Earlier this week, we participated in a panel on Chinese-Iranian relations at the Johns Hopkins School of Advanced International Studies (SAIS). The event, sponsored by SAIS’s Reischauer Center for East Asian Studies and the New America Foundation’s Iran Project and moderated by Kent Calder, launched a new monograph that we have written with our colleague, John Garver, an outstanding China expert at Georgia Tech’s Sam Nunn School of International Affairs. The monograph, published by the Reischauer Center in its Asia-Pacific Policy Papers series, is entitled Moving (Slightly) Closer to Iran: China’s Shifting Calculus For Managing Its Persian Gulf Dilemma. At the risk of appearing immodest, we believe that Moving (Slightly) Closer to Iran offers the best analysis currently available on the economic, political, and strategic dynamics shaping the evolving and critically important relationship between China and Iran.
A lot of attention is being focused on Chinese policy toward Iran, particularly regarding the Obama Administration’s threats to impose “crippling” international sanctions if diplomacy does not provide Washington with satisfaction (however defined) regarding the Islamic Republic’s nuclear program. The Administration’s reasoning about how the imposition of “crippling” sanctions on Tehran would come about runs roughly as follows:
• Because of President Obama’s efforts to “hit the reset button” with Russia, Moscow has come a long way toward the U.S. position regarding additional sanctions against Iran.
• China may not necessarily be happy at the prospect of new sanctions against one of its major energy suppliers, but, over the last three years, Beijing has let Moscow take the lead in opposing or watering down anti-Iran sanctions proposed by the United States and its European partners.
• Beijing does not want to be “on its own” in opposition to new sanctions, so, as long as Washington has Moscow on board, China will not block tougher international measures against Iran.
Unfortunately, the Obama Administration’s logic regarding the plausibility of imposing “crippling” sanctions against the Islamic Republic hardly stands up to serious scrutiny. First of all, we do not believe that Moscow is, in fact, on board for significantly tougher sanctions against Iran. (We will have more to say on this in future posts.) Secondly–and more to the point here–our monograph demonstrates that the Obama Administration’s logic chain misreads China’s strategic calculus about its relations with the Islamic Republic.
In broad terms, the development of China’s relations with Iran epitomizes the challenges that Beijing faces in managing what John Garver describes as China’s “Persian Gulf dilemma”. This “dilemma” requires China to balance a major interest in maintaining comity with the United States against its interests in building cooperative ties to important Gulf countries–including those, like the Islamic Republic, in policy conflict with Washington. In their efforts to balance these interests, China’s leaders have been careful not to let their country’s developing ties to the Islamic Republic be perceived in Washington as a direct challenge to America’s longstanding hegemonic position in the Gulf. But, at the same time, Beijing is moving ahead to cultivate an increasingly strategic energy relationship with Iran.
On the Iranian nuclear issue, more specifically, Beijing has given just enough to Washington to avoid a fundamental rupture while also supporting Tehran against U.S.-led international pressure. Thus, since 2006, China has endorsed three UN Security Council resolutions imposing sanctions on the Islamic Republic. In the process, Beijing has succeeded in keeping the nuclear issue in the Security Council–where, as a permanent member, China has significant influence and can, among other things, ensure that any prospective military action against Iran would have no interantional legitimacy. But Beijing has also worked (as has Moscow) to water down the sanctions actually actually imposed, thereby protecting China’s most important economic and strategic interests vis-à-vis Iran.
While China remains disinclined to challenge American hegemony in the Gulf directly, governmental and corporate decision-makers in Beijing are becoming more assertive in advancing China’s energy and economic interests in Iran–even as American concern over the nuclear problem intensifies. China is increasingly willing to stand on its own–that is, without necessarily having political cover from Russia–in opposition to specific measures proposed by the United States to raise international pressure on Tehran. In particular, Beijing has made clear that it will not endorse any measure that would seriously impede China’s access to Iranian hydrocarbon supplies or Chinese energy companies’ potential to pursue upstream positions in Iran.
Furthermore, China will continue developing its strategic energy ties to the Islamic Republic. Since 2007, China has not only continued to buy large amounts of Iranian oil–Chinese energy companies are now also developing substantial investment positions there. (Indeed, Iran is one of the few places in the Gulf where foreign firms can access upstream resources directly.) The willingness of Chinese energy companies to move beyond MOUs and other preliminary agreements to conclude actual investment deals in Iran indicates that governmental and corporate decision-makers in Beijing calculate that China can now “get away with more” in the Islamic Republic without provoking a serious U.S. backlash. Among other considerations, these decision-makers are increasingly (and justifiably) confident that Washington is not about to impose secondary sanctions on Chinese companies over investments in Iranian energy projects.
In this context, Dennis Ross’s idea to facilitate Chinese support for tougher sanctions against Tehran by having Saudi Arabia “replace” the oil that China currently imports from Iran is completely detached from the reality of the Islamic Republic’s growing importance for China’s energy security interests.
• China is not about to agree to such a significant reduction in the diversity of its oil supply sources in the Gulf. Likewise, Beijing will not abandon its interest in Iran as a potential suplier of natural gas to international markets–a role that Saudi Arabia will not be able to assume.
• Riyadh may let Chinese and other foreign companies explore for non-associated natural gas in Saudi Arabia (not for export, but for domestic use inside the Kingdom). However, Saudi Arabia is not about to let Chinese or other foreign companies into its upstream oil sector.
• Moreover, Chinese military officials are focused on the potential for Iranian hydrocarbons to come to China through pipelines running across Central Asia, rather than through seaborne routes vulnerable to American naval interdiction. Iran is the only Gulf country that can offer China such diversification of transit routes as well as supply sources.
Beyond the cricital issue of energy security, China also has important geopolitical interests at stake in its relationship with the Islamic Republic. While, as we noted above, Chinese leaders are not inclined to challenge American hegemony in the Middle East directly, Beijing does have an interest in deflecting overly assertive exercises of that hegemony. Chinese leaders simply do not believe arguments advanced from Washington that American leadership has contributed to peace and stability in the Gulf and the “greater Middle East”. From a Chinese perspective, China’s interest in the stable and uninterrupted flow of Persian Gulf oil has more often been hurt, not helped, by the exercise of American power.
In this context, Beijing has long seen Iran as a putative regional power–not only in the Persian Gulf, but also in Central Asia. Shared opposition to U.S. hegemony in both of these critical regions makes the Islamic Republic a potentially important ally for China.
Thus, China is not going to endorse anything coming close to Secretary of State Hillary Clinton’s frequently invoked threshold of “crippling” sanctions against Iran. If push comes to shove, China might at some point agree to a modest expansion of existing sanctions–but that is the most it will do. Unfortunately, by continuing to pursue the fatally flawed “dual track” approach to Iran that it inherited from the George W. Bush Administration, the Obama Administration has rooted its Iran policy in a delusion.
– Flynt Leverett and Hillary Mann Leverett