Iran Tracker

Reaction to June 2009 Iranian Presidential Election:

In June, 2009, a spokesman for the Chinese foreign ministry, Qin Gang, stated that "China respects the choice of the Iranian people" and expressed hope that "Iran could maintain stability and solidarity" in the face of opposition street protests following the re-election of Iranian President Mahmoud Ahmadinejad. During a June, 2009, meeting of the Shanghai Cooperation Organization, an intergovernmental trade and security organization in which China is a member and Iran an observer state, Chinese President Hu Jintao reaffirmed his country's commitment to working with Iran, stating “We are quite confident that friendly and profound economic relations between the two countries should continue forever.”[1]

In January 2010, as political demonstrations against the Iranian regime grew more violent, an Iranian opposition news website reported that Iran has imported advanced armored anti-riot vehicles equipped with water cannons in a rush order from Dalian Eagle-Sky, a Chinese company.[2]

Nuclear:

China has shown support for Iran’s right to a peaceful nuclear technology, but has also supported some of the United Nations Security Council (UNSC) resolutions against Iran’s nuclear enrichment program.[3] Like Russia, China abstained from voting in the IAEA Board of Governors in 2005 and voted in favor of sending the issue to the UNSC in 2006.[4]  Also like Russia, China voted for United Nations Security Council Resolution (UNSCR) 1696, as well as all of the sanctions resolutions.[5] It also voted for UNSCR 1835 while expressing the desire that the resolution would not lead to more sanctions against Iran.[6] China has called for flexibility and patience in negotiating the issue. Foreign Ministry Spokesman Liu Jianchao said, “We believe that sanctions, especially unilateral sanctions, are of no help.”[7] The United States has also sanctioned some Chinese companies for selling dual-use chemicals to Iran that it could use in military development rather than the civilian purposes they are intended.[8] The U.S. and several European countries have accused China of circumventing sanctions against Iran by selling dual-use metals that Iran could use to manufacture advanced weaponry, including long-range nuclear missiles.[9] The U.S. accused China of selling tungsten copper to China (used in building weapons guidance systems) and the U.A.E. has intercepted shipments of aluminum and titanium sheets, which serve as raw materials for missile production, coming from China destined for Iran. In January 2009, a spokesman for the Chinese Foreign Ministry claimed that China has strictly adhered to UN limits on trade with Iran. Some analysts believe, however, that China may have subverted sanctions by selling Iran metals in forms not under sanction; for example, China could legally provide Iran with tungsten copper in powder form, but not in ingot form.[10]  At the September 2009 United Nations gathering, China and Russia agreed to support President Obama in putting the UN on record against the spread of nuclear weapons. Chinese Deputy Ambassador Liu Zhenmin said that the UN should only deal with general non-proliferation matters, however, and should not address specific cases.[11] The group statement will therefore not mention the individual cases of Iran or North Korea or any definite action against the spread of nuclear weapons.

In September 2009, the United Nations Security Council unanimously passed a resolution laying out military and diplomatic safeguards against the use of civilian nuclear programs for military purposes.  The resolution states that nations supplying nuclear material have the legal right to require the return of material if recipient countries withdraw from or do not comply with the nuclear Non-Proliferation Treaty.  The resolution also states that any country that halts IAEA inspections will be subject to UN Security Council safeguards.[12]  Despite China voting in favor of this resolution, Chinese Foreign Ministry spokeswoman Jiang Lee reiterated China’s position that sanctions are not the appropriate method to deal with Iran’s nuclear enrichment.[13]

China voted in favor of the November 2009 IAEA resolution that called for “full cooperation” of Iran to clarify its nuclear program.  In December 2009, China expressed hope that Iran would work with the IAEA to seek a “proper solution to the Iran nuclear issue.”  Chinese Foreign Ministry spokesman Qin Gang made remarks saying the China’s vote on the issue was emblematic of China’s position on the Iran nuclear issue and its desire for Iran to resolve the issue through dialogue and negotiation.[14]  Iranian Foreign Minister Manouchehr Mottaki sent a letter of protest to Chinese Foreign Minister Yang Jiechi saying, “undoubtedly, the illogical conduct of the countries voting against Iran will make the Islamic Republic of Iran more determined to continue the current path to develop peaceful nuclear technology.”[15]

In December 2009, an anonymous senior US official announced that a meeting by the P5+1 (including the US, Russia, China, Britain, France and Germany) on Iran’s nuclear program had been canceled due to China’s opposition, though the remaining five still planned to talk by conference call. [16] In late December, representatives from China, along with other P5+1 members, adjourned their telephone consultation about Iran’s nuclear program but did not announce when they will ask the UNSC to consider measure to increase pressure on Iran.[17] U.S. Ambassador to the UN Susan Rice said it was premature to discuss possible new sanctions, but the US, Britain, France, Russia, China and Germany were mulling “a range of alternatives.”[18]

