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Iran and Asia 1: China Is The Quiet Giant

Yun Sun

      China is the quiet giant in the latest diplomatic campaign to prevent Iran from getting a bomb. As Tehran’s largest trading partner, Beijing has enormous political and economic leverage over the Islamic Republic. As a veto-wielding member of the United Nations, its position can also make or break any resolution. China has often followed Russia’s lead on Iran policy, but its decisions reflect independent dynamics between Beijing and Tehran that will be key to its future actions.

           Arguably more than any other country, China wants to end international economic sanctions on Iran so it can increase trade. Beijing and Tehran have become increasingly important partners over the past decade. China also does not want to risk sanctions itself for doing business with Tehran, as U.S. law now stipulates.

            At the height of business in 2011, China bought up to 557,000 barrels of oil per day from Iran – or almost 11 percent of its oil imports – to fuel economic growth. (In 2001, China imported 18 percent of its oil from Iran, but the volume was only 217,891 bpd, far less than in 2011.) Among key figures for 2012, according to
China’s Ministry of Foreign Affairs:

      • Sino-Iranian trade totaled $36.47 billion,
      • China imported $24.86 billion worth of goods from Iran, largely crude oil and mineral oils.
      • China exported $11.6 billion of goods to Iran, largely machinery, textiles and petrochemical products.
 
            But new sanctions, particularly tough measures imposed by the United States in mid-2012, have had a major impact on the People’s Republic’s energy trade with the Islamic Republic. China’s total oil imports from Iran decreased 21 percent – from 557,000 barrels per day to 438,448 barrels per day – in 2012. Oil trade dropped another 2.2 percent in 2013 to 428,840 barrels per day.
 
            But Beijing and Tehran still see each other as pivotal partners for the future. China is considered a key future investor in Iran’s oil and gas fields, with great potential to invest in downstream refineries to improve Iran’s outdated refining infrastructure.
 
      China now shares the concerns of the world’s major powers about Iran’s controversial nuclear program. Beijing wants to prevent Tehran from developing the world’s deadliest weapon, which would in turn dilute China’s nuclear power status. Beijing voted for four U.N. sanctions resolutions, although it balked at subsequent more punitive measures sought by the West. Top foreign ministry officials have also participated in the Geneva talks.
 
      At the same time, however, Beijing does not want the terms in a long-term nuclear deal to be so demanding that diplomacy fails—and sanctions continue. China envisions a final resolution that will protect Iran’s peaceful use of nuclear technologies, but effectively prevent Iran from developing nuclear weapons.
 
            China’s near-term goal is to do more business with Iran without facing the threat of being penalized for violating U.S. trade sanctions. The sanctions against Iran, which were announced in late 2011 and took effect in June 2012, subject any bank, company or government that does business with Iran’s Central Bank to American penalties.
 
            To qualify for the U.S. waiver from the sanctions, issued every six months, Beijing has been forced to cut back its annual crude oil imports from Iran since 2012. China calculated that its economic and political interests would suffer more by ignoring the U.S. restrictions, which was also the basic reason for China’s acquiescence to U.S. sanctions against Iran.
 
            Trade with Iran is critically important because China is now the world’s largest net oil importer, which is calculated as liquid fuels consumption minus domestic production. China’s dependence on foreign crude is expected to rise to 61 percent by 2015 from 54 percent in 2010. Iran was China’s sixth-largest oil supplier in 2013,  fourth-largest supplier in 2012 and the third-largest r for most of the previous decade. In 2013, China imported an average of 428,840 barrels of oil per day from Iran. The 2012 restrictions on Beijing’s oil purchases from Iran have in turn undermined China’s energy security. Economic sanctions have reduced the overall supply on the global oil market, generally driving up the international price.
 
      Economic sanctions also constrain China’s other trade with and investment in Iran. U.S. sanctions have hindered implementation of earlier agreements. In 2012, China was forced to cancel mega projects such as the $4.7 billion development of Phase 11 of South Pars gas field, one of the world’s richest reserves, and a $2 billion hydropower project.
 
      Sanctions have also obstructed China’s payment for its crude oil purchases. China owed Iran at least $22 billion for missed payments by the third quarter of 2013, an issue at the top of the agenda when Iranian Parliament Speaker Ali Larijani visited Beijing in October.
 
