After early signs it might try to exert pressure on Iran, China seems to be easing up. Unfortunately for the West, all roads lead through Beijing.
So much for Chinese cooperation on Iran, it would seem. Just a few months ago, the Chinese government seemed to be on track for a very public divorce from its third largest energy supplier. But now, China appears to be reverting to type.
In April, China’s imports of Iranian crude nearly doubled, surging some 48 percent to reach 1.6 metric tons. That spike effectively reverses the trend seen since this winter, in which China – leery of mounting Western economic pressure against Iran and attendant penalties on its energy clients – had begun to trim its energy commerce with the Islamic Republic. Nor does it seem to be an anomaly; experts predict that Iran’s oil exports to China will return to regular levels in coming months, striking a significant blow to U.S. and European efforts to isolate Iran in the process.
Crude purchases aren’t the only way Beijing is helping Tehran to weather Western sanctions. In recent weeks, as U.S. and European sanctions on Iran have begun to bite in earnest, China’s government has stepped into the void left by fleeing foreign partners. China’s shippers, for example, have capitalized on the lack of market competition to do a thriving business carrying Iranian oil. Chinese insurers, meanwhile, increasingly have supplanted skittish Western underwriters and guaranteed Iran’s foreign crude export shipments.
What accounts for Beijing’s backsliding? Economic considerations certainly play a role. Iran has long served as a key supplier of energy to China, and its output remains crucial to China’s economy. Despite some success in diversifying its energy sources over the past two years, Iran is still estimated to provide China with nearly 12 percent of its total annual foreign crude. That makes Iran roughly as significant for China, in energy terms, as Saudi Arabia is for the United States. It’s also why Chinese officials have been quick to declare that, notwithstanding a looming European ban on Iranian oil (now slated to take effect July 1) and U.S. threats of economic penalties, “the volume of our shipments will not drop.”
But politics are also bound to figure prominently in China’s calculus. China is a member of the “P5+1” group, and as such has watched firsthand the frenzied diplomatic efforts of the United States and its European allies for a negotiated settlement with Tehran over its nuclear ambitions. As of this writing, recent talks (first in Istanbul and most recently in Baghdad) have set up a protracted negotiating track that has, however temporarily, slowed Western efforts to apply economic pressure to Iran. In the process, it has provided the Iranian regime with much-needed breathing room to continue its nuclear effort.
Perhaps Chinese officials now believe that Iran’s leaders can indeed delay the West through diplomacy long enough to cross the nuclear Rubicon. Or perhaps Beijing is gambling that the Obama administration, concerned about the looming U.S. election, will be loath to deal with the economic implications of truly holding China to account for its partnership with Iran.
In and of itself, China’s break with Western sanctions is bad enough; but the signals from Beijing could end up becoming contagious. Western sanctions efforts have long struggled with the “free rider” effect, in which companies and countries involved in trade with Iran are reluctant to reduce commerce lest a competitor or alternate simply step in and take their place – and their profits. In just one example, Pakistan recently has sought to capitalize on the retraction of Iran’s traditional trading partners as a result of new Western sanctions by proffering new diplomatic outreach and energy cooperation to the Islamic Republic. Should China follow suit, the effect on the fragile consensus that now exists in Asia regarding disengagement from Iran could be nothing short of ruinous.
Which is why officials in Washington are now working hard to woo Beijing back into the fold. In early May, Secretary of State Hillary Clinton used the occasion of a high-profile speech in Beijing to urge China to join a “strong and united” international front against Iran. Clinton’s comments reflect an uncomfortable truth that lies at the core of current Western policy; in the effort to peacefully curb Iran’s nuclear ambitions, all roads lead through Beijing.
Ilan Berman is Vice President of the American Foreign Policy Council in Washington, DC.
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fisa
Iran should get its right like India and Israel got that nukes under US umbrella .iran has right to get all those things which full fills its defense demand , America is becoming goon and creating problems in every continent . it does not allow anyone to come in its way . bottom line is all fights is for oil and for world supremacy and to corner those who have guts to become a power . America has almost corner china from every where and created its fortified wall against china . from south it has India to attack china and in Afghanistan it has its bases and central states it has armed bases . japan and south Korea is its allies . now America is playing drama in south china sea. world can see Iran moving toward nuclear state easily no one can see Israel nukes . get a life you name sake peace makers .
