Posted by: mulrickillion | January 16, 2012

Beijing And Tehran’s Coming Divorce

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By Ilan Berman
Wall Street Journal
January 11,
2012

Is China finally coming around on Iran? For years, Beijing’s steady backing has helped the Iranian regime frustrate international efforts to isolate and penalize it for its nuclear ambitions. This month, however, there are heartening signs that China is reassessing its longstanding strategic partnership with the Islamic Republic.

China has begun to curtail its energy trade with Tehran, responding to new economic sanctions levied against Iran’s central bank by the Obama administration and the increasingly likely prospect of an embargo on Iranian oil by European countries. This month, China’s crude imports from Iran have fallen by some 285,000 barrels daily, more than half the total volume China regularly imports from Iran on a day-to-day basis. Chinese officials, moreover, have signaled that this reduction will continue into February and possibly beyond.

This one-two punch to Tehran’s economy and nuclear ambitions doubtless has the ayatollahs worried. Iran’s economic fortunes are intimately tied to China’s rise.

Over the past decade, fueled by massive and sustained economic growth, China has become a ravenous consumer of global energy. By the end of the next decade, according to industry estimates, China’s oil consumption could grow by as much as eight million barrels per day, making the Middle Kingdom the world’s largest petroleum consumer.

As an engine of Beijing’s stunning growth, energy-rich Iran is a natural strategic partner. Three years ago, Iran provided roughly 15% of China’s overall oil imports, making it China’s second largest oil supplier. Last year, similarly, the Islamic Republic supplied an estimated 12% of China’s foreign oil demand.

In exchange for oil, China has been a key enabler of Iran’s nuclear ambitions. Beijing turns a blind eye to national firms involved in nuclear commerce with Iran and works diplomatically to dilute international pressure levied by the United Nations and other multilateral institutions. The effects have been dramatic. Knowledgeable nonproliferation experts estimate that a crackdown on those national firms by the Chinese government would effectively cripple Tehran’s atomic endeavor, at least in the near term.

So far Beijing hasn’t undertaken anything resembling a crackdown on nuclear commerce. And Washington, worried about the state of the global economy and the health of U.S.-Chinese relations, hasn’t pressed the issue by systematically sanctioning offenders.

China’s recent energy moves, however, suggest that its traditional calculus in cooperating with Iran may be changing, and for good reason. Policy makers in Beijing have sensed for some time that their cozy ties to the Iranian regime have the potential to become a serious geopolitical liability.

China may grasp that the U.S. Congress, now exhibiting a growing appetite for strong economic pressure on Iran over its nuclear program, could soon sanction Tehran’s enablers, Chinese firms chief among them. Chinese officials can’t but notice that Iran’s nuclear quest—and the supporting role of countries like China—is fast becoming a major campaign issue for President Obama’s Republican challengers.

Perhaps weighing most heavily on Beijing’s mind is Iran’s recent bluster regarding the potential closure of the strategically vital Strait of Hormuz. This is likely to have spooked Chinese officials concerned above all with ensuring the steady flow of oil necessary to sustain their country’s economic dynamism.

Whatever the reason, China’s curtailment of energy ties with Iran is a welcome development and a major step forward for Western efforts to tighten the economic noose around the Islamic Republic. At long last, the Chinese leadership appears to be waking up to the fact that cooperation with Iran carries real risks.

Washington and European capitals must seize the moment to amplify that message and to support Beijing’s inevitable quest for different energy suppliers that can provide more stable alternatives to Iranian crude. After all, it is only by convincing China that its energy future does not lie with Iran’s ayatollahs that the international community can hope to make Beijing’s recent course correction permanent.

Mr. Berman is vice president of the American Foreign Policy Council in Washington, D.C.

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