            Chinese companies that have been sanctioned by the U.S. for their trade with Iran include:
 
      • Zhuhai Zhenrong, a state-owned company with a military background and the largest Chinese importer of Iranian crude oil
      • the Bank of Kunlun, controlled by China’s largest oil company, China National Petroleum Corporation.
      • and Poly Technologies, a subsidiary of state-owned defense company China Poly Group.
 
             Most of China’s oil comes from the Middle East, mainly countries allied with the United States. Because of those longstanding alliances, Beijing wants its own reliable ally in the region, both to supply oil and to counterbalance American power. China views Iran as the natural choice.
 
      A peaceful settlement of the nuclear dispute between Iran and the six other powers—the United States, Britain, China, France, Germany and Russia—would also improve prospects for regional security, including uninterrupted energy supplies from the Middle East. In recent years, Iranian threats to block the Strait of Hormuz and a possible U.S. or Israeli military attack on Iran have cast a dark shadow over regional stability as well as production and transportation of oil vital to China.
 
            Iran is both a policy asset and a liability for China in its relations with the United States. Iran gives Beijing leverage against Washington when Washington needs cooperation on sanctions, but Iran also turns into a liability when Tehran fails to meet Washington’s demands.
 
             China sees the improvement of U.S.-Iran relations as essential to a deal with Iran. Many Chinese analysts contend Iran’s quest for nuclear technology is due to its sense of vulnerability in the region and from U.S. pressure. Beijing contends that the main solutions lie in improving U.S.-Iran relations and/or developing a new regional security framework. The Chinese are now working to facilitate a dialogue between Iran and the West and lobby Iran to “participate in the talks with flexibility and pragmatism,” according to Chinese State Councilor Yang Jiechi.
 
            At the same time, however, China does not want Washington and Tehran to get so close that the Sino-Iranian strategic alignment against the United States is undermined. Chinese leaders believe that maintaining strong ties with Iran gives it some leverage over U.S. policy. Iran’s regional aspirations also differ from China’s. Beijing is keen on building friendly ties with both Israel and Saudi Arabia, Iran’s top Middle East rivals.
 
            Failure to reach a peaceful international settlement over Iran’s nuclear ambitions would be bad news for China. An Iranian nuclear weapon could lead to a regional nuclear arms race, which would be China’s worst nightmare. But many Chinese analysts believe that Iran will not follow in the footsteps of North Korea—and will not go so far as developing an atomic bomb and testing it.
 
Yun Sun is a fellow in the East Asia program at the Stimson Center, a nonprofit and nonpartisan international security think tank.

 
 

Photo credits: President.ir, Persian Gulf by Stevertigo at en.wikipedia [Public domain], from Wikimedia Commons
 
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Erdogan in Tehran : Iran is Second Home

            On January 29, Turkish Prime Minister Recep Tayyip Erdogan visited Iran to strengthen bilateral economic ties and ease tensions over the Syrian crisis. Erdogan made the trip amidst a sweeping corruption probe that has led to the arrest of dozens of businessmen and politicians allegedly associated with him. Iran is “like a second home,” Erdogan told Supreme Leader Ayatollah Ali Khamenei (below). “A preferential commercial agreement was of utmost importance. I am very pleased to sign it,” he said during a press conference with Iranian Vice President Eshaq Jahangiri. Iranian television reported that Erdogan signed three trade deals.
      Erdogan also announced that Ankara reached an agreement with Tehran on fighting terrorism in Syria. Both countries are concerned with the growth of extremist Sunni groups there, some of which are affiliated with al Qaeda.
      But Ankara and Tehran have otherwise taken opposing positions on the Syrian conflict. Iran has supported President Bashar al Assad while Turkey has urged him to step down. And Ankara has reportedly supported the opposition and provided refuge to rebels. The following are excerpted remarks from Erdogan’s visit.
 
