Iran looks warily to China for help Asia’s largest economy likely to be ‘major savior’ as sanctions tighten
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TEHRAN, Iran — It’s hard not to see China wherever you look in Iran.
From Chinese goods flooding markets to its businesspeople eager for deals as Western business interests flee, Iran likely will further embrace Beijing as an alternative market for its crude oil and financial transactions amid uncertainty over the nuclear deal.
That doesn’t mean China offers a haven to Iran without conditions. Beijing will try to extract the maximum benefit, analysts say, and there is growing concern that China may take advantage of Iran.
Iran “has had to rely on China to offset the Westerninduced isolation, predominantly championed by the United States,” said Arianne Tabatabai, an associate political scientist at the RAND Corp. who recently co-authored a book exploring Iran’s ties with China and Russia. “I think that what we’re going to see ... is the return of a quasi-monopoly of key sectors of the Iranian economy by the Chinese.”
Trade and ties between China and Iran date back over 2,000 years to the ancient Silk Road caravan routes that brought the textile to Europe. Modern relations began under thenruler Shah Mohammad Reza Pahlavi in 1971 after the Americans acknowledged Beijing’s Communist government. The 1979 Islamic Revolution that overthrew the shah caused ties to cool until the mid-1980s.
For China, Iran for years served as a crucial gas pump for its rapid economic growth. Up until 2012, Iran was China’s third-largest source of crude oil imports, according to the U.S. Energy Information Administration.
Then came sanctions over Iran’s nuclear program, sparked by the West’s fears that Tehran’s enrichment and stockpiling of uranium could allow it to build nuclear weapons. Iran has denied wanting atomic bombs.
The U.S., under President Barack Obama, and European nations pressured China and other Asian countries to cut back on their purchases of Iranian crude, leading to the 2015 nuclear deal. Under it, Iran agreed to limit its enrichment of uranium in exchange for Western sanctions being lifted.
Now with President Donald Trump’s decision to pull America from the accord, Iranians likely see China as one of the few avenues now open to them.
“China is a vast economy and has enough middlesized companies that don’t have a lot of exposure to the U.S. that Iran is going to be able to continue large quantities of trade there, assuming the Chinese government lets that happen and wants that to happen,” said Peter Harrell, a fellow at the Washington-based Center for a New American Security and a former U.S. diplomat who worked on Iranian sanctions issues with Beijing.
The Chinese have stressed they want the nuclear deal to continue and support any talks toward that end.
“China has been carrying out open, transparent and n o r ma l b u s i n e s s cooperation with Iran in the economic, trade and energy sectors. Such cooperation is reasonable, legitimate and lawful,” Chinese Foreign Ministry spokesman Lu Kang said in August. “It contravenes no U.N. Security Council resolutions or international obligations China has pledged into, undermines the interests of no one, and thus deserves to be respected and maintained.”
He added, in an apparent dig at the Trump administration: “China always believes that reckless imposition of sanctions or threatening to use them will not help solve the issues.” China already faces a billion-dollar tariff fight with Washington itself.
First among China’s wants likely is Iran’s energy supplies as other U.S. allies cut off their purchases by a November deadline. Nearly a quarter of all of Iran’s oil exports went to China in 2017, according to the Energy Information Administration, making it the Islamic Republic’s biggest single market. While oil imports from Iran have dropped going to comply with U.S. ar deal, but business will some 20 percent between sanctions — India for examcome first, Harrell said.
May and August, “China ple — when push comes to China remains both Iran’s will keep any reductions to shove, they can’t afford to top import and export mara minimal level,” the Eurrisk their relationship with ket.“One thing I’m sure asia Group said Wednesday. t h e Un i t e d S t a t e s ,”
After French oil giant Tabatabai said. China is doing with the
Total SA pulled out of a $5 But already, there are sanctions is leaning on Iran billion, 20-year agreement rumblings of concern to get oil price concessions,” to develop the Iran’s masamong the Iranian public. Harrell said. sive South Pars offshore At Tehran’s Grand The one thing China, the natural gas field, growing Bazaar, most acknowledge world’s top oil importer, rumors circulated that Chinese goods are subdoes not want to see happen
China would take over the standard to the ones sold by is any military action drivconcession. Western firms and rememing up the price of crude oil.
Meanwhile, India may ber how they flooded the When Iranian President face growing pressure to market when nuclear sancHassan Rouhani made pull out of Iran’s Chahbahar tions bit into the country in veiled threats about Iran’s port on the Gulf of Oman 2006. Fishermen along ability to close off the Strait after pledging $500 million Iran’s southern coast alof Hormuz, the Chinese to improve it, allowing ready complain about Chiimmediately reached out to
China to expand its own nese firms gaining access to the Iranian government to presence there. China altheir fishing grounds. express concern. ready has invested in PakiAnalysts expect Beijing “If Iran does something stan’s Gwadar port, some 50 also will ring major disstupid that sends global miles away. Both provide a counts from Tehran for buycrude oil prices from $73 to link to Afghanistan and ing whatever crude it other$100 a barrel, China is other landlocked central wise can’t sell after the actually the biggest loser by
Asian nations. November deadline. the move by far,” Harrell
“China is really going to China “will want to arsaid. “They have a very be the major savior of Iran ticulate the moral high strong interest in stability, because even though other ground” by mentioning the particularly in the Middle countries say they’re not U.S. backed out of the nucle- East.”