In the early part of January 2010, Iranian Foreign Minister Manouchehr Mottaki warned the West that it had one month to accept Iran’s counterproposal to the October UN offer, after which time Iran would enrich its stockpile of low enriched uranium to 20 percent, though it is unclear if it has the technical ability to accomplish this task.[19] Although Mottaki did not say exactly the terms of Iran’s counter offer, in the past Iran has suggested a simultaneous uranium swap either on Iranian territory or in Turkey, though the West rejected this offer because it would not delay Iran’s ability to produce a weapon, should it choose to do so.[20] Mottaki’s comments were broadcast on state television and presented as an ultimatum to the West just two days after Iran missed a deadline set by the United States and its allies to accept the October UN deal.[21]

Later that month, head of the Taiwanese company Heli-Ocean Technology Co. Ltd., Steven Lin, announced that they had agreed a request from a Chinese-based firm to procure and send dual-use components to Iran, thus violating UN sanctions.[22]

During a UN meeting in January 2010 aimed at tackling Iran’s suspected nuclear arms program, Chinese Counselor to the UN Kang Yong blocked a new round of sanctions against the Islamic Republic. Yong said China was ready to agree to start talks on possible sanctions, but would not agree to any further measures at the time.[23] Western diplomats said after the meeting that China is now taking a harder line than Russia in opposing further UN sanctions on Tehran.[24] Robert Cooper, the EU official who chaired the meeting, said that Iran had failed to follow up on the key commitments that it made at its last meeting with the six powers in Geneva on October 1, 2009, in particular by refusing further meetings to discuss the nuclear issue. He said that the P5+1 was concerned about Iran’s construction of a secret uranium enrichment facility near Qom, its lack of co-operation with the International Atomic Energy Agency, and its failure to take up the UN agency’s offer to swap Iranian-enriched uranium for fuel for its Tehran Research Reactor. In response, Iranian Foreign Ministry Spokesman Ramin Mehmanparast said on Sunday that major powers will only achieve results in their meetings on Iran if they adopt a "realistic approach" and recognize its nuclear rights.[25]

[Click here for more information on China’s relationship with Iran’s nuclear program.]

Economic Relationship:

China and Iran enjoy an extensive economic relationship despite UN Security Council sanctions imposed on Iran with the aid of China’s vote. Iran and China cooperate in many sectors, including energy, construction, trade, and tourism. China currently helps Iran build dams, shipyards, ports, airports, mine-development, and oil and gas infrastructure.[26] With more than 100 Chinese state companies operating in Iran, Beijing wants to increase its presence in Iran’s market. According to the Iranian Chamber of Commerce, Industry and Mines, bilateral trade reached over $27 billion in 2008, a 35% growth over 2007. [27] Trade in the energy sector is especially robust with Iran exporting 408,000 barrels of oil a day in 2008, valued at $15.8 billion.[28] 

As Western countries have decreased their trade and investment in Iran due to sanctions, China and other Asian countries have stepped in to fill the void: according to semi-official Iranian Fars News Agency, China overtook Germany as Iran’s third largest trade partner in 2007.[29] In 2008, the China National Petroleum Corporation (CNPC) and the National Iranian Oil Company (NIOC) signed a $1.76 billion deal to develop Iran’s North Azadegan oil field, which could produce upwards of 75,000 barrels of oil per day by 2012.[30] Chinese officials have also expressed interest in expanding their industrial projects into southeastern Iran, particularly in titanium deposits and mining infrastructure.[31]  In March 2009, Iran and China signed a $3.2 billion gas deal, in which China’s LNG and a Chinese-led consortium will build a line to transport liquid Iranian gas from the South Pars Gas Field.[32]  Soon after, in May 2009, at a joint economic conference in Tehran, the two countries signed a number of agreements totaling $17 billion in economic cooperation. The agreements stated that China would assist Iran with its construction sector, host joint trade meetings, and develop Iran’s railway system.  Iran will also build a new trade center in China’s majority Muslim Xinjiang province.[33]

In May 2009, Chinese ministers participated in a large conference on foreign investment in Iran hosted in Tehran and, in June 2009, Chinese National Petroleum Corporation signed a $5 billion gas deal with Iran to develop Iran’s South Pars Gas field.[34] Highlighting the importance of bilateral economic ties, Charge D'affaires to Beijing Saeed Shabestari said in July 2009 that the increasing volume of trade between Beijing and Tehran had turned China into Iran’s major trade partner in Asia.[35] According to a report in the Chinese South Post Morning, Iran has called on China to invest in a series of economic projects worth $42.8 billion, including the construction of seven new oil refineries.[36] China agreed to several of Tehran’s investment requests in July 2009, offering to construct ten offshore jack-up drilling platforms, seven land drilling rigs, and two float cranes.  These projects will total $2.2 billion.[37] Energy cooperation increased further in August 2009 when China agreed to a $3 billion deal to expand Iran’s Abadan and Persian Gulf refineries. The projects are expected to take three years to complete.[38]  In September 2009, China increased its petroleum supply to Iran up to one-third of total Iranian petroleum imports.[39]  J.P. Morgan commodities research estimated that China sends between 30,000 to 40,000 barrels per day to Iran through third party intermediaries.  Chinese Sinopec and CNPC have also signed $4 billion deals with Tehran to pump more oil out of Iranian oil fields, further increasing energy cooperation between the two countries.[40]  In November 2009, Sinopec signed a tentative deal to provide $6.5 billion in financing for oil refinery projects in Iran.[41]

