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13-01-06, 13:53
Saturday, January 14, 2006

China faces dilemma over Iran standoff

By Cindy Sui, Agence France-Presse

BEIJING: China faces a dilemma over the increasingly tense Iranian nuclear issue, having to weigh relations with the United States against its own energy and political interests, analysts say.

As Washington threatens to propose sanctions at the UN Security Council to punish Iran for refusing to give up its alleged nuclear weapons program, Beijing is playing a careful balancing act.

As one of five permanent members, Beijing wields veto power and can block Washington on the council.

China does not want to alienate Washington while at the same time is very protective over its energy ties with Tehran, experts said.

In addition to its quest for oil to feed its booming economy, China’s history and world view, especially its wariness about US dominance, greatly influences how Beijing will act, they said.

“China largely looks at it from two points of view—American domination of the world of the Middle East region, and of the oil market,” said Joseph Cheng, a political analyst with Hong Kong’s City University.

China imports about 40 percent of the oil it consumes, with that percentage expected to rise as the world’s most populous developing nation undergoes rapid economic expansion.

It is seeking to widen its sources of oil, as it currently gets 70 percent of its imports from the Middle East.

Although the amount it imports from Iran is still relatively small, it wants to increase imports of not only oil but natural gas from Iran, which holds the world’s second-largest oil and gas reserves.

A Chinese delegation was in Tehran last month to revive negotiations on a major oil and gas exports deal potentially worth more than 100 billion dollars.

If sealed, the agreement would mark one of the biggest foreign contracts ever for Iran, which is usually cautious about making significant trade deals with other countries.

Tehran is meanwhile looking for Chinese protection on the Security Council.

“Iran and China have been courting each other in the oil and gas arena,” said Victor Shum, a Singapore-based oil analyst with the US energy consulting firm Purvin and Gertz.

“China is concerned about security of supply and has been active in pursuing investment and tie-ups with producer nations in order to secure their own supply.”

China also has a traditional affinity with Third-World countries trying to counter the interference of powerful nations in their domestic affairs, Cheng said.

It identifies with these countries’ desire to be able to defend itself, having fought for 100 years until 1949 to rid its territory of foreign occupation and create a sovereign state.

At the same time, China sides with Washington in opposing a proliferation of nuclear weapons, fearing an unstable world could hinder its pursuit of its over-riding goals—raising the living standards of its people and maintaining the Communist Party’s hold on power.

Beijing also fears proliferation could give rise to increased terrorism, according to Cheng.

It is wary of ethnic Uighur Muslims, who are trying to create a separate state in its Xinjiang region, getting weapons or other backing from Islamic militants.

On Thursday China criticized Iran’s controversial resumption of its nuclear program and urged it to return to negotiations with the European Union.

But China traditionally opposes sanctions, seeing it as unnecessary confrontation in international disputes.

“It would only make the issue more complicated and difficult to work out,” Chinese Foreign Minister Li Zhaoxing told a news conference in a visit to Tehran in November.

Yet China also generally avoids vetoing US-backed resolutions it disagrees with, so as not to appear in direct confrontation with Washington.

In this case Beijing will likely keep urging both sides to hold more dialogue, to avoid upsetting either side, according to Cheng.

If it gets to a vote on sanctions, the most likely scenario is China will abstain, the safest way out of the dilemma, Cheng said.