said that negotiations for these projects took a long time due to their importance and scale. He added that the industrial city will serve multiple purposes. Ownership will remain with a public company linked to the ministry.

Najm added that the legal procedures related to the project faced complications. On March 21, Najm arrived in Basra to follow up on industrial projects. He laid the foundation stone for new factories and launched a steel factory furnace trial operation.

He also visited the iron pipe factory in Umm Qasr to monitor the implementation of the Basra-Haditha oil pipeline. Najm instructed workers to accelerate progress to ensure the project meets the required standards.

Earlier in March, Iraq’s Dhi Qar Governor Mortada Al-Ibrahimi announced signing a contract with Chinese company “CCTE” to build a 100-bed hospital in Suq Al-Shuyukh district, IntelliNews previously reported.

His media office said in a statement received by IntelliNews that Al-Ibrahimi attended the signing ceremony for the hospital construction contract under the 2024 investment budget in cooperation with CCTE and in the presence of regional and central government officials.

In June 2024, Iraqi Prime Minister Shia al-Sudani confirmed that Iraq and China would work to integrate Baghdad into China’s Belt and Road (BRI) project as part of Chinese companies' investment in the country.

In a significant move to expand its influence, it signed a deal with Iraq to build 1,000 schools. Construction of hundreds has started across the country in a move seen by the West with suspicion.

The school building development is part of Beijing's larger push for a more significant regional role across Iraq and other countries in the region.  That deal, which is part of an "oil for reconstruction" programme, involves funding the construction through the proceeds from Iraqi oil sales to China.