Amir Talebi, Caretaker of Asia and Oceania Trade Office of Iran's Trade Promotion Organization, has announced that the volume of Iran's exports to China has witnessed a 40% increase during the last 9 months. The total volume of Iran's exports to China stood at $2.1 billion in the 9 months of this Iranian year and “propane, iron ore, polyethylene, aluminum, copper, marble, chrome ore, cast iron, lead, concentrated licorice, and sulfur were the main items exported to China,” he noted[42]. Dozens of Chinese firms operate in Iran, largely helping with infrastructure projects. Despite the sanctions already in place, two-way trade between China and Iran grew 35 percent last year, to stand at $27 billion. Moreover, China has also signed an estimated $120 billion worth of oil deals with Iran over the past five years[43]. 

[Click here for more information about China’s business activity with Iran.]

Diplomatic/Military Relationship:

China and Iran have been building a political relationship based on economic and regional cooperation.  In May 2009, the two countries held a joint trade conference in Tehran at which Chinese Vice Minister of Commerce Chen Jian expressed his country’s willingness to increase non-energy trade as well as improve bilateral interaction and communication.[44]  The conference was attended by over 500 Iranian and Chinese officials and businessmen, including the Iranian Foreign Minister Manouchehr Mottaki and Chinese Minister of Commerce Jian.[45] Iran joined the Shanghai Cooperation Organization (SCO) as an observer in 2005 and submitted a request in March 2008 to join as a permanent member.[46], [47] In addition to its cooperation with China in the multilateral forum of the SCO, Iran has also supported Beijing’s one-China policy – which rejects the possibility for a separate or independent Taiwan – and applauded China’s recent anti-secession law, which explicitly stated China’s rejection of an independent Taiwan.[48] In June 2009, the leaders of China and Iran met in Russia during a meeting of the SCO. Chinese President Hu Jintao stated that "Tehran and Beijing should help each other to manage global developments in favor of their nations otherwise the same people who are the factors of current international problems will again rule the world."[49] 

Following July 2009 ethnic riots in China’s Muslim populated Xinjiang province, in which more than 156 people were killed and over 1000 arrested, Iranian Foreign Minister Manouchehr Mottaki expressed support for "the rights of Chinese Muslims." On July 9, 2009, Chinese President Hu Jintao announced that those responsible for the unrest will be "severely punish[ed]."[50] In a July 22 statement, the charge d’affaires of the Chinese Embassy in Tehran, Chen Weiqing, insisted that the June riots in Xinjiang were encouraged by foreign separatist groups and were unconnected to religious or ethnic issues.[51] During his weekly press conference on July 27, 2009, Iranian Foreign Ministry Spokesman Hassan Qashqavi balanced concerns for Muslims with bilateral relations with China. Qashqavi stated that "we hope Muslims' rights would be considered as well as rights of other ethnic groups," however condemned international interference in China’s internal affairs.[52]

In August 2009, foreign ministry officials from both China and Iran met to review the July ethnic riots, with the Iranian side calling on China to aid in conducting religious services for the country’s Muslim population.[53]

Relations with Iran posed a major point of contention between China and the United States during an August 2009 meeting between the two countries’ top officials. At the meeting, U.S. Congressman Howard Berman criticized recent agreements between Tehran and state-owned Chinese firms to construct several refineries in Iran. According to the U.S. delegation, which urged greater isolation of the Islamic Republic, such agreements are “exactly the wrong signal to send to Iran at a time when Tehran continues to enrich uranium in defiance of the international community.” [54]

In October 2009, Chinese Premier Wen Jiabao stated that China would strengthen ties with Iran saying “the Sino-Iranian relationship has witnessed rapid development, as the two countries’ leaders have frequent exchanges, and cooperation in trade and energy has widened and deepened.”  Even as the UN Security Council placed more sanctions on Iran, China and Iran’s bilateral trade continued to increase.  Russian Foreign Minister Sergei Lavrov said during an October 2009 meeting with US Secretary of State Hillary Clinton that because of the increased ties between Iran and China, further sanctions on Iran would be counterproductive.[55]