Energy security a risky business with Iran

PUBLISHED : Monday, 20 December, 2010, 12:00am
UPDATED : Monday, 20 December, 2010, 12:00am

Despite China's long-standing ties to Iran, the rising Middle Eastern power is increasingly considered too risky - even for Beijing.

In addition to the economic and energy security gains to be made from supporting a state rich in natural resources, China has in the past tried to position itself at the head of the developing world with Iran as a key ally. China respects an old civilisation and a rising power seeking nuclear parity with others. Beijing's past military aid for Iran was designed partly to counterbalance US interests in the region. Yet China's support seems to have passed its peak.

Traditionally, China stressed Iran's right to nuclear energy and argued that wealthy powers used economic sanctions to bully developing nations that did not match the West's democratic ideal. However, no doubt with American and European Union (EU) trade benefits in mind, China began to re-evaluate its approach to Iran in 2006, finally endorsing UN sanctions. Beijing has since supported a series of UN Security Council resolutions, imposing ever-tighter sanctions and demanding the suspension of uranium enrichment activities.

However, in October The Washington Post reported that the US had intelligence on Chinese companies known to be providing illegal technology to Iran, including materials needed for enrichment. More recently, WikiLeaks cables indicate that Russian and North Korean missile technology was illicitly flown to Iran via China. There is no suggestion from the US that Beijing approved these transactions. Since the Clinton administration, the US has been convinced that China is no longer intentionally proliferating nuclear weapons. US officials have also recently credited China with major improvements in its export-control regulations. But Beijing must now allocate resources to ensure the regulations are enforced. Otherwise, a growing number of Chinese companies will face sanctions from the West.

Rather than overcommit to investments in Iran's natural resources, China would benefit from spreading its energy security risks. And, this process seems to have begun. While oil imports from its other main providers increased this year, China has significantly reduced its deliveries from Iran. This indicates China is taking a step away from Iran.

Earlier this year, the US passed its own sanctions targeting fuel importers and the EU banned investment in Iran's oil and gas industries. China is seeking to meet its energy needs from sources unthreatened by such political instability - a move encouraged by the West.

Next month, China will again join representatives of the four other permanent members of the UN Security Council plus Germany to meet Iranian officials. It is in China's interests to press hard for curbs to Iran's nuclear programme. This would bring greater stability for the region - diminishing the likelihood of Israeli or US military action - and mean greater security for Chinese investments; Iraq's oilfields were an early casualty in the conflict there.

Paul Letters is a Hong Kong-based writer studying for his master's degree in international affairs at the University of Hong Kong