A Nuclear Deal with Chinese Characteristics: China’s Role in the P5+1 Talks with Iran

Like many in the international community, Beijing welcomed the Joint Comprehensive Plan of Action (JCPOA) agreed on July 14 between the members of the P5+1 group (the United States, the United Kingdom, France, China, Russia plus Germany) and Iran (Xinhua, July 14). As a new phase in Iran’s interaction with the world is about to begin, it is worthwhile considering the role China played and the possible future directions of China-Iran relations.

China’s Past Involvement in Iran’s Nuclear Program

Historically, China played an important role in Iran’s nuclear program. From 1985 to 1997, China, rather than Russia was Iran’s major nuclear partner. Amongst a range of assistance, China provided Iran with four small teaching and research reactors, including one utilizing heavy water–the key to producing plutonium and fissile bomb material. China also provided Iran with uranium including for enrichment purposes and specific chemicals for the purpose of extracting plutonium. Additionally, Chinese engineers helped the Atomic Energy Agency of Iran (AEOI), Iran’s official body responsible for implementing regulations and operating nuclear energy installations, design a plant to be used during the uranium enrichment process. China assisted Iran with other steps to develop self-reliant nuclear capability ranging from tube production to mining and is suspected of aiding with a centrifuge design supplied by Abdul Qadir Khan, a Pakistani scientist who ran a black market global proliferation network (Arms Control Association, March 1, 2004).

In 1997, China abandoned its nuclear cooperation with Iran, cancelling the delivery of two 300-megawatt power plants, and a single 27–megawatt reactor–what the U.S. calls a “plutonium production reactor.” After U.S. protests, in October 1997, the U.S. and China reached an agreement on Sino-Iranian cooperation in which China pledged not to sell nuclear power plants, the uranium processing plant mentioned above, heavy-water reactors nor a heavy-water production plant to Iran, and not to undertake new nuclear cooperation with Iran. [1]  

China Moves to Sanctioning Iran in Support of Non-Proliferation

China joined the International Atomic Energy Agency (IAEA) in 1984 and signed the Non-Proliferation Treaty (NPT) in 1993. Thereafter, it steadily increased its support to the non-proliferation regime. [2] China most likely sought to distance itself from what is known as the possible/past military dimensions (PMD) of Iran’s nuclear program, which will now be clarified in a Road Map signed between Iran and the IAEA (IAEA, July 15). An event that triggered China’s reluctance to engage seems to have been an Iranian request to send a team to observe a Chinese nuclear weapons test, as disclosed by Iranian military sources in 1996, as well as Chinese training of the Iranians in the conduct of nuclear explosion tests. While there is no evidence that China assisted Iran with nuclear weapons activities nor that Iran undertook any such activities, China’s past involvement likely affects its position on the PMD issues in the P5+1 negotiations today. Consequently, rather than the past dimensions, China is probably more concerned with the future direction of Iran’s nuclear program.

Following the disclosure of Iran’s Natanz Enrichment Facility in 2002 by an Iranian opposition group and the subsequent failed negotiations between the EU3 (the UK, France, Germany) and Iran between 2002 and 2005, Iran’s nuclear file was passed in early 2006 from the IAEA Board of Governors to the UN Security Council (Iran Primer, March 16). At this point, China moved to sanction Iran through UN Security Council resolutions 1737 (2006), 1747 (2007), 1803 (2008), and 1929 (2010). While some of these resolutions were weakened to gain both Russian and Chinese support, China’s representative during the relevant Security Council sessions stressed the need to find a diplomatic solution to the crisis and to safeguard the non-proliferation regime, inclusive of Iran’s right to nuclear energy for peaceful purposes (Security Council, Press Release, July 31, 2006;  Press Release, December 23, 2006; Press Release, June 9, 2010; Xinhua, April 04, 2010). China repeatedly maintained that sanctions were not an end in themselves, but rather a means to urge Iran to return to the negotiating table and that compliance on the part of Iran could lead to their suspension and even termination (Security Council Press Release, December 23, 2006; Press Release, March 24, 2007;  Press Release, March 3, 2008; Press Release, June 9, 2010).

