China’s Persian Gulf Strategy: Israel and a Nuclearizing Iran 2009

On September 15, a task force co-chaired by Senator Charles Robb (D-VA) and Senator Daniel Coats (R-IN) at the Bipartisan Policy Center released a report [1], calling on President Barack Obama to devise a tougher strategy to prevent a nuclear Iran.  The subtitle of the report is “Time is Running Out” and it draws the conclusion that, “time is running out, and we [United States] need to adopt a more robust strategy in order to prevent both a nuclear Iran, and an Israeli military strike” (Voice of America, September 15).  This report comes on the heels of the International Atomic Energy Agency (IAEA) report and secret annex, released in August, entitled “Possible Military Dimensions of Iran’s Nuclear Program,” which stated that Iran will attain breakout capacity within 3-6 months (by November 2009 to February 2010) and that it was working on nuclear warhead designs [2]. While such startling revelations have prompted some Israeli politicians to ratchet up war talks, some members of the Six Power Talk (i.e. Britain, China, France, Germany, Russia and the United States) (P5+1) are still placing their hope on tougher sanctions of refined petroleum products to Iran if talks do not yield positive results by the end of the year. Beijing has so far resisted calls for stiffer sanctions—acceding only to restrictions on trade in nuclear-related materials and orders to freeze the overseas assets of some Iranian companies.

Meanwhile, Iran appears to be taking a leaf out of the playbook of its strategic ally, North Korea, and using the Six Power Talk (and Six Party Talks) to run out the clock before achieving nuclear breakout capacity. Unless China, along with Russia, are convinced to join the rest of the parties and become a responsible stakeholder and pass UNSC resolutions for tougher sanctions, the Iran nuclear merry-go-round will go on. For its part, Moscow seems to have signalled its willingness to go along with tougher sanctions if Iran does not implement the Geneva result (Financial Times, October 13). To understand the likelihood of China agreeing to apply sanctions on Iran, it is important to examine Sino-Iran relations to gauge China’s perceived costs and benefits of this action.

Iran in China’s Strategic Calculus

In 1993, China became a net importer of oil, and its rapid economic growth fueled by its increasing energy consumption has placed it as the second biggest energy consumer in the world, after the United States.  Yet, maritime supplies of oil are under the stewardship of the dominant naval power—the United States—that controls sea-lanes of communications (SLOC), and which also views China as a peer competitor.  As such, China is worried about (1) U.S. restriction of China’s oil imports over a Taiwan clash and (2) events abroad that may lead to price volatility hurting the Chinese economy.  In 2000, an article published by the prestigious Chinese Society for Strategy and Management (CSSM) under its influential Strategy and Management Journal recommended that China’s strategy in the Persian Gulf should be to continue to align with Iran [3].  According to the article’s author, Tang Shiping, an associate research fellow at the Chinese Academy of Social Sciences (CASS)—a leading government think-tank—the United States already controls the west bank of oil rich Persian Gulf via its pro-American proxies (e.g. Saudi Arabia and smaller Gulf states). Thus, according to Tang’s analysis, the Gulf is in effect an “internal sea” for the United States, and challenges to that position are likely to fail. Yet, if China and Russia expand relations with Iran, they could maintain a “minimum balance” to thwart U.S. moves. Since securing oil imports from the Gulf requires both U.S.-controlled west bank and the China-Russia supported Iranian east bank, this axis would prevent the United States from implementing oil embargoes against other countries. If the United States and China should ever have a military clash over Taiwan, Washington would not shut off China’s Gulf oil supplies since China, Russia, and Iran control the Gulf’s “east bank” [4].

China needs Iran not only to keep an open flow of oil from the Persian Gulf, but also to serve as a node in the new energy Silk Road connecting the Persian Gulf, Caspian Sea and Central Asia to China. In what has been coined as an Asian Energy Security Grid—or Pipelineistan (Asia Times Online, July 26)—China needs Iran in a series of pipelines such as the Iran-Pakistan (IP) pipeline and the interconnection between Iran and Turkmenistan, with an eventual direct land link between Iran and China to bypass the Strait of Malacca, patrolled by U.S. navy. In September 2009, Turkmenistan announced it would begin to supply natural gas through two new pipelines to China and Iran in December (The Associated Press, September 19).