PRB
Some day, we will understand that national sovereignty and United Nations are two different things. I don't for one minute like that Iran is an Islamic country. But I don't for one minute deny them their right to run their country as they see fit. I don't for one minute forgive the American CIA for destabilizing Iran's democratically-elected government in the 1950's and bringing the Shah to power, all in the name of protecting Brittish oil interests. If Iran is anti-US today, who is really responsible for that? I don't like that China is a communist country. But China has a right to be what it wants, and to do what it wants, as long as it does not infringe upon my soveriegnty, or the sovereignty of my country. As far as my country shoes imperialist tendencies, I am against it. If China is dealing in "Win-win" situations, who are the real winners? Does more oil for China means more bread for XiaoBao, the peasant who doesn't even own a single gas-powered device? Does it improve his air quality? Does it mean a better education, or more affordable health care, or even existent health care?
Truth is never what we see. "America invests in other country's infrastructure" is code for "America seeks to control other country" in a lot of cases. The question is, who is this "America". The answer is that elitists in our country, in league with the corporate government, dictate the "national interests" in a way that serves their own ends, and the general public be damned. But the general public must be persuaded to keep the elites in power, so we create spin with the elitist-owned media that allows the masses to feel warm and fuzzy about what is going on, instead of knowing the truth. The same can be said for China, or for any other country.
The UN is only a sycophant organization of world elites who want to feel special by telling sovereign nations what to do. In the end, none of their plans really help anyone, and they destroy countries. The US power brokers will do what they think is best for themselves, as will the Chinese power bloc. Iran can only do what is best for Iran. In the end, only the competence or lack thereof of the ruling elite will determine if what is best is really best. It makes sense to worry less about what other countries are up to and pay more attention to our own leaders and what they are up to.
Errol T
Remarkably pessimistic, but for the most part, I agree. Thinking that a nation's actions is for the common good can lead to disappointment. It's actually a case of the elitists thinking what is good for a nation, not a case of a people thinking what's good for a nation. Best the people can hope for is that its desire coincides with the goverment's desire a bit more often.
scdad07
"Just a few months ago, the Chinese government seemed to be on track for a very public divorce from its third largest energy supplier. " – That was covered in media numerous times 'few months ago' back from Dec. 2011 that pricing dispute had been the reason for oil cut back.
'SWIFT' was supposed to be a political independant organization and now is being hijacked.
":Which is why officials in Washington are now working hard to woo Beijing back into the fold" – What a funny way to show it by Panetta and Hillary.
I hope President Obama will convey to President Hu real sincerity of cooperation on world economy in the coming G20 meeting.
Sin Lok
"Chinese products are good value; consumers get more than they pay for, that is the deciding winning factor in the market place." Really good value can you make a list
HHop
What does this article have to do with Filipino or Vietnamese or Asian, davida? China will do what it thinks it best of it. US will do whatever it thinks is best for it. China is now enjoying cheap oil from Iran and that is the prize. The cost would be a noose being tightened around its neck. While being the second biggest economy sounds impressive, it is meaningless because the products China produces id low grade, cheap, immitation, and poison-laden. Wake up and see that China's economy is running out of steam already. What does China have to keep getting 8, 9, 10 % growth years over years? Actually I feel sorry for all of you Chinese for having a false sense of euphoria. You have been getting that kind of economic growth because the West enabled it for you, lifting your people out of poverty and with the hope of making some money along the way. But now, the whole world is seeing that Chinese is the one ungrateful nation and people. The whole world is doing everything they can to reverse what they did for China. Let us see how loud-mouth the Chinese can get when a few years your economy is in shamble. And then the world still won't forget that Chia is now taking advantage of the sacrifice the rest of the world is taking in hope of a safer world.
John Chan
@HHop,
You have serious misconceptions about reality of this world.
Chinese products are good value; consumers get more than they pay for, that is the deciding winning factor in the market place. In the capitalist free market, customers are king, as long as they buy, low grade, cheap, or imitation does not matter. No market share, no matter how you would like to brag about your products, you will be bankrupted, die off and nobody will shed a tear for you. Besides low grade and imitation is a universal phenomenon.
Poison-laden toys in the USA, Chinese only manufactured in according to the spec provided by the American. Poisoned and contaminated food is a universal problem, that’s why we have government agencies to keep a lid on the problem. To single out China alone is unfair.