At the same time, Chinese companies and individuals found themselves designated as sanctioned entities by the U.S. Treasury for supplying dual use items and other goods suitable for Iran’s missile and nuclear programs (SCMP, April 5, 2014; Asia Times, March 30, 2011). In response, Beijing continuously maintains that it opposes the sanctioning of Chinese companies and individuals by the application of U.S. domestic legislation and that it attaches the highest importance to non-proliferation export controls (MFA, April 30, 2014; Xinhua, April 9, 2009). Only last year, Beijing maintained that U.S. sanctions on Chinese companies would harm bilateral cooperation on non-proliferation (MFA, April 30, 2014). China has also maintained that any action undertaken on the Iranian nuclear file must be conducive to stability in the Middle East, must not affect the daily lives of the Iranian people, nor normal trade relations between Iran and other countries (UNSC, Press Release, March 24, 2007; Press Release, June 9, 2010).

On the one hand, China’s position shows that manufacturing interests and development of the domestic industrial base give Beijing a stake in the lifting of sanctions of Iran. In this sense, China is concerned about the ability to trade freely in order to pursue its peaceful development path (Xinhua, April 8). Consequently, Beijing opposes sanctions because they deter comprehensive development of energy and commercial ties with Iran (China Daily, June 30, 2012; Xinhua, June 29, 2012). The JCOPA provides for the termination of all previous UN Security Council resolutions, as well as sanctions created by means of US Presidential Orders and eventually Congressional sanctions (except those related to human rights and terrorism). Consequently, China will be free to increase its trade and economic ties with Iran while the JCOPA stipulates that the U.S., E.U., and its member states are to refrain from negatively affecting the normalization of trade and economic relations with Iran. [3]

In 2014, Iran and Iraq each provided nine percent of China’s crude oil imports, making them jointly China’s fourth largest crude oil supplier (EIA, May 15). In 2014, China’s exports to Iran valued at $24.3 billion, and in 2012, FDI valued at $702 million both of which are approximately 0.5 percent of China’s total exports and FDI worldwide. [4] Consequently, even if China disfavors sanctions, its dependence on Iran is limited and it has ready alternative suppliers of crude oil, namely, Saudi Arabia, Iran’s regional rival, which alone provides 16 per cent of China’s crude oil imports (EIA, May 15). 

China Views the Iranian Nuclear File within an International Security Paradigm

China’s position demonstrates that it views the Iranian nuclear issue within an international security framework, and in this regard has maintained that the role of the Security Council–of which China is a permanent member–in the P5+1 negotiations is crucial (Foreign Ministry, April 1). Undeniably, China’s position cannot be disconnected from other global security issues, particularly China’s relationship with Washington, as was indicated relatively early on by the U.S.-China agreement on Sino-Iranian cooperation. China’s position cannot be detached from Chinese perceptions of U.S. actions in the Asia-Pacific region and in the Gulf as provocative and destabilizing, and as compromising Beijing’s wider security concerns.

China has linked its cooperation on the Iranian nuclear file to U.S. policy on arms sales to Taiwan and while Chinese analysts contend that the U.S. would likely seek to prevent its allies, such as Japan, from becoming nuclear weapons states (NWS), they view U.S. non-proliferation pressure on Iran and on North Korea as a means for effecting regime change contrary to China’s interests (China.org, February 16, 2012; China.org, March 13, 2014; Global Times, January 14, 2014). Wu Sike, China’s former Special Envoy to the Middle East, specifically spoke out against toppling Middle Eastern regimes through revolutionary politics, which China perceives as the goal of some U.S. policies towards Iran (China.org, March 13, 2014; Global Times, January 14, 2014).

On the other hand, China is likely to be concerned that any Iranian decision to pursue a nuclear bomb–a highly unlikely outcome in view of Iran’s commitments under the JCPOA–would generate an Israeli strike contrary to its need for peace and stability in the Middle East to boost development at home (Xinhua, July 14; Haaretz, September 22, 2011).

China’s Recent Diplomatic Advances in the P5+1 Talks

Official rhetoric maintains that China is a neutral and constructive player capable of mediating between the parties as it frames the issue of Iran’s nuclear program as existing primarily between Washington and Tehran (Xinhua, July 14; Xinhua, July 2). Chinese officials downplay their overall level of influence on the negotiating process and outcomes. China’s current objective is to advance its role as a mediator within the negotiations in order to ensure peaceful resolution of this issue in line with its interests and to elevate its international standing as a responsible global player (Xinhua, April 28). Coinciding with President Xi Jinping’s more assertive foreign policy approach, China’s diplomacy in the nuclear talks beginning in 2013 has been bolder than in previous rounds, held under his predecessor, Hu Jintao, between 2009 and 2012. Even then, the Chinese government actively lobbied Washington to pursue direct dialogue with Iran (Wikileaks, March 03, 2009; Wikileaks, April 13, 2009).

