China’s Iran Headache

China’s foreign policy is at an inflexion point. The country is emerging as a major power, but that will require tough choices.

The toughest choices are usually found in the Middle East. The region doesn’t like major powers sitting on the fence, and it’s only time before China will be forced to climb down.

It is Iran that will likely force a decision. China has so far maintained its policy of non-intervention─as one Beijing-based policy advisor said to me, “if we intervene in Iran, it would set a bad precedent for our relations with other countries”.

Fair enough. But so would a failure to intervene. It would suggest that China isn’t concerned about its other regional partners, especially Saudi Arabia. Let’s not forget. Iran might supply 13% of China’s oil supply, but Saudi Arabia supplies an even larger 20%.

So what are the chances that China agrees to sanctions?

So far, it appears unlikely, at least to judge from media headlines. Yet, a recent article in Huanqiu, a hardline Chinese-language foreign affairs magazine, points to an increasingly nuanced positioned, and thus hints at the possibility of change.

The author, Yin Gang, works at the Chinese Academy for Social Sciences. His views aren’t official policy, but they are indicative of official thinking. The type of language he uses he is also refreshingly frank. So, I thought to highlight some of the more useful points.

First, the carrot.

“China understands Iran’s desire for nuclear deterrent capability. China’s nuclear deterrent capability was difficult to achieve under Western pressure. But times have changed. China and Iran are both signatories to the non-proliferation agreement. We should respect these principles”.

And, then the stick.

“China cannot ignore global opinion. It very well understands that its Arab and Jewish friends don’t want to see the Iranian nuclear problem end tragically”. He later continues, “Under no conditions will China accede to Iran’s demands, only to hurt the Arab and other countries feelings”.

How to explain the change? It appears to be Iran’s intransigence in the past year.

Yin writes that China, as a member of the United Nations Security Council, has previously voted in favor of modest sanctions in order to make Iran “wake up”. He voices his frustration, in particular, at Iran’s decision to secretly build a second uranium enrichment plant.

Here’s China’s fear─Iran’s failure to restrain itself, according to Yin, could result in “another arms race” in the Middle East.

It’s no wonder China is worried. Nearly 40% of its oil imports squeeze through the Strait of Hormuz. Worse yet, one of every two barrels of oil consumed in China originate from the global oil market. If oil prices spike, China’s factories and lorries might run dry of oil, putting workers out on the streets.

When trying to explain China’s behavior, it’s often useful to ask “where is the fear?” In this case, the fear owes to worries about oil supplies. Iran certainly can’t supply China alone, so China can’t ignore Saudi Arabia’s concerns entirely. Find the fear, and it’s easier to understand the possibility China agrees to sanctions.

I’m in Riyadh shortly, and will be canvassing views on the subject.