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China the key to controlling Iran

If Beijing votes against sanctions, things will get very tricky for Israel

    China’s moment has arrived. Conventional wisdom says that whichever way Russia votes at the UN Security Council, China follows. Those days are over. As we head for sanctions against Iran “within weeks, not months”, according to US Defence Secretary Robert Gates, China will choose its own path.

    Whichever way it votes, Beijing’s decision will be made in the new reality of international relations and China’s new understanding of its place in the world. Until recently Beijing’s position on many disputes was “we don’t have a dog in this fight”, and so for a quiet life they went with the Russians. But as the emerging global power, China now has a dog in most fights, and it wants to win.

    The Americans, British, Germans, French, Israelis and many Arab countries want “crippling sanctions” centred on the Revolutionary Guard, which controls a global business empire including banks and transport companies. Money from the Guard built the Tehran Metro and the Guard’s own Tehran airport. Other measures will be taken to restrict visas for leading political and business figures.

    China has massive investments in Iran, especially in the oil and gas industries. Crippling Iran hurts China. But, say the Americans, “do the math”. An Israeli or, less likely, an American strike on Iran could close the Strait of Hormuz and would almost certainly triple oil prices. This weekend, US Secretary of State Hillary Clinton is in Qatar and Saudi Arabia. Her talks will include ensuring the Gulf States could help supply China’s massive energy needs (at a good price) in case of a shortfall if China cuts business ties with the Tehran regime. The Americans will argue that it is in China’s interests to co-operate on sanctions.

    That “math” is the easy bit; diplomatic relations complicate matters.

    China has massive investments in Iran

    The USA and China remain locked in a series of bitter trade disputes, including the value of currency, tyres and chicken wings. The diplomatic atmosphere, already cool, took on a cold air after the recent US-Taiwan arms deal. To Beijing’s fury, President Obama then hinted he might meet the Dalai Lama.

    So Beijing is now weighing the above. It is in a strong position.

    For sanctions against Iran to be meaningful, Russia and China need to be on board. The Russians are hinting they will vote with the Americans, leaving the Chinese to exact their price if they so choose.

    It will not emerge in any texts of Security Council resolutions, but if China votes with the other Permanent Five Security Council members, somewhere along the way America will have made compromises on trade and energy.

    A “no” vote will mean the price offered was not high enough.

    President Obama said this week he had “bent over backwards” to co-operate with Iran. At the time, this column argued this was a clever ploy made in the understanding that it probably wouldn’t work, allowing the president to make the case that if he has to get tough, he didn’t rush into confrontation.

    The degree of confrontation is now partially down to China. If it comes on board, sanctions have a better chance of forcing Iran to co-operate with the UN Resolutions currently standing against it.

    Without China, sanctions are weakened, Israel becomes more nervous, and Obama has the most difficult decision of his presidency.

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