Moreover, China views Iran as a key partner in counter-balancing U.S. hegemony and the drive toward a multi-polar world. Thus, China’s strategy appears to be a balancing act of engaging Iran while simultaneously not alienating the United States (Xinhua News Agency, June 22; Tehran Abar, June 29).

China’s Persian Gulf Strategy

Iran-Iraq War 1980-1988

China’s Persian Gulf Strategy of aligning with Iran was visible during the 1980-88 Iran-Iraq War. During the war, China maintained neutrality while voting against UNSC Resolution for sanctions. Its official position is that sanctions intensify conflicts, and China thus refused to move the 1984 Resolution 552 (which would prevent attacks on neutral commerce in the Persian Gulf) to sanctions. It also supplied arms to Iran—in 1982, U.S. officials charged China and North Korea of accounting for 40 percent of Iran’s arms supplies, and by 1987 this figure increased to 70 percent [5]. When Iran began attacking neutral Kuwaiti vessels in 1986, and U.S. satellite imagery in 1987 indicated that Iran was installing Chinese Silkworm anti-ship missiles along the Strait of Hormuz, the U.S. decided to reflag Kuwaiti vessels. Yet, the United States and China almost went to war over Iran when in October 1987 a Silkworm struck a U.S. reflagged tanker, which prompted U.S. retaliation by striking and destroying an Iranian oil production platform in the Gulf. Concerned with negative perception of China perpetuating the war by arming Iran, and helping Tehran to challenge the United States militarily in a conflict that may escalate into a full war [6], Iran finally accepted Resolution 598 for ceasefire in July 1988. During the war, China was perceived to be a reliable partner to Iran and thereafter became a key interlocutor for Iran.

Israel and a Nuclearizing Iran 2009

The alignment of China’s Persian Gulf strategy with Iran appears to be playing out in the current "stalemate" over Iran’s illicit nuclear program—especially in light of the new Fordoo nuclear site near Qom. The Six Powers plan to apply sanctions on refined petroleum products if the Geneva talks fail to produce concrete results over the next few months, but it is highly unlikely China will support it based on its history and its strategic interests in Iran. China signed a $40 billion deal in July 2009 to refine Iran’s oil (Times, July 16), and is delivering about 40,000 bpd of gasoline (Fars News Agency, October 6). Yin Gang, a senior expert on Middle East studies at CASS, stated that China will reject any efforts by the United States to bar Iran from exporting crude oil, but added that the possibility is low. "China views Iran’s medium and long-range missile technology as a strategic deterrence," Yin said, "and nuclear non-proliferation is the bottom line that China adheres to" (Global Times [China], September 29; September 30). According to Yin, China’s agreement to a fourth resolution to impose new sanctions on Iran would depend upon whether the United States "insists on tough action" and whether Iran "remains defiant." According to Tian Wenlin of the China Institute of Contemporary International Relations (CICIR), "Iran is an important economic and trade partner of China." "All cooperation between the two countries abides by international laws and regulations, which should not be criticized by any third party," Tian said (Tehran Times, October 1).    

Additionally, Malaysia’s state-owned oil company Petronas delivered three shipments of gasoline to Iran in August, each containing about 93,000 bbl (Times, September 29). This is in addition to Venezuela supplying 20,000 bpd of gasoline to Iran beginning in October (The Associated Press, September 7). Iran imports about 120,000 bpd of gasoline, so these bilateral deals are presently supplying about half of Iran’s total imports.  Thus, Iran seems to hedge itself against possible sanctions by (1) finding additional friendly nations to export refined petroleum products in the near term; (2) building its domestic refining capacity in the medium term; and (3) continuing on its nuclear path to reach break out capability, based on North Korea’s successful model of “running out the clock” with engagement and Six Power Talks.

