Jan 14, 2012

Middle East Trip Suggests Change in Policy by China


By Michael Wines

BEIJING — Premier Wen Jiabao heads on Saturday to the oil-producing nations of Saudi ArabiaQatar and the United Arab Emirates, a six-day tour of Iran’s Persian Gulf neighbors that is the first Saudi trip by a Chinese premier in two decades, and the first ever to the other two states.

But some experts find the trip notable for a different reason: It comes asChina’s strategic alliance with Iran is less certain than before.

No one outside China’s leadership knows what Mr. Wen will discuss with leaders of the three oil-rich states he is visiting, but relations with Iran — deeply feared and resented by the Saudis, somewhat less so by the others — are certain to come up.

For decades, Iran has offered China a generous supply of oil and a foothold in an American-dominated Middle East. In return it received a lucrative trade relationship and a powerful defender in the United Nations and other diplomatic circles. The latest Iranian crisis puts that comfortable arrangement under new strains, some analysts say.

Foremost is the United States’ request that China slash its purchases of Iranian oil or, under legislation just signed by President Obama, potentially face the exclusion of many of its financial institutions from the American financial system. Although the White House has wide leeway in choosing targets for enforcement, the law is by far the toughest measure aimed at pressuring Iran over its nuclear program in recent times.

The willingness of the European Union and others to consider aggressively cutting oil purchases puts the Chinese in the awkward position of bucking most of the West’s largest economies — to preserve its ties to Iran. And the history of the last year — in which seemingly secure Arab allies like Col. Muammar el-Qaddafi of Libya, another important supplier of oil, were swept out of power — throws a new element of uncertainty into China’s commitment.

Chinese leaders who pored over the Soviet Union’s demise for clues to preserving their own hold on power are unlikely to ignore the lessons of the Arab Spring. The Chinese government may also be more cautious about the side it chooses, considering the embarrassment caused when the biggest state-owned arms company was found to have offered to sell weapons to Colonel Qaddafi to put down the uprising.

“Their political influence has gone down a lot in the last year. Libya, Yemen, Syria — those are all states which had either good or very good relations with China,” said François Godement, a senior fellow at the European Council on Foreign Relations in Paris. “In that mood, it’s quite possible that the Chinese would decide to hedge.”

Joseph S. Nye Jr., a Harvard professor who held security and intelligence posts in the Carter and Clinton administrations, said he agreed. “The more this Iranian crutch looks weak, or weakening, the less they’re going to stick with it.”

China already has reduced the oil it buys from Iran, a move that may be aimed at trying to negotiate more favorable financing terms, or perhaps to also satisfy American demands.

There are powerful counterarguments: Iran is China’s third-biggest source of oil imports, supplying more than 5 percent of total needs. Beijing would normally balk at crimping such an important oil source in a year when its economy already shows signs of slowing. China is also Iran’s largest oil purchaser and trading partner, and a vocal expatriate community there argues vigorously against policy changes, experts say.

Beijing normally would be especially reluctant to change a significant foreign-policy strategy this year, when a pending transfer of power from Mr. Wen and President Hu Jintao has all but frozen boat-rocking initiatives.

And its network of government research organizations —whose policy papers often reflect the analyses being given government leaders — often depict Iran as a rising power displacing a declining United States that is struggling to keep its grip on the Middle East’s oil. Their frequent conclusion is that time is on Iran’s, and thus on China’s, side.

Seemingly without equivocation, China’s official statements last week rejected joining an American sanctions regime and called for more talks over the scope of Iran’s nuclear program. Yet the Obama administration appears to believe it can get the Chinese to press Iran, both by cutting its oil purchases and by other means, before enforcement of the new sanctions legislation begins in June.

Whether that is right is in doubt. Many experts say China’s interest lies in straddling the divide between Tehran and Washington.

“To maintain positive relations with the United States is essential — indeed, a key for China’s macro long-term development drive. And that drive is essential to the regime’s survival and to social stability,” said John Garver, a expert on Chinese-Iranian issues at Georgia Tech’s Sam Nunn School of International Affairs.

“If it was a question of Chinese firms being excluded from American markets, of China becoming an issue in the American presidential election and a souring of American public opinion on China, then they would have to consider their options,” he said.

The slowing global economy could give China some leeway to accommodate American demands. Beijing’s thirst for oil is likely to slacken this year, leaving it some room to purchase less from Iran without openly endorsing efforts to ostracize Tehran.

In the end, however, foreign policy in China, as elsewhere, rests on a clear-eyed calculation of the government’s best interests. And that depends on Beijing’s judgment of the viability of the current Iranian government, several analysts said.

“I think the Chinese are extremely sensitive to getting caught in a situation they cannot get out of,” Mr. Godement said. “In Iran, the quantity of Chinese investment is huge. You handle that by being slow, and reluctant to move.

“But you don’t want to be the last to move.”

Courtesy: New York Times

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