China Displays Independence in Relationship with Iran

Critics say China's need for Iranian oil will cause Beijing to resist the push for United Nations' sanctions in response to Tehran's suspected nuclear weapons program. But a closer look reveals a more nuanced policy in Beijing.

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RENEE MONTAGNE, host:

And as the U.N. Security Council decides whether to sanction Iran for its nuclear activities, permanent member China is likely to be a key player. Some analysts say the Bush Administration needs to understand that Chinese leaders face some difficult economic and political calculations in their dealings with Iran and the United States.

NPR's Corey Flintoff reports.

COREY FLINTOFF reporting: China's roaring economy is driving an ever-growing demand for energy and that's a key concern for the Communist Party.

Mr. DAVID LAMPTON (Director of the Chinese Studies program at Johns Hopkins School of Advance International Studies): The Chinese leadership believes that its legitimacy is a function of economic growth in China and that's what the Communist Party believes keeps them in power.

FLINTOFF: David Lampton is director of the Chinese Studies program at Johns Hopkins School of Advance International Studies.

Mr. LAMPTON: And energy keeps the economy going so China's in a desperate search, not only in Iran, but in Africa, in Latin America, in Southeast Asia, for energy sources.

FLINTOFF: Jim Walsh is a foreign policy researcher at MIT who recently attended an Energy Cooperation Conference between Iranian and Chinese officials in Tehran.

Dr. JIM WALSH (Research Associate, Security Studies Program, MIT): Like a lot of Americans, I walked into that conference with a very simplistic notion suggesting that, well, of course, China's going to do whatever Iran tells it to do and as long as China needs Iranian oil, they're going to vote Iran's interest at the security council or wherever else.

FLINTOFF: But Walsh says the Iranians got what he called a jaw-dropping surprise from senior Chinese officials.

Dr. WALSH: Chinese officials were actually surprisingly blunt in saying, hey, just because we trade doesn't mean we're going to vote they way you want us to vote. You know, we don't need you as much as you think we do.

Dr. DALI YANG (Chairman, Political Science Department, University of Chicago, Chicago, Illinois): I would not be surprised because the Chinese oil majors have been careful. They are willing to walk away from deals if necessary.

FLINTOFF: Dali Yang is Chairman of the Political Science Department at the University of Chicago.

Dr. YANG: And they do understand that oil is (unintelligible) across the world and, in that sense, if you can buy from Iran you can probably buy it from elsewhere.

FLINTOFF: Jamal Qureshi is the lead oil market analyst at PFC Energy in Washington. He says China is already one of the better diversified importers of crude oil.

Mr. JAMAL QURESHI (Oil Market Analyst, PFC Energy): They pull a lot, for example, from West Africa, and they're starting even to pull some more from Venezuela now. That said, they still do pull in about 12 percent of their crude imports from Iran and that has been a significant jump from, say, a couple of years ago when it was down in, maybe one percent-ish.

FLINTOFF: Qureshi says the Chinese are also trying to keep from being too dependent on any one type of energy.

Mr. QURESHI: Probably should have a lot of domestic coal, they're trying to use more natural gas and they're trying to work on demand management as well in keeping demand growth down.

FLINTOFF: Dali Yang says China's relationship with Iran is affected by other considerations as well.

Dr. YANG: In China, leadership's also very keen to be seen as a responsible, great power in global politics and also, it has considerations of its own in terms of nuclear proliferation, so in that sense, the Chinese would not want to be seen as selling out for the sake of oil alone.

FLINTOFF: Yang says China's primary concerns about nuclear proliferation have to do with its neighbor, North Korea. If China is seen as being too accommodating to Iran's nuclear ambitions, then North Korea may demand the same treatment. Jim Walsh of MIT says the Chinese appear to be making a smart calculation in their dealings with Iran.

Dr. WALSH: And here's why. Yes, they need oil and energy, but the need for that oil and energy is really going to peak some years down the road. It's not an immediate crisis situation for them. Moreover, they have other interests that they need to be weighing here, including trade and political relationships with the U.S., with Europe, with other countries that have an interest in this issue..

FLINTOFF: China enjoyed a trade surplus with the U.S. of more than $200 billion last year alone and that's another key reason why Iran's nuclear ambitions may not get the kid glove treatment from China in the U.N. Security Council. Corey Flintoff, NPR News, Washington.

MONTAGNE: And we have an update, now on a story we're following in Baghdad. Saddam Hussein is testifying today in his trial for crimes against humanity. For the first time, he formally took the stand, insisting that he was Iraq's leader and praising the insurgency. That prompted the chief judge to close the session to the public-because he said, Saddam was making political speeches.

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