Vail Valley Voices: China pivotal with Iran
May 28, 2012
Perhaps the most controversial issue within the international community today is Iran’s nuclear program.
Its contentiousness exists for several reasons. The precise nature of Tehran’s nuclear activities is unknown. Its uranium enrichment element is the most antagonizing variable. The main purpose of uranium enrichment is for the production of nuclear weapons.
Tehran claims its nuclear program is for peaceful purposes, but still refuses to allow the U.N.’s International Atomic Energy Agency full access to requested sites and information that could affirm (or refute) Iran’s assertions.
The stalemate between both entities resulted in U.N. supported negotiations lasting since 2003. The United States, United Kingdom, France, Russia, and China have spearheaded the U.N.’s interactions with Iran. The United States and European Uniion additionally have applied economic sanctions against Tehran aimed at halting Iran’s nuclear activities.
A shadow now exists over the situation of an Israeli attack against Iran’s nuclear sites. Any strike by Tel Aviv might have severe strategic consequences.
The one nation that can influence Iran is China.
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China and Iran have a vast strategic relationship.
Beijing views Tehran as a chief energy supplier and commercial partner, while Iran sees China as a vital ally in the United Nations. There are indications that Beijing is starting to debate the merits of supporting Iran’s policies regarding the nuclear program. It may yet condone U.S.-EU sanctions aimed at pressuring Iran to viably explain its nuclear program.
China’s impact on the United Nations, United States, and European Union’s efforts against Iran’s nuclear program cannot be understated:
n Beijing’s support or opposition of U.N. sanctions against Tehran will prolong or expedite the crisis’ resolution.
n Washington and Brussels realize the effectiveness of any sanctions against Iran are mitigated without China’s support.
Beijing will probably support tighter U.N. sanctions against Iran’s nuclear program if:
n China can compensate for any losses incurred by Iranian economic or energy reprisals.
n Beijing believes Tehran’s belligerency is a threat to China’s access to the Middle East’s energy supplies.
Iran and China have an extensive energy and financial relationship. Beijing-Tehran economic ties totaled $29.3 billion in 2010. Energy affairs is one of the affiliation’s centerpieces.
For instance, China’s state owned oil company, Sinopac, is developing Iran’s Yadavaran field, an area containing an estimated 12 billion barrels of oil. And Tehran is Beijing’s third-largest oil exporter.
The strategic relationship covers additional areas. Iran provided China with various mineral resources, such as methanol and related solvents, totaling $1.5 billion last year. Beijing reciprocated by furnishing equipment needed for Tehran’s nuclear facilities, including boilers and air conditioners.
A strong possibility exists within Beijing’s White House equivalent — Zhongnanhai — that many Chinese policymakers understand the dangerousness of Iran’s ambiguity over its nuclear pursuits.
Beijing’s diplomats are probably worried Iran’s nuclear program may provoke a military attack from the United States or Israel. The ensuing instability might limit China’s access to the Middle East’s oil and natural gas supplies.
A vital question within Zhongnanhai is how to compel Iran to adjust its negotiating position without damaging its strategic relationship with Iran.
China supports Iran’s peaceful use of nuclear energy. It is wary of any activities leading to nuclear weapons.
Beijing could acquiesce to Washington and Brussels’ economic sanctions. Iran may retaliate by cancelling and-or suspending various commercial energy agreements crucial for China’s economic growth. It’s an insinuated threat an Iranian official issued several years ago.
China is pursuing a dual policy. Beijing is expanding its energy-supplier base. It is also abetting Iran’s efforts at circumventing Western sanctions.
China, Qatar and Saudi Arabia signed several energy arrangements after Chinese Premier Wen Jiabao visited the Persian Gulf in January. The Chinese-Qatari deals are a joint venture between the China National Petroleum Corporation, Qatar Petroleum International and Royal Dutch Shell to build a refinery at Taizhou. The Saudi deal entails the construction of a refinery capable of producing 400,000 barrels of oil on the Saudis’ Red Sea Coast.
China is simultaneously aiding Iran’s efforts at evading American and European financial sanctions designed to prevent Tehran from financing its nuclear program.
For instance, some of the sanctions prevent Iranian financial institutions from participating in the international market. China is allowing Iran to circumvent the measures by permitting Tehran’s institutions to deposit funds earned from oil sales into Chinese financial institutions to purchase goods and materials for other products. The situation allows Iran to continue financially functioning, albeit under tighter circumstances, while evading American and EU economic sanctions.
China is the key to prolonging or expediting a solution to Iran’s nuclear crisis. It has the leverage to change Tehran’s negotiating behavior.
Beijing must avoid antagonizing Iran from cancelling arrangements damaging to China’s economy. It must finally weigh those issues against U.S. and EU pressure to enforce existing economic sanctions.
It’s a strategic balancing act Zhongnanhai faces with consequences that impact the United States, Europe and the Middle East.
Matthew Kennedy has a master’s degree in diplomatic studies from the University of Westminster in London. He’s lived in Europe, Asia and Russia. Comments or questions can be directed to email@example.com.