US-Iran Spat and China

US-Iran Spat and China

By: Safdar Ali

China is the largest buyer of Iranian oil, Iran’s largest trading partner, and arguably its most important positive political relationship. What do Trump’s statements mean for China’s relationship with Iran, and with the greater Middle East? And how would war—or peace — between the United States and Iran affect China’s interests?

The Trump Administration’s chaotic foreign policy presents a buffet of opportunities to Beijing. When the US disappoints well-established expectations or absents itself from international leadership, China can decide to step in opportunistically or to stay aloof. There are only a handful of issues, like North Korea, where China is inherently engaged. Even with its “all-weather friend,” Pakistan, China can generally stay out of thorny problems.

Iran is not part of China’s immediate neighbourhood, but China is inescapably part of the Iranian security challenge. Like a traditional great power, Chinese inaction on Iran will be as much a policy decision as action.

China was essential to striking a nuclear deal with Iran. First, they were a real (if occasionally reluctant) partner in building pressure on Tehran. Beijing voted for six UN Security Council resolutions targeting Iran between 2006 and 2010, and China’s oil imports from Iran fell by more than 20 percent in 2012-2013, when the US was mounting its strangulating sanctions campaign. As Iran’s largest oil customer, Chinese cooperation was essential to the effort. China was then critical to structuring the Joint Comprehensive Plan of Action (JCPOA)–the Iran Nuclear Deal. China is now almost certainly in a position to save a rump version of the JCPOA after the US withdrawal.

How? First, China would need to join Europe and Russia in demonstrating that for the first time since the Islamic Revolution, Washington, not Tehran, finds itself isolated. Second, China would need to sustain cooperation with Iran on civil nuclear projects. China has been cautious as Iran’s main partner in rebuilding the Arak heavy water reactor, not wanting to get ahead of the US, but now it would need to take political comfort from a more complex coalition. Continued negotiations over power reactors and cooperation on scientific or regulatory issues also matter. Any nuclear cooperation means risking US sanctions — and the complications they can create for China’s commercial nuclear ambitions — to allow Iran to continue to enjoy the benefits of the deal, and so has both political and technical meaning to Tehran.

Read More: US-Iran relations

The most difficult and most important challenge is for China to reverse its 2012-2013 position on oil purchases. Close US allies and economies deeply bound to the US are likely to reduce imports enough to push Iran into recession — and out of the deal — unless China increases imports to partially absorb sales lost to sanctions. That is possible, but it would force a clear standoff with the US with economic and political implications.

China will either decide to save the JCPOA or not, but it cannot duck the responsibility of the choice. How Beijing approaches this challenge will obviously be important to the international non-proliferation regime and to Middle East stability, but it will also be instructive for China-watchers to see how Beijing wrestles with a policy problem far from home when it is a part of, rather than apart from, the issue.

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