Oil and Gas for Asia: Geopolitical Implications of Asia's Rising Demand

China and Iran: Energyand/or Geopolitics

19 the national bureau of asian research nbr special report #41 | september 2012 ZHA DAOJIONG is Professor of International Political Economy in the School of International Studies at Peking University. He can be reached at . China and Iran: Energy and/or Geopolitics Zha Daojiong EXECUTIVE SUMMARY This essay offers a Chinese perspective on the role played by Iran in China’s energy security and contemplates ways for China and the U.S. to address the associated diplomatic challenges. MAIN ARGUMENT Iran is a factor that contributes to and risks deepening the “trust deficit” in diplomatic relations between China and the U.S. For China, access to Iranian energy resources is conditioned by an array of factors, including market-based concerns and considerations of domestic stability within China were Beijing to side with Washington in applying sanctions against Tehran. Beijing is not as forthcoming as Washington would like in dealing with Tehran, but Chinese involvement in multilateral diplomatic forums should not be overlooked. American observers are often tempted to view Chinese diplomacy toward Iran as part of an agenda to confront the U.S. and the wider West. The truth of the matter, however, is much more complex. China’s failure to heed U.S. demands to curtail oil imports and other economic ties to Iran can best be characterized as utilitarian and commensurate with the mutual anxieties that Beijing and Washington hold about each other. POLICY IMPLICATIONS China and the U.S. must be imaginative in preventing the Iran issue from undermining their bilateral relations. Rather than continuing to try to form a united front to rein in Tehran’s suspected nuclear weapon program, the two countries should consider alternative measures in the area of energy security: • The U.S. should appreciate that China offers little that is indispensable to Iran beyond Beijing’s veto power in the UN Security Council. • If the governments of China and the U.S. can work to enhance the political environment for Chinese and U.S. oil companies to operate jointly in a third country, doing so would help dissuade presumptions that U.S. and Chinese paths to energy security are intrinsically diametric. • When there is a greater level of bilateral interdependence between China and the U.S. in the energy commodities trade, the prospects for improving public perceptions in China about U.S. demands on issues like Iran should grow. 21 CHINA AND IRAN u ZHA I ran is a factor that contributes to and risks deepening the “trust deficit” in diplomatic relations between China and the United States. Access to Iran’s energy resources is the most divisive issue between each country’s expectations of acceptable as well as desirable behaviors toward each other. Yet there is room for both China and the United States to be imaginative in preventing the Iran issue from looming larger in their bilateral relations. Iran in Chinese Diplomacy Contemporary Sino-Iranian relations began on a tentative footing. For many of the formative years of the Cold War, Iran followed the path of the Western camp in dealing with the People’s Republic of China (PRC). On the bilateral front, until August 1971, Tehran maintained a formal and active diplomatic relationship with the Republic of China, or Taiwan. On the international front, Iran joined the West in the United Nations in condemning China over issues such as the Korean War and the 1962 war between China and India. In the eyes of Chinese analysts, it was the initiation of the Kissinger-Nixon rapprochement with China that prompted Iran to change its stance by sending a half-sister of King Pahlavi as an emissary to Beijing in April 1971.1 Four months later, Chinese and Iranian diplomats inked a joint communiqué to establish full diplomatic ties. For its part, China made a point of valuing its newly established ties with Iran by including Tehran on the itinerary of its foreign minister in June 1973, which included visits to London, Paris, and Islamabad as well. This was the first overseas trip by a Chinese foreign minister after 1966, when the outbreak of the Cultural Revolution kept an official in the position homebound. The political relationship between Beijing and Tehran, however, did not proceed smoothly. In August 1978, Chinese premier Hua Guofeng made a stopover visit to Tehran, in part due to the technical necessity of having to refuel his Boeing 707 en route back from his travels...