Turkish Prime Minister Recep Tayyip Erdogan
            “Today we had a good chance to review bilateral ties… I would like to mention specifically, and to express my satisfaction with, the agreement we signed in the preferential trade field. It is obvious that we import from Iran crude oil and gas, which are strategic energy sources, and we [will be] able to increase the volume of these imports.
 “We reached an agreement with Iran to fight terrorism.”
            Jan. 29, 2014 in a joint press conference with Iranian Vice President Eshaq Jahangiri
 

Supreme Leader Ayatollah Ali Khamenei

Iranian Vice President Eshaq Jahangiri
            “We have taken concrete decisions to bolster bilateral relations between the two countries. We have reached a nice agreement on natural gas exports. We believe that the visit by the Turkish prime minister will be cornerstone in bilateral relations and it will help improve ties between the two countries.”
            Jan. 29, 2014 in a joint press conference with Prime Minister Recep Tayyip Erdogan
 
Iranian Foreign Ministry Spokesperson Marzieh Afkham
            “Our relations with Turkey have entered a new phase and we hope this trend continues. Besides serving the interests of the two countries, we hope our dialogue (with Turkey) serve regional interests as well. As two neighbors and Muslim countries, Iran and Turkey enjoy many commonalities and many cooperation opportunities.”
            Jan. 29, 2014 in remarks to the press
 
Click here for more info on Iran’s relations with Turkey.
 
Photo credits: President.ir
 
 

State of the Union: Obama on Iran

            On January 28, President Barack Obama warned Congress that he would veto a new sanctions bill that could jeopardize diplomacy with Iran. In his State of the Union address, Obama attributed the halting of Iran's controversial nuclear program to “American diplomacy, backed by pressure,”  including sanctions. But the president also warned that the next round of negotiations on a comprehensive solution will be difficult. The following is an excerpt from Obama’s speech.

      American diplomacy, backed by pressure, that has halted the progress of Iran’s nuclear program – and rolled parts of that program back – for the very first time in a decade.  As we gather here tonight, Iran has begun to eliminate its stockpile of higher levels of enriched uranium.  It is not installing advanced centrifuges.  Unprecedented inspections help the world verify, every day, that Iran is not building a bomb.  And with our allies and partners, we’re engaged in negotiations to see if we can peacefully achieve a goal we all share: preventing Iran from obtaining a nuclear weapon.

      These negotiations will be difficult.  They may not succeed.  We are clear-eyed about Iran’s support for terrorist organizations like Hezbollah, which threaten our allies; and the mistrust between our nations cannot be wished away.  But these negotiations do not rely on trust; any long-term deal we agree to must be based on verifiable action that convinces us and the international community that Iran is not building a nuclear bomb.  If John F. Kennedy and Ronald Reagan could negotiate with the Soviet Union, then surely a strong and confident America can negotiate with less powerful adversaries today.
            The sanctions that we put in place helped make this opportunity possible.  But let me be clear: if this Congress sends me a new sanctions bill now that threatens to derail these talks, I will veto it.  For the sake of our national security, we must give diplomacy a chance to succeed.  If Iran’s leaders do not seize this opportunity, then I will be the first to call for more sanctions, and stand ready to exercise all options to make sure Iran does not build a nuclear weapon.  But if Iran’s leaders do seize the chance, then Iran could take an important step to rejoin the community of nations, and we will have resolved one of the leading security challenges of our time without the risks of war.
 
            Finally, let’s remember that our leadership is defined not just by our defense against threats, but by the enormous opportunities to do good and promote understanding around the globe – to forge greater cooperation, to expand new markets, to free people from fear and want.  And no one is better positioned to take advantage of those opportunities than America.
 
Click here for the full text. 
 

 


Thousands Suffer from Chemical Weapons Quarter Century Later

            The following article first appeared in Time magazine.