China’s has been growing above 8% more than 30 years, this year China’s growth is expected to be 8% despite world economy doldrums. Cursing China due to jealousy, fear and resentment is not going to help your nation’s economy.
The world is a free market economy, capitalists are in the business for personal greedy gains, and they are not in the business of charity. They go to China because they can exploit Chinese easier and more. On the other hand, the current high living standard was built on by selling Opium to China at gunpoint, robbing China in the last 200 years and exploit Chinese blood and sweat in the last 40 years.
China always promotes win-win approach to the world. As your comment shows, the Westpac is selfish, narrow minded, greedy, insidious, irresponsible, ill faith, ungrateful, entitlement mentality, …
You are wrong about China is not helping the world economy; China is contributing the most thru IMF and other international institutions, because it is a win-win solution for China.
nirvana
According to John Chan, the reality of our world is:
- Bad quality should be the norm because nobody will buy products with better qualty/price ratio.
- Capitalism is the best system, better than "Socialism with Chinese characteristics".
- China economy is the highest form of Capitalism. "Man exploiting man" is PROTECTED there.
- Don't believe in China Constitution, its another "Made in China" product.
- Don't believe in Western propaganda, baby milk is not safe elsewhere too. So continue to poison your kids with "Made in China" milk.
Poor John Chan. When can you open your eyes?
jb001
One wonders who coordinates diplomacy in DC. We have become so arrogant and sloppy in our diplomacy, we believe that those we insult, disrespect and frustrate are so desperate, they'll just rool over and DO AS WE SAY:
- In Russia, we overtly tried to undermine Putin's victory in the last Presidential elections, we continue to antagonize him in his back yard…..then we seek his cooperation in the Security Council on Syria to further OUR interests, as though Russia should sweep its own interests under the rug. (By the way both the US, Russia, and Syria are responsible for the killins there).
- In China, we borrow their money, we bad mouth them everyday and everyway, we are desperately trying to thwart them, encircle them, and hope that they would assist us in our questionable adventures????
- In Pakistan, we KILL two dozen of their soldiers WITHOUT any form of apology, we shun and dispirect Zardari publicly at the G8 and we expect him to roll out the red carpet for our supply lines.
The blunders, chutzpah, and outright incompetence of our "diplomacy" department are monumental.
Matt
Actually you are the one whom is incompetent. You apparently take the tyrant's propaganda hook, line and sinker. Try looking at things from OUR perspective instead of the enemy's. The picture might suddenly make sense. Or just blather nonsense.
mishmael
@ Matt
Thats the American problem right there. For far too long has the American perspective been the only perspective in Washington, despite the "global" pretenses to "leadership."
Tell me, why should China cooperate with the Obama admin. on Iran sanctions when Obama is threatening to sanction China? Why for that matter should anyone renounce their right to buy and sell with Iranians just because Washington has a grudge against Iran?
Matt
I think it might be in China's interest to NOT have Islamic fundamentalists armed with nukes. But if you hate the US so much and don't want anyone to stand up to them…we don't care. We'll still act. And your just going to look stupid and weak.
John Chan
@Matt,
Is Iran an Islamic fundamentalist? Or is it because Iran won’t dance American’s tone? Or Iran violates American’s hegemony rule “American considers resistance as aggression,” hence Iran damages American’s creditability of willingness to use force to make everyone toe American’s line? Therefore Iran must be punished like Iraq or Libya.
Besides is it the right to religion freedom a cornerstone of democracy and human rights? Nobody hates the US, people just do not want the USA veers into the wrong direction and becomes a tyrant because there is no check and balance against its actions.
Democracy is about tolerance and accommodating the differences. Tell me what is the difference between the USA and any dictator? Dictator uses brutality to crash whoever he does not like, USA uses bombing and killing to crash whoever it does not like; Dictator uses media control to suppress different opinions, USA also uses media control to suppress different opinions.
All human being wants freedom, justice and equality, American model is not the only way to achieve these noble desires, and not using American model is not challenging USA.
nirvana
@Matt,
Actually, incompetence is not the right word.
Jboo1, advocated a different form of "diplomacy", one of dirty, under-the-table bargains, one which ignores principles (those written in the Constitution of his country), one which eventually would lead to the situation that one day he would not have freedom of peech to criticize his country. Kissinger and Zhou Enlai were the masters of such diplomacy.
