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International Relations China and the Iran Nuclear Question

Post Series: 2009: Volume 8, Number 3
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International Relations China and the Iran Nuclear QuestionChina is walking a tight-rope in handling the 2009 Iran nuclear crisis. On the one hand, Beijing’s overriding strategic interest is to ensure a favorable “macro-climate” for its highly successful post-1978 development drive by maintaining good relations with the United States. Beijing realizes China-U.S. relations could sour if Washington begins to view China as a peer competitor, and that confounding U.S. policies in the Middle East could easily lead American leaders to such a dangerous conclusion. China’s leaders also recognize the advantages accruing to China from a U.S. invitation to partnership on global issues. Viewed broadly, such a partnership might allow China’s power to continue to grow without collision with the reigning paramount power – rather like the U.S. did in relation to the British Empire circa 1900.

On the other hand, Beijing is loath to forgo opportunities to expand economic and political cooperation with Tehran. Iran is one of the world’s largest oil exporters, has large untapped reserves of oil and gas, and is a reliable supplier of energy for China. Moreover, China’s energy security policies attempt to encapsulate foreign energy supply relations in a warm, political insulation. Iran also has a large demand for infrastructure of all sorts: industrial and transportation machinery and equipment, cheap consumer goods – all of which China is happy to supply. Iran’s conflicts with the West have allowed China to establish itself as Iran’s leading trading partner. (Before Iran’s 1979 revolution, China supplied less than one percent of Iran’s imports.) Beijing also recognizes Iran as a major regional power with no conflicts of interest with China (unlike India, Japan, Russia, or Turkey). Beijing’s political objective is to expand China’s influence with Iran into an all-weather partnership similar to the one China enjoys with Pakistan. This objective would be undercut by China ganging up with the United States and Europe against Iran over the nuclear issue.

China balances between these conflicting but weighty sets of interests. In the International Atomic Energy Agency Board of Governors and U.N. Security Council debates over Iran’s nuclear programs, Beijing has endorsed efforts to negotiate a solution with both sides showing flexibility in order to reach an agreement that upholds the Nuclear Nonproliferation Treaty. This formulation implicitly criticizes both Washington and Tehran – Washington for trying to abridge Iran’s “right” as a signatory of the NPT to the “peaceful use of nuclear energy,” and Tehran for not adequately demonstrating to the “international community” that Iran is not attempting to make nuclear weapons. China is unlikely to thwart a new push by Washington, Paris, and London (Germany is unlikely to go along) to have the Security Council endorse a new and broader- “punishing” is the word used by U.S. representatives-set of sanctions. But China’s words suggest that at the end of the day, it will not permit the Security Council to endorse, or itself participate in, tough economic sanctions against Iran. Rather, Beijing is likely to water down any sanctions to allow China’s rapidly expanding economic relations with Iran to continue unimpeded growth.

Chinese analysts were deeply skeptical about the newly inaugurated (January 2009) Obama Administration’s policies toward Iran. Efforts by the Obama Administration to improve relations with Iran had some effect, according to an August article in China Daily by the director of Jiangsu’s Institute of International Relations. Yet despite a few moderate words and gestures by the Obama administration, Washington was likely to revert soon to a hard-line approach, which would fail, according to the article. “The long strained Iranian-U.S. ties have improved to some extent after Barack Obama assumed the office of the U.S. President,” the article noted. But once “the world’s largest economy bottoms out the Obama administration will [resume] its attack on Iran’s nuclear program once again, increasing the pressure on Tehran.” U.S. policies toward Iran continued to be “prejudiced.” “An improvement in U.S.-Iranian ties depends more on the length Washington is ready to go to engage Tehran in a dialogue.”1

Another China Daily article reviewing the demonstrations in Tehran protesting irregularities in the June 2009 Iranian presidential election was implicitly critical of U.S. “interference in Iranian internal affairs.” The “international community” should not “add fuel to an already burning issue” by interfering in Iran’s internal affairs, the article warned. An “attempt to push the so-called color revolution toward change will prove very dangerous” because “a destabilized Iran is in nobody’s interest if we want to maintain peace and stability in the Middle East and the world beyond.” President Obama had indicated, the article said, in his speech at Cairo University and in comments made while meeting South Korean President Lee Myung-bak, that the U.S. would not intervene in Iran’s current post-election turmoil. The crux of the issue, the article implied, was whether the United States would adhere to these promises.2

China’s opposition to efforts to accomplish regime change in Iran dovetails with China’s own interests – or actually, with the interests of the Chinese Communist Party that has ruled China since 1949. CCP leaders well understand that the United States and other Western democratic countries believe that values of individual freedom are universal and give unique legitimacy to institutions of liberal democracy. Marxist-Leninist, Communist values and political systems are fundamentally illegitimate, according to this Western perspective, and Western governments are often tempted to apply these ethnocentric prejudices (in the CCP’s view) to China. These Western prejudices, “Cold War mentality” in the CCP’s preferred nomenclature, were directed against China during 1989-1994, culminating in U.S. threats to withdraw China’s Most Favored Nation status (and thus severely restrict China’s exports to the U.S.) unless China implemented major improvements in China’s “human rights.”3 China’s tough stance defeated that earlier U.S. effort, but events in Tibet, Xinjiang, or elsewhere in China pose perennial opportunities for renewed U.S. and Western “interference in China’s internal affairs.” CCP rule of China will be safer and more secure if Western countries abandon universalistic ethnocentrism and accept the reality of diverse political systems around the world, according to the Chinese view.

Beijing has consistently opposed imposition of sanctions against Iran – over the nuclear issue or any other issue, for that matter. It eventually voted in the Security Council for sanctions resolutions: No. 1696 in July 2006, No. 1737 in December 2006, No. 1747 in March 2007, and No. 1835 in September 2008. The sanctions authorized under these resolutions were limited to 28 or so individuals and entities involved in Iran’s nuclear or ballistic missile activities. China, together with Russia and Germany, worked to ensure that those sanctions did not have much bite. Agreeing to vote for sanctions placated Washington, but watering them down ensured that Washington’s quarrels with Tehran would not too adversely affect Sino-Iranian ties.

As the Obama Administration began to lay the groundwork for tough Security Council-sponsored sanctions should the 1 October negotiations with Tehran fail, Beijing made clear it thought such sanctions were a bad idea. A Xinhua article written by an international observer made clear that sanctions were a Western idea. “Western countries led by the U.S. have asserted that the real intent of Iran’s nuclear program is to possess nuclear weapons,” and “the Western countries have applied pressure on Iran in all forms in an attempt to force Iran to stop its nuclear programs.” Iran had rejected all such pressure. Once again, in 2009, it was likely that “the United States and the EU” would press for a new round of sanctions against Iran. “However, because every country proceeds from its own interests, it will not be easy [to secure] the adoption by the U.N. Security Council of a resolution on imposing substantive sanctions on Iran.” 4

A Ministry of Foreign Affairs spokesman speaking on 24 September said that imposing sanctions and exerting pressure would not be “conducive to diplomatic efforts” to resolve the Iranian nuclear issue. “We hope that all relevant parties seize the current favorable period, step up diplomatic efforts and push forward the achievement of positive results,” the spokesman said.5 The proper paths were talks, dialogue, and negotiations, without a background of threatened force or sanctions.

As Western companies pulled back from Iran because of greater political risk in servicing that market, Chinese companies seized the opportunities to expand. In July 2009, the Iranian embassy in Beijing announced that China had become Iran’s number one trading partner.5 By seizing the opportunities created by Western problems with Iran, China pushed its way into a very large, lucrative, and growing market.

An embargo of gasoline was one “tough sanction” widely discussed in Western media. Perhaps in response, British Petroleum and Reliance of India stopped selling refined petroleum products to Iran in mid-2009. Total of France indicated a willingness to follow suit, should the Security Council so mandate. Chinese firms stepped in to meet Iran’s shortfall. Chinese officials denied that China sold gasoline to Iran, but foreign analysts concluded that between 30,000 and 40,000 barrels a day of Chinese refined petrol was reaching Iran via third parties. 6

Iran supplies large amounts of oil to China-typically ranking among the top three suppliers to China. China’s energy security strategy stresses involvement in upstream foreign oil production, and Western sanctions against involvement in Iranian oil-development projects make Chinese participation attractive to Tehran. Iran also produces lots of mineral ores that China needs: copper, sulphur, zinc, chromium, iron, lead, and aluminum. Iran also offers excellent opportunities for Chinese exporters of transportation, construction, mining, manufacturing, and power-generation equipment and machinery. Iran has ambitious development objectives and adequate financial resources to pursue those objectives. Chinese machinery is not as technologically sophisticated as Western or East Asian (Japanese or South Korean) varieties, but Chinese goods are typically substantially cheaper, and quite good enough for Iran. Iranian engineers and manufacturers might, ceteris paribus, prefer Western or Japanese goods. But low political risk associated with Chinese goods in contrast to the risk of interruption or interference associated with Western goods (along with low Chinese prices) often trumps those Western advantages. Iran is a very big market, and Western sanctions offer Chinese firms an opportunity to expand into that market.

Iran’s abrupt admission in late September 2009 of the existence of a second uranium enrichment facility inside a Revolutionary Guard military base at Qom will not significantly alter China’s calculus. Beijing will want to stay in step with Russia in dealing with the Iran nuclear issue. Russia’s calculations regarding Iran seem to have more to do with humbling the United States than do China’s, and it seems unlikely that Russia will go along with a U.S.-led Western effort to enforce strict sanctions against Iran. Should this assertion prove to be wrong and Russia decides to go along with Western sanctions against Iran, China would probably follow suit. Without its Russian partner China would be uncomfortably positioned as the sole, major opponent of U.S. policies. At the same time, however, Beijing would insert as many loopholes as possible into the Security Council-mandated sanctions regime, and would find occasion for words and actions supporting Iran in the face of what Chinese media would certainly style “U.S.-led Western sanctions.”

China’s balancing act in the Security Council reflects two important but contradictory sets of Chinese interests that Beijing must accommodate. Economic interests weigh heavily in China’s calculus, but strategic calculations are important too. China’s interests would not be injured if U.S. efforts to lock Iran into a militarily inferior position (i.e., without nuclear weapons) collapses. U.S. prestige would thereby be substantially diminished. China’s security against a possible hostile cutoff of China’s sea-borne oil imports (either by the United States or India) would also be enhanced by having a friendly, militarily powerful and confident Iran willing to work with China to counter such hostile moves. China’s leverage with Washington would also benefit from Washington finding itself in a long term political-military confrontation with Iran. The United States – and for that matter, Iran – would need China’s assistance on various matters, while the U.S. would be less inclined to focus on East Asian issues closer to China’s own vital interests. One Chinese analyst may have alluded to the primacy of such Chinese interests when he noted that, “Because every country proceeds from its own interests, it will not be easy for the United States to press for the adoption by the U.N. Security Council of a resolution on imposing substantive sanctions on Iran.”7

In the dominant view among China’s Middle East specialists, the root cause of the clash between Iran and the West has been the arrogant, bullying, and ethnocentric policies of Washington over the administrations of half-a-dozen presidents. It is American policies of sanctions, military strikes (during the “tanker war” of the 1980s) and threats, subversion, and no diplomatic relations that have, in Beijing’s view, created the current morass and possibly pushed Iran toward nuclear weapons to defend itself. The United States is now stewing in the mess it has itself made – in Beijing’s view. Why should China ignore its own interests by aligning with the United States against Iran? Even if Iran acquires nuclear weapons, China has no allies or military forces in the region that would be threatened by those weapons. Nor has China undertaken (unlike the United States) to guarantee the flow of oil through the Strait of Hormuz. China’s general, and genuine, interest in limiting the number of nuclear weapons states is balanced against these multiple and major strategic interests.

But China must pursue these strategic and economic interests without injuring an even more important interest in maintaining cordial relations with the United States. Since 1978 China’s drive for economic development has been underpinned by the imperative of maintaining friendly ties with the United States and, thus, a generally supportive American attitude toward China’s development. This imperative continues to operate. It has been paralleled since 1997 by a U.S. push for increased strategic partnership with China in managing the affairs of the post-Cold War world. This U.S. policy creates a very favorable environment for the growth of Chinese influence, and Chinese leaders recognize many advantages from accepting U.S. invitations for strategic partnership and cooperation. This means that Beijing will not block U.S. moves regarding Iran in the Security Council and will cooperate with Washington at least to the degree judged necessary to keep Washington from viewing Beijing as a rival or competitor – much less a hostile power. Exactly what that degree entails will be determined by the estimates of Beijing’s diplomats and analysts about the intensity of U.S. demands and the correlation of forces balanced behind and against Washington’s moves. Beijing will probably cooperate with Germany and Russia to water down further sanctions. But Beijing will be loath to take the lead in opposing U.S. policy thrusts.

  1. Liu Qiang , “Ahmadinejad has a real job on hand, ” China Daily, 13 August 2009, p. 9.
  2. “For Peace in Iran,” China Daily, main editorial, 18 June 2009. http://www.chinadaily.com.cn/opinions/2009-06/18/content_8296115.htm
  3. From mid 1993 to mid 1994 the Clinton Administration demanded that China fundamentally improve its “human rights” situation or face loss of Most Favored Nations status.
  4. Liu Gang, “CPRC: Xinhua Stresses Dialogue in Settling Regional Nuclear Issue,” Xinhua, 13 September 2005.
  5. Ariel Farrar-Wellman, “China-Iran Foreign Relations,” 26 July 2009. http://www.irantracker.ort/foreign-relations/china-iran-foreign-relations
  6. Spencer Swartz, “Big Oil Traders Cut Shipments to Tehran Amid Sanctions Talk,” Wall Street Journal, 24 September 2009, p. A4. Javier Blas, “Chinese companies supply Iran with petrol,” Financial Times, 23 September 2009, p. 1.
  7. Liu Gang, op cit.
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