Conventional wisdom holds that China and other nations with energy interests in Iran would not support sanctions, whether to maintain their trade relations or for fear of Iranian retaliation by corking the Strait of Hormuz bottleneck. Upon closer scrutiny, however, this appears to be a relatively minor concern to China.  Although 1/3 of China’s oil imports flowing through the Hormuz seem to be a large figure, by disaggregating the data and looking at China’s overall energy mix, oil consists of only 20 percent of its total mix, while 70 percent of China’s economy is fueled by its abundant domestic supply of coal [7].  So 1/3 of 20 percent yields just 6.6 percent of China’s total energy use coming through the Strait of Hormuz.  Japan, a U.S. ally, is actually the number one East Asian importer of Middle East oil, and as Yitzhak Shichor from the University of Haifa argued, China’s limited reliance on Persian Gulf oil relative to other Asian economies is one reason for Beijing’s reluctance to flag the Hormuz Strait as an issue (China Brief, September 22, 2008).  Other reasons include the fact that China does not want to jeopardize its economic benefits, political advantages such as arms trade (more profitable than energy trade), and having Iran as a key node in the land-based energy Silk Road mentioned earlier.

Indeed, China has used its arms trade with Iran to entangle its U.S. relations over Taiwan. For example, on 2 September 1992, President Bush announced the sale of 150 F-15 fighters to Taiwan, and China immediately threatened to sell M-11 missiles to Pakistan and components to Iran. China contends that F-16 and missiles were both arms proliferation, and the U.S. has no right to play a double standard. The U.S. protested that M-11 missile components violate China’s commitments to MTCR guidelines and parameters, while China riposted by stating that F-16 sales to Taiwan violate the 1982 Joint Communiqué dealing with U.S. arms sales to Taiwan (The Washington Times, October 4, 1994). Over subsequent years, Chinese officials repeatedly evoked the Taiwan-Iran linkage to justify its continued arms proliferation to Iran [8].

According to Professor Shi Yinhong, the director of the Center for American Studies at Renmin University in Beijing, "China will do its utmost to find a balance … dilute it [sanctions], to make it limited, rather than veto it" (New York Time, September 30). Given its Persian Gulf strategy standing as the Great Wall of China blocking the road toward future sanctions on Iran, this will present serious challenges for Israel and for the global nonproliferation regime.

Challenges for Israel and global nonproliferation regime

For Israel, given the grim prospect of sanctions, inability of the Six Powers to arrest Iran’s nuclear weapons development, impending delivery of the S-300 anti-aircraft system, and increasing Israeli perception that the United States would not support Israel, the military option remains on the table. In March 2009, the Center for Strategic and International Studies released a study on possible Israeli strikes on Iran’s nuclear facilities without U.S. support [9]. The first scenario consists of three possible routes of Israeli air-force strike, with the highest political risk but the lowest operational risk via a southern route over Jordan, Saudi Arabia and Iraqi airspace. The second scenario consists of a ballistic missile attack, the Jericho III, capable of carrying a 750 kg nuclear warhead and a range that covers the entire Middle East, Africa, Europe, Asia, and almost all parts of North America [10]. Yet, given the increasing complications of an air strike, some Israeli defense analysts posit that a more realistic military option is a nuclear missile strike [11].

If Israel is forced to act alone, and the international community is unable to stop Iran’s nuclear weapons aspirations, a nuclear strike in the Middle East would be a disaster. Israel almost used nuclear weapons (The Samson Option) during the 1973 Yom Kippur War, when 13 twenty-kiloton atomic weapons were assembled and the Middle East teetered on the edge of a nuclear strike [12]. With the current Iranian nuclear program, the Middle East once again finds itself teetering on the edge of a nuclear strike as the sand clock nears empty before Iran acquires breakout capability or Israel launches its nuclear missiles. Thus, unless China, along with Russia, unite with the remaining six powers to accelerate effective sanctions to arrest Iran’s illicit nuclear weapons program, this may lead to a cascade of destabilizing nuclear proliferation in the Middle East and East Asia. If China wants to maintain a new energy silk road with Iran in the long term, it would need to act soon and remove itself as an obstacle to immediate and effective sanctions on Iran’s nuclear program.  