Mike
So, US unilaterally impose sanction on a soverign country (who may or maynot be getting WMD, remeber Iraq?) AND THEN went ahead to gave waivers to S. Korea, Japan, India, Taiwan and others but not China. Am I the only one who see the absurdity of the situation? The net effect came down to a sanction on China. This is nothing more than good old back street bullying.
nirvana
@mike,
It was not the US alone. The (latest) sanctions were voted by the UNSC (12 for, 2 against and 1 abstention). China voted for.
We are the United Nations or we are doomed!
davida
where r those nationalistic viets and philipinos who have done nothing but beating war drums and upping rhetorics??? so why should china cooperate with washington on iran? usa has been undermining china in its own back yard at every turn and i bet my ass that there is nothing usa can do about that coz in the era of economic uncertainty and european financial meltdown, punishing china for its role in dealing with iran will only further exacerbate the world economic recovery and consumers' confidence. after all, china is the second biggest economy and has been engine of growth of the world for the last decade.
now, japan is starting to shake off the triple whammies from last year and chronic economic woes of last twenty years, and europe is totally in flames of credits meltdown and contagion, and usa fragile improvement needs to augmented by the boost of the rest- mostly brics countries, of which china would no doubt be lead ing the surge. so, who the hell is philipines and vietnams and significance of them on the world stage. so if usa in such bad shape would concede sth substantial in china's sphere of influence, what s the hope that they will do that when they have climbed out the obysse unscathed if not stronger.
china and their ccp lackeys are not stupid. clinton's empty words and gestures meant nothing to them. even obama's personal ass-licking reportoire would nt be sufficient either. only thing they want in exchange for playing the ball on iran nukes is SCS and Taiwan, and perhaps Diaoyu if us is willing throw that in the combo.
Mikhail
What does Vietnam and the Philippines have to do with it? Just read the article. Davida the reason why China may not follow is "In April, China’s imports of Iranian crude nearly doubled, surging some 48 percent to reach 1.6 metric tons", " Economic considerations certainly play a role. Iran has long served as a key supplier of energy to China, and its output remains crucial to China’s economy. Despite some success in diversifying its energy sources over the past two years, Iran is still estimated to provide China with nearly 12 percent of its total annual foreign crude. That makes Iran roughly as significant for China, in energy terms, as Saudi Arabia is for the United States."
Regarding your questions
"where r those nationalistic viets and philipinos who have done nothing but beating war drums and upping rhetorics?"
- Here we are, closely watching our coastlines for Chinese intrusions. We dont want war with China. Neverheard a Vietnamese or Filipino said that use of force maybe necessary while some Chinese officials have said so. The Philippines hasn't fired a single bullet to China over SCS. What about China? How many lives have been claimed in its adventure in SCS?
"so why should china cooperate with washington on iran?
- Not just Washington my friend but the UN- as a member of the UN (although we must also consider the impact of this to the Chinese if they will cooperate). The world doesn't revolve around China and USA there are other countries involved.
" who the hell is philipines and vietnams and significance of them on the world stage."
- Vietnam and the Philippines are just 2 small countries trying to prosper. Yeah maybe there's nothing much significance they contribute to the world so let's just take over some of their properties little by little (like you said WHO THE HELL are they anyway). Nevermind that they are also humans capable of someday improving. Do not underestimate what the Vietnamese and Filipinos can do. Not too long ago PRC was also being underestimated but look at them now, emerging to be a superpower – might even one day take over the USA. I salute all the Chinese for having been able to achieve this triumph and for sure more is coming for them because they are hard working but being on top doesn't give one the right to belittle those who are below him.
nirvana
Actually, this matter concerns also Vietnam and the Philippines,.. and each and every nation on this planet. Because it is about justice and security, justice for the Iranian people and non-proliferation for all.
If you can not get rid of the not-my-problem mentality, then don’t expect anybody to come to your rescue, when your house is burning. Don’t expect a multilateral world. Don’t expect rules of law. Expect to be used as dominos, to be treated as vassals, to be taught “lessons”, to have “dotted lines” near to your shores, and expect to be “slapped on the face” with a “what the hell are they?”.
We are the United Nations or we are doomed.