Iran was once one of the most developed countries in Asia, only behind Japan, Israel and the Soviet Union. But they took development for granted. The revolution was all about ideology and religion. The Shah was disregarding traditional culture and religion. Sure, the economy wasn't perfect, but it was developing quickly. People didn't like the Shah's secret police and repression of political and religious enemies.
Iranian modern history is another lesson in not letting the mob rule the nation. Democracy kills development
Libya was also the most developed in Africa, immense benefits for citizens that not even Americans have today. But they were restricted by Europeans in many things that caused their downfall. That's what US/Europe had in store for Iran under the Shah (and for everyone else, in general) - "obey us and we'll give you benefits; fold when we tell you".
In Iran, the obeying part consisted of British Petroleum owning Iranian energy resources (oil & gas) - a reality extremely despised by the local population. Ayatollahs, after the revolution, immediately nationalized oil & gas and kicked BP out - a move that was highly praised by citizens. That's when sanctions started.
Religion has not much to do with it. Saudi Arabia is a much more extreme theocracy, and US/EU have no problem dealing with them (because KSA submitted).
Shah was also psycho and decadent. Highly unpopular, selfish elitist type. See below,
Adjusted for inflation: $150m - $750m.
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After the BVR "event" between India and Pakistan, I think many countries would be interested to buy J-10CE, it takes time, let's say within 5 years. So I don't think Iran would get it anytime soon. Also I have a doubt that China would sell it to Iran, security reason as so many mossad in Iran, also I don't think it is for the interest of China to upset the US and Israel for just Iran, Iran is not loyal to China even to Russia. Economic relationship between China and Israel is quite significant and growing
China did pledge that $400b investment into Iran, not Israel.
I don't see much issue in China providing J-10CE since it isn't China's most advanced aircraft. As for upsetting US/Israel, actually this is the perfect response because both those countries supply China's rivals with weapons (Israel to India, US to Japan, SK, Philippines, etc).