Essential Reading to Understand The Headlines

Monday, March 8, 2010

China Has Much to Lose in Iran Sanctions

Both Israel and the United States have worked tirelessly to get China on board with the Iran sanctions team in the United Nations. But up to now nothing has come out of it and in reality all of China's actions point to supporting Iran. China is probably the country which has much to lose (aside from Iran and Russia of course) in such a sanction. Evidences of increasing economic ties between China and the Iranian regime continue to flow amidst sanctions. In this report from, it shows that China will soon pumps oil directly from Iran!

In a deal worth $143 million between the Iranian North Drilling Company and China Petroleum Technology Development Corporation, the latter will be allowed to drill for oil in the Gulf, according to the official Iranian news agency Press TV.
Source: "Iran allows China to drill in the Gulf" By ADAM GONN

Just today, a report shows China reiterating its stand that diplomacy is the way to go against Iran even when the majority of countries in the UN are calling for tougher actions against Iran. Source: Global Times

Another forgotten and looming deal between China and Iran is the natural gas pipeline plan with Pakistan. It is a pipeline agreement which initially had India in the mix but America is convincing its ally not to participate in the deal. Iran has ran out of patience with India and are now looking to China as a worthy replacement. In fact China has been contemplating on this deal for the past two years!

Perhaps the most interesting aspect of Iran's most recent announcement is that China has yet to comment publicly on the pipeline except that it is studying the Pakistani proposal. That was early in 2008.
Source: "China hangs fire on Iran-Pakistan pipeline" By Stephen Blank

The pipeline deal is a big one which attracts not just China but other players including another Iranian ally... Russia. But with its additional interest in Pakistan, it seems China has the inside track. And if indeed China becomes a partner, Stephen Blank says that China will now be too dependent on Iranian gas and therefore will never support the UN sanctions.