Robin Wright

           Hassan Hassani Sa’di has been dying from chemical weapons for almost 30 years. The Iranian still remembers the moment he realized Iraqi warplanes were dropping more than regular bombs. “I knew,” he says, “because of the smell of garlic.” It was the pungent and telltale aroma of mustard gas.
      Death from mustard gas is gruesome; so is survival. It hideously disfigures skin, sears lungs and mucus membranes, and often blinds. Unlike nerve gas, there’s no antidote. Sa’di, then an 18-year-old fighting in the Middle East’s grisliest modern war — the 8-year conflict between Iran and Iraq — survived the Iraqi attack on the strategic Fao Peninsula in 1985. Within hours, his body was badly blistered, and he had gone blind. “The last thing I remember is vomiting green,” he says, during an interview at the Tehran Peace Museum, a facility dedicated to education and the documentation of weapons of mass destruction.
      Iran is today the world’s largest laboratory for the study of the effects of chemical weapons, in part because of the sheer numbers of Iranian victims, but also because of a little-studied phenomenon called low-dose exposure. In 1991, a declassified CIA report estimated that Iran suffered more than 50,000 casualties from Iraq’s repeated use of nerve agents and toxic gases in the 1980s. Mustard gas — in dusty, liquid and vapor forms — was used the most during the war. It was packed into bombs and artillery shells, then fired at frontlines and beyond, including at hospitals.
            Years after the war, however, Iranian doctors noticed that respiratory diseases with unusual side-symptoms — corneal disintegration, rotting teeth and dementia, a combination synonymous with mustard gas — had started killing off veterans who had not always been on the frontlines. Civilians were also dying.
            So in 2000, the government launched a media campaign urging people who had been in certain areas during the war to report for check-ups. The ads didn’t specify why.
The troubling pattern was soon diagnosed as secondary contamination to mustard gas. “We may only have seen the tip of the iceberg. We may not yet have seen the majority of victims,” Dr. Farhad Hashemnezhad told me in 2002. “At least 20 percent of the current patients are civilians who didn’t think they were close enough to be exposed.”
            Numbers have since soared from the lingering, and unanticipated, effects of mustard gas. Dr. Shahriar Khateri, Iran’s leading expert on chemical weapons victims, now says 70,000 are registered, many from low-dose exposure that is now killing them.
            “We now know that the latency period can be 40 years,” says Khateri, who is unsure of his own fate. Khateri volunteered to fight at age 15 after his brother was killed in the war. He was gassed in 1987 during the battle for southern port of Khorramshahr. After the war, he went to medical school and co-founded the Society for Chemical Weapons Victims Support.
Iranian doctors say the final toll of Iraq’s chemical weapons could ultimately rival the 90,000 who died from toxic gases in World War I.
            In the meantime, Iran has struggled to tend to victims. Sa’di has had 8 surgeries to transplant or repair both corneas, but still has to hold his watch to his face, and sunlight is painful. He takes multiple medications to help breathe, but has a hacking cough. He does not work — the state gives him disability allowance — although he volunteers as an occasional docent at the Tehran Peace Museum to tell his story.
            In Tehran, chemical weapons victims often end up at Sasan Hospital, a grim facility that had been the American Hospital of Tehran before the 1979 revolution. Abolfazl Afazali is one of 22 patients struggling for life at Sasan when I visit in December. “One of my wishes,” he says, “is to be able to take a deep breath.”
            U.S. sanctions have complicated treatment, Iranian doctors say. Humanitarian goods are technically exempt, but international banks have often been unwilling to conduct financial transactions with Iran, even when legal, for fear of repercussions.
            Ahmad Zangiabadi represented Iranian victims at the 2013 conference of the Organization for the Prohibition of Chemical Weapons, which won the Nobel Peace Prize last year. He is no longer mobile, however. He sleeps sitting upright on the floor of his small apartment because the exertion of lying down and getting up is too much for his lungs. He is kept alive on an Airsep New Life Alert oxygen machine, which pushes oxygen into his lungs and makes a thudding sound with every breath. But he has had increasing trouble getting inhalers made by Spiriva and Glaxo Smith Kline. “Life has become a prison the past four months,” he says.
            The lingering impact of a war that ended in a 1988 truce, at a cost of an estimated 1 million Iranian and Iraqi casualties, still defines Iran’s worldview. It has been as important as economic sanctions in pushing Tehran to the negotiating table with the world’s six major powers on its nuclear program. As a result of the war, Iran suffers from “strategic loneliness,” explained Nasser Hadian, a University of Tehran political scientist.
            The primary lesson learned, he said, was that Iran had no allies even when it was a victim of weapons banned since World War I by international norms.Tehran felt a sense of isolation and betrayal after the United Nations verified Iraq’s repeated use chemical weapons, but the outside world still almost unanimously sided with Saddam Hussein. Iran’s neighbors aided him. Europeans and Russians sold him arms.
            The United States was complicