Which way will China lean on Iran ?Which way will China lean on Iran ?

Chatham House, November 11, 2010 Willem van Kemenade – kemenade@xs4all.nl

Willem van KemenadeRecent Publications (Selection):

• European and Chinese Engagement in the Iran Nuclear Dispute, in: China, Europe and International Security: Interests, Roles, and Prospects, Routledge, October 2010

• Which way will China lean on Iran, YaleGlobal, September 2010

• China vs. the Western Campaign for Iran Sanctions, The Washington Quarterly, CSIS, July 2010 

• Iran's Relations with China and the West: Cooperation and Confrontation in Asia, Clingendael 2009

• Détente Between China and India: The Delicate Balance of Geopolitics in Asia, Clingendael 2008.

• China’s Post-Olympic Rise and its Place in the Global Concert of Nations, Clingendael 2008.

• The Fragile Pakistani State: Ally of the United States and China, Clingendael 2008.

• China and Japan: Partners or Permanent Rivals? Clingendael 2007.

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CHINA: Continental Power, Growing Global Influence, CHINA: Continental Power, Growing Global Influence, Aspiring Two-Ocean Country; Aspiring Two-Ocean Country;

IRAN: Neo-Imperial State, Aspiring Regional Leader IRAN: Neo-Imperial State, Aspiring Regional Leader

Distances Beijing-Tehran 5,608 km Beijing-Urumqi 2,416 km Beijing-London 8,147 km

Tehran-London 4,402 km

China’s Position China’s Position on Sanctionson Sanctions

• China conditionally supported UN sanctions, but condemned unilateral US and EU sanctions.

• The US warned China early August not to take advantage of a SECOND Western walkout. …..

• Brazilian and Turkish efforts at mediation were derailed by the US, indicating that it preferred escalation and showdown.

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From Sanctions to From Sanctions to Serious Serious Negotiations ?Negotiations ?

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• Iran has offered to restart negotiations in mid November on all, but the nuclear issue, unless the P 5+1 declare their views on the Israeli Nuclear arsenal (Xinhua, 1-11-10).

• As an alternative venue to Vienna, FM Mottaki suggested neighbour Turkey, to have an “ally” on his side.

• Gen. Amos Yadlin, Head of Israel MI said last week, Iran will soon have enough HEU for two bombs. Israel has said so every year since 1990.

China’s Strategic ViewChina’s Strategic ViewGlobal Times, August 13, 2010Global Times, August 13, 2010

• “The US is building its case against Iran by overstating the threat Iran poses to regional peace and stability. The US policy of antagonizing the existing government, labeling it as ….. axis of evil, and threatening to use force against Iran, is dragging the entire region into dangerous uncertainty. ….. the US is not only casting the shadow of war on the world, but also harming China’s interest. China values a smooth Sino-US relationship, but it does not wish to sacrifice its developing relationship with Iran. China is against Iran acquiring nuclear weapons; meanwhile, China has to secure its strategic interests in Iran.”

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““Massive”, “Crippling” Sanctions ? Massive”, “Crippling” Sanctions ? WhatWhat Impact have they had ?Impact have they had ?

• Obama signed July 1 "CISADA” empowering POTUS to sanction foreign companies active in Iran's energy sector.

• U.S. imposed large fines on ABN Amro, Lloyds Bank and Credit Suisse for providing financial services to Iran in violation of American law.

• Pull-outs or cessation of exports: Toyota Motor Corp. ; S.Korean Kia, Lyondell/Basell, Shell, BP, Total, StatOil, ENI, Inpex (Japan), Vitol, Trafigura and Glencore

• Iran has given up plans to export LNG due to inability to import Western technology.

• People face petrol rationing and cuts in subsidies.• Leon Panetta doubted whether sanctions would deter

Iran’s “ambitions with regard to nuclear capacity”.

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“The US sanctions have deliberately been crippling in all but name. “The absence of a deliberate effort to spare the ordinary population from hardships can become problematic for the US.”

Trita Parsi, president of the Trita Parsi, president of the National Iranian American National Iranian American Council. Council.

Is China “Double-Dealing” Is China “Double-Dealing” or is Congress just or is Congress just

“itching” for a Fight ?“itching” for a Fight ?

• Robert Einhorn, special adviser for non-proliferation and arms control, handed a “significant list” of Chinese companies and banks to Chinese counterparts, who are violating UN sanctions. (WaPo, October 17)

• Recently, China's outgoing DCM Xie Feng, was told that “if he ever wanted to see Congress united, Democrats and Republicans, it would be on the issue of China's interaction with Iran”.

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Will China further disengage from Iran ?Will China further disengage from Iran ?

• For several months Chinese companies continued to supply refined petroleum products to Iran and bid to build refineries there.

• These were not on the list of UN sanctions but on the unilateral US and EU lists. If Chinese companies ignore the US/EU sanctions fully, they may jeopardize their trade and investments in the US.

• China’s energy-bosses want to expand in Iran no matter what, but academics say that China has to balance its interests in Iran with those in the Arab world, Turkey, Israel and the US. The government balks.

• China is in a state of indecision over Iran now. 04/11/23 10

China Averse of all-out China Averse of all-out Confrontation with US over Confrontation with US over Iran Iran

• In the past, China has shown a distinct unwillingness to publicly go to the mat on Iran's behalf.

• When US-China relations were in protracted crisis during Bill Clinton’s first term, Clinton and Jiang Zemin made a grand bargain in 1997:

• US would de-emphasize human rights and make some token concessions on Taiwan. China would stop supplying Iran’s nuclear program

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Breakthrough in Chinese Investment in Breakthrough in Chinese Investment in Iran in 2009, not sustained in 2010Iran in 2009, not sustained in 2010

• After 3 rounds of futile UN sanctions, Sinopec showed its willingness to make big investments in Iran by signing a $ 2 b. deal to develop Yadavaran Oil Field.

• On April 14, 2009, CNPC signed a $ 1.7 b. deal for the development of the North Azadegan field, bypassing US sanctions. Japan out !

• CNPC and NIOC in June 2009 signed a $4.7 b. deal to develop Phase 11 of the South Pars gas field. Total out !

• In November, Sinopec signed another MOU with NIO Refining and Distribution Co. to invest an additional $6.5 b. to build oil refineries in Iran.

• Iranian officials claim that China has invested $ 40 bn in Iran’s energy sector, but Chinese specialists (CASS) dismiss this as highly exaggerated.

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Major Oil and Major Oil and Gas Fields in IranGas Fields in Iran

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Iran’s Nuclear Programme: Iran’s Nuclear Programme: LEU but no HEU; LEU but no HEU; Weaponization … Perhaps ?Weaponization … Perhaps ?• Iran is a signatory of the NPT and has no nuclear

weapons (yet !). Israel, Pakistan and India have sizeable nuclear arsenals but as “allies” of the US, they are shielded from international criticism and scrutiny.

• Iran has the right to enrich uranium for peaceful purposes as long as it is adequately inspected by the IAEA. There have been suspect irregularities, but no evidence has been produced that Iran is making the bomb. No HEU production !

• The Bush adm dictated that no enrichment at all would be tolerated in Iran and the EU-3 fell in line. Why ? Bush, echoed by + EU 3 considered “denuclearization” an instrument for “regime-change”.

Does the US have credibility with the Does the US have credibility with the Iranian People ?Iranian People ?

• Not with the older generation that was moulded by the Anglo-American intervention of 1953, the first “regime-change” and historical act of (white) “state-terrorism”.

• Not with the middle-aged either because they were shaped by US support for Saddam’s savage war on Iran.

• The UN did nothing. That’s why most Iranians don’t trust IAEA. The nuclear program is supported (almost) unanimously as the best insurance against invasion.

• The US-sponsored cover of Israel’s extensive nuclear arsenal is another phobia for Iran.

• The US played the “Israel-bomb-Iran” card with China.

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What is the Iranian What is the Iranian View of China ?View of China ?

• The Iranian regime is dismayed about the priority that China accords to its relations with the US.

• When Russia and China supported the 4th round of UN sanctions, some senior Iranian leaders publicly scolded Russia ….. but only lower level figures complained about China in a muted way.

• The young Iranians I met despised China for “being always on the side of this regime”.

• A senior ME specialist at CASS in Beijing told me recently: “Iran always wants more from us, but they know they cannot get more”.

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The East- and West-Asian Diplomatic Flux The East- and West-Asian Diplomatic Flux

• Recent crisis in the East- and South-China Seas and US apparent willingness to re-engage militarily in territorial disputes have recalibrated China’s highly calculative diplomacy.

• China’s deepest worry is US re-engagement with Vietnam.

• Think-tank strategists anticipate that China may be willing to downgrade Iran for a second time in exchange for limits on US engagements with Vietnam.

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What is NATO’s “Raison d’Etre” ?What is NATO’s “Raison d’Etre” ?

• NATO wants to build an alliance-wide missile defense system. SG Rasmussen is unable to specify where the missile threat might come from.

• The main threat is perceived to be Iran, which is encircled from all sides by the US and Israel.

• Turkey opposes the missile system as aimed at Tehran, so it is impolitic to mention Iran.

• Venerable WashPost Columnist David Broder recently called for war with Iran as the best road towards US economic recovery.

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Killing Iranians for US Killing Iranians for US Economic Recovery ?Economic Recovery ?

• “Look back at FDR and the Great Depression. What finally resolved that economic crisis? World War II.

• Here is where Obama is likely to prevail. With strong Republican support in Congress for challenging Iran's ambition to become a nuclear power, he can spend much of 2011 and 2012 orchestrating a showdown with the mullahs. This will help him politically because the opposition party will be urging him on. And as tensions rise and we accelerate preparations for war, the economy will improve.”

– David S. Broder, The War Recovery, Washington Post, October 31, 2010.

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