China has approached the talks from a strategic prospective maintaining that to reach a comprehensive agreement, the P5+1 and Iran should go beyond addressing the Iranian nuclear issue by adopting a new security concept featuring mutual trust, mutual benefit, equality and coordination. China developed this argument as one of “Five Principles for a Comprehensive Solution” published by the Department of Arms Control within China’s Foreign Ministry following conclusion of the Joint Plan of Action (JPOA) in November 2013, and in a subsequent “Four-Point Proposal” released by the Foreign Minister Wang Yi in Chinese media following the March 31 deadline for conclusion of a preliminary agreement (Department of Arms Control, February 19, 2014; MFA, April 1, MFA, April 1, The Guardian, April 1).

The first point of the March proposal made clear that China considers the Iranian nuclear dispute as a political and security issue forming part of a wider problem to be solved at the systematic level and therefore requiring strategic trust rather than mere transparency as pushed for by the U.S. (Wu Riqiang, Carnegie, May 11). One senior Chinese official previously argued that the core of the problem is that Iran is afraid of America (The Spectator, June 22, 2013). Consequently, resolution of the crisis for China was dependent on taking political decisions, and not just on finding technical solutions for its various components (MFA, April 1). The second point advocated for compromise, and seemed to acknowledge that tough decisions would be necessary if the talks were to progress and if the shared goal of the parties was to reach agreement. Wang said “standstill will only lead us to failure”. The third point reiterated China’s call for a step-by-step approach and reciprocity, which opposes the Western narrative maintaining that nothing is concluded until all is concluded (The White House, April 2). The final point called for a package solution to resolve remaining issues, which China viewed as interconnected. With just one month to go before the June 30 deadline to conclude a final comprehensive agreement, the Foreign Ministry issued anew four viewpoints to reflect the state of play in the negotiations (MFA, June 4). Notably, at this stage, China advocated for advancing the negotiations, and reaching a comprehensive agreement sooner rather than later in order to safeguard the international nuclear non-proliferation regime.

The future direction of these diplomatic advances has yet to emerge in concrete terms. After reaching agreement on July 14, Wang maintained that China will continue to take an active part in the negotiations and will work tirelessly for a comprehensive, long-term solution (Xinhua, July 14). Interestingly, since 2013, a movement within the diplomatic circles of the Iran talks has been underway for China to play a greater role in IAEA inspections of Iran’s military sites, which are a sensitive issue for Tehran (SCMP, July 5; SCMP, September 26, 2013; Financial Times, November 6, 2013). Following the Lausanne agreement, the spokesman of the Atomic Energy Organization of Iran, Behrouz Kamalvandi, maintained that China would soon join Russia in the construction of power plants in the country (Fars, April 14). The JCPOA provides plenty of opportunity for China to shape a complete resolution of the dispute and to cooperate with Iran in the civilian nuclear energy field. While Beijing has not yet commented on that matter, cooperation in civilian nuclear energy with countries falling within its development Silk Road strategy is on the agenda noting that China is currently involved in the construction of 6 nuclear reactors in Pakistan and a total of 26 worldwide (NDRC, March 28; Xinhua, April 22; Daily Times, February 9).

Notes

1. John Garver. China & Iran: Ancient Partners in a Post-Imperial World. Seattle: University of Washington Press. 2006, pp.139-165.

2． Lora Saalman. “Balancing Chinese Interests on North Korea and Iran”. The Carnegie Papers. Carnegie-Tsinghua. April 2013.

3． Joint Comprehensive Plan of Action Vienna, 14 July 2015. https://eeas.europa.eu/top_stories/2015/150714_iran_nuclear_deal_en.htm

4． UN Comtrade data; Trade Statistics; UN Conference on Trade and Development, Bilateral FDI Statistics 2014; China’s Ministry of Commerce. Statistics of FDI in China in January-December 2012. https://english.mofcom.gov.cn/article/statistic/foreigninvestment/201301/20130100012618.shtml