Notes

1. Senator Daniel Coats, Senator Robb and General (ret.) Charles Wald, Meeting the Challenge: Time is Running Out, Bipartisan Policy Center, September 2009.
2. Institute for Science and International Security Report, “Excerpts from Internal IAEA Document on Alleged Iranian Nuclear Weaponization,” October 2, 2009; Julian Borger, “IAEA secret report:  Iran worked on nuclear warhead”, The Guardian, September 18, 2009; William J Broad and David Sanger, “Report says Iran has data to make a nuclear bomb”, New York Times, October 4, 2009.
3. Tang Shiping, “Lixiang anquan huanjing yu xin shiji zhonguo da zhuanlue” [ideal security environment and China’s grand strategy in the new century], zhanlue yu guanli (Strategy and Management), no 6, (2000), 45-46; Lin, Yueh-Chyn, International Relations in the Gulf Region after the Cold War (Beijing: Social Sciences Academic Press, 2002).
4. This scenario would provide “insurance against a remote contingency” (fang wanyi de baoxian), Tang Shiping, Ibid; Christina Y. Lin, “Militarisation of China’s Energy Security Policy:  Defence Cooperation and WMD Proliferation Along its String of Pearls in the Indian Ocean”, Institut fur Strategie- Politik- Sicherheits- und Wirtschaftsberatung (ISPSW), Berlin, Germany, June 11, 2008.  
5. “Iran’s Chinese Air Force,” Middle East Defense News 2, no. 4 (November 21, 1988): 1-2; John W. Garver, China & Iran: Ancient Partners in a Post-Imperial World (Seattle, WA: University of Washington Press, 2006), p.72.
6. Ibid, Xinhua news analysis after the October clash said, “The military involvement of big powers has aggravated tension” in the Gulf, creating an “explosive situation.” (Xinhua News Agency, October 21, 1987; 26 October, 1987, p.3.).  An article in Jiefangjun bao (Liberation Army Daily—the newspaper of the PLA) quoted a 1984 comment by Henry Kissinger that “if both sides (Iran and Iraq) lose in the war, this will be advantageous to the West.” It assessed that although the U.S. was concerned about “safety in oil transportation”, it was more concerned about control of the Gulf, and concluded that both superpowers should withdraw their military forces from the Gulf. Zhang Hanlong, “Peace, the General Trend in the World,” Jiefangjun bao [Liberation Army Daily], August 29, 1988.
7. Energy Information Agency, “China Country Profile,” updated July 2009.
8. “China Ire at U.S. Could Prompt More Arms Sales to Iran,” Defense News, 14-20 September 1992, p.19; “PRC to Boycott UN Arms Talks,” Qol Yisra’el (Jerusalem), 16 September 1992; Barbara Starr, “U.S. Links Chinese Ties to Missile Exports,” Jane’s Defence Weekly 22, no. 15 (October 15, 1994): 5. Jon B. Alterman and John W. Garver, The Vital Triangle: China, The United States, and the Middle East, (Washington, D.C.: The CSIS Press, 2008), p.48.
9. Anthony H. Cordesman and Abdullah Toukan, “Study on a Possible Israeli Strike on Iran’s Nuclear Development Facilities,” CSIS, 14 March 2009.
10. Cordesman and Toukan, “Study on a Possible Israeli Strike”; Wikipedia, “Jericho missile,” updated October 1, 2009; Dan Williams, “Israel could use ballistic missiles against Iran-report”, Reuters, March 17, 2009.
11. Amir Tsarfati, former vice governor of Jericho and captain in the Israeli army reserve, author’s conference notes on Israel, “Standing Alone”, Costa Mesa, California, August 21, 2009; Dan Williams, “Israel could use ballistic missiles against Iran-report”, Reuters, March 17, 2009.
12. LTC Warner D. Farr, The Third Temple’s Holy of Holies: Israel’s Nuclear Weapons, The Counter-proliferation Papers Future Warfare Series No. 2, Air War College (Alabama: Air University Press, Maxwell AFB, 1999), p.10.