Transcript China Trader Award

Which way will China lean on Iran ?
Chatham House, November 11, 2010
Willem van Kemenade – [email protected]
Willem van Kemenade
Recent Publications (Selection):
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European and Chinese Engagement in the Iran Nuclear Dispute, in: China,
Europe and International Security: Interests, Roles, and Prospects,
Routledge, October 2010
Which way will China lean on Iran, YaleGlobal, September 2010
China vs. the Western Campaign for Iran Sanctions, The Washington
Quarterly, CSIS, July 2010
Iran's Relations with China and the West: Cooperation and Confrontation in
Asia, Clingendael 2009
Détente Between China and India: The Delicate Balance of Geopolitics in
Asia, Clingendael 2008.
China’s Post-Olympic Rise and its Place in the Global Concert of Nations,
Clingendael 2008.
The Fragile Pakistani State: Ally of the United States and China,
Clingendael 2008.
China and Japan: Partners or Permanent Rivals? Clingendael 2007.
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CHINA: Continental Power, Growing Global Influence,
Aspiring Two-Ocean Country;
IRAN: Neo-Imperial State, Aspiring Regional Leader
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Distances
Beijing-Tehran
5,608 km
Beijing-Urumqi
2,416 km
Beijing-London
8,147 km
Tehran-London
4,402 km
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China’s Position
on Sanctions
• China conditionally supported UN sanctions, but
condemned unilateral US and EU sanctions.
• The US warned China early August not to take
advantage of a SECOND Western walkout. …..
• Brazilian and Turkish efforts at mediation were
derailed by the US, indicating that it preferred
escalation and showdown.
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From Sanctions to
Serious Negotiations ?
• Iran has offered to restart negotiations
in mid November on all, but the nuclear issue,
unless the P 5+1 declare their views on the
Israeli Nuclear arsenal (Xinhua, 1-11-10).
• As an alternative venue to Vienna, FM Mottaki
suggested neighbour Turkey, to have an “ally”
on his side.
• Gen. Amos Yadlin, Head of Israel MI said last
week, Iran will soon have enough HEU for two
bombs. Israel has said so every year since 1990.
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China’s Strategic View
Global Times, August 13, 2010
• “The US is building its case against Iran by overstating
the threat Iran poses to regional peace and stability. The
US policy of antagonizing the existing government,
labeling it as ….. axis of evil, and threatening to use
force against Iran, is dragging the entire region into
dangerous uncertainty. ….. the US is not only casting the
shadow of war on the world, but also harming China’s
interest. China values a smooth Sino-US relationship,
but it does not wish to sacrifice its developing
relationship with Iran. China is against Iran acquiring
nuclear weapons; meanwhile, China has to secure its
strategic interests in Iran.”
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“Massive”, “Crippling” Sanctions ?
What Impact have they had ?
• Obama signed July 1 "CISADA” empowering POTUS to
sanction foreign companies active in Iran's energy sector.
• U.S. imposed large fines on ABN Amro, Lloyds Bank and
Credit Suisse for providing financial services to Iran in
violation of American law.
• Pull-outs or cessation of exports: Toyota Motor Corp. ;
S.Korean Kia, Lyondell/Basell, Shell, BP, Total, StatOil,
ENI, Inpex (Japan), Vitol, Trafigura and Glencore
• Iran has given up plans to export LNG due to inability to
import Western technology.
• People face petrol rationing and cuts in subsidies.
• Leon Panetta doubted whether sanctions would deter
Iran’s “ambitions with regard to nuclear capacity”.
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Trita Parsi, president of the
National Iranian American
Council.
“The US sanctions have deliberately
been crippling in all but name.
“The absence of a deliberate effort to
spare the ordinary population from
hardships can become problematic for
the US.”
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Is China “Double-Dealing”
or is Congress just
“itching” for a Fight ?
• Robert Einhorn, special adviser for nonproliferation and arms control, handed a
“significant list” of Chinese companies and
banks to Chinese counterparts, who are
violating UN sanctions. (WaPo, October 17)
• Recently, China's outgoing DCM Xie Feng, was
told that “if he ever wanted to see Congress
united, Democrats and Republicans, it would be
on the issue of China's interaction with Iran”.
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Will China further disengage from Iran ?
• For several months Chinese companies continued to
supply refined petroleum products to Iran and bid to build
refineries there.
• These were not on the list of UN sanctions but on the
unilateral US and EU lists. If Chinese companies ignore
the US/EU sanctions fully, they may jeopardize their
trade and investments in the US.
• China’s energy-bosses want to expand in Iran no matter
what, but academics say that China has to balance its
interests in Iran with those in the Arab world, Turkey,
Israel and the US. The government balks.
• China is in a state of indecision over Iran now.
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China Averse of all-out
Confrontation with US over Iran
• In the past, China has shown a
distinct unwillingness to publicly go
to the mat on Iran's behalf.
• When US-China relations were in protracted
crisis during Bill Clinton’s first term, Clinton and
Jiang Zemin made a grand bargain in 1997:
• US would de-emphasize human rights and make
some token concessions on Taiwan. China
would stop supplying Iran’s nuclear program
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Breakthrough in Chinese Investment in
Iran in 2009, not sustained in 2010
• After 3 rounds of futile UN sanctions, Sinopec showed its
willingness to make big investments in Iran by signing a $
2 b. deal to develop Yadavaran Oil Field.
• On April 14, 2009, CNPC signed a $ 1.7 b. deal for the
development of the North Azadegan field, bypassing US
sanctions. Japan out !
• CNPC and NIOC in June 2009 signed a $4.7 b. deal to
develop Phase 11 of the South Pars gas field. Total out !
• In November, Sinopec signed another MOU with NIO
Refining and Distribution Co. to invest an additional $6.5 b.
to build oil refineries in Iran.
• Iranian officials claim that China has invested $ 40 bn in
Iran’s energy sector, but Chinese specialists (CASS)
dismiss this as highly exaggerated.
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Major Oil and
Gas Fields in Iran
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Iran’s Nuclear Programme:
LEU but no HEU;
Weaponization … Perhaps ?
• Iran is a signatory of the NPT and has no nuclear
weapons (yet !). Israel, Pakistan and India have sizeable
nuclear arsenals but as “allies” of the US, they are
shielded from international criticism and scrutiny.
• Iran has the right to enrich uranium for peaceful
purposes as long as it is adequately inspected by the
IAEA. There have been suspect irregularities, but no
evidence has been produced that Iran is making the
bomb. No HEU production !
• The Bush adm dictated that no enrichment at all would
be tolerated in Iran and the EU-3 fell in line. Why ? Bush,
echoed by + EU 3 considered “denuclearization” an
instrument for “regime-change”.
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Does the US have credibility with the
Iranian People ?
• Not with the older generation that was moulded by the
Anglo-American intervention of 1953, the first “regimechange” and historical act of (white) “state-terrorism”.
• Not with the middle-aged either because they were
shaped by US support for Saddam’s savage war on Iran.
• The UN did nothing. That’s why most Iranians don’t trust
IAEA. The nuclear program is supported (almost)
unanimously as the best insurance against invasion.
• The US-sponsored cover of Israel’s extensive nuclear
arsenal is another phobia for Iran.
• The US played the “Israel-bomb-Iran” card with China.
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What is the Iranian
View of China ?
• The Iranian regime is dismayed about the priority that
China accords to its relations with the US.
• When Russia and China supported the 4th round of UN
sanctions, some senior Iranian leaders publicly scolded
Russia ….. but only lower level figures complained about
China in a muted way.
• The young Iranians I met despised China for “being
always on the side of this regime”.
• A senior ME specialist at CASS in Beijing told me
recently: “Iran always wants more from us, but they know
they cannot get more”.
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The East- and West-Asian Diplomatic Flux
• Recent crisis in the East- and South-China Seas
and US apparent willingness to re-engage
militarily in territorial disputes have recalibrated
China’s highly calculative diplomacy.
• China’s deepest worry is US re-engagement
with Vietnam.
• Think-tank strategists anticipate that China may
be willing to downgrade Iran for a second time in
exchange for limits on US engagements with
Vietnam.
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What is NATO’s “Raison d’Etre” ?
• NATO wants to build an alliance-wide missile
defense system. SG Rasmussen is unable to
specify where the missile threat might come from.
• The main threat is perceived to be Iran, which is
encircled from all sides by the US and Israel.
• Turkey opposes the missile system as aimed at
Tehran, so it is impolitic to mention Iran.
• Venerable WashPost Columnist David Broder
recently called for war with Iran as the best road
towards US economic recovery.
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Killing Iranians for US
Economic Recovery ?
• “Look back at FDR and the Great Depression. What
finally resolved that economic crisis? World War II.
• Here is where Obama is likely to prevail. With strong
Republican support in Congress for challenging Iran's
ambition to become a nuclear power, he can spend
much of 2011 and 2012 orchestrating a showdown with
the mullahs. This will help him politically because the
opposition party will be urging him on. And as tensions
rise and we accelerate preparations for war, the
economy will improve.”
–
David S. Broder, The War Recovery,
Washington Post, October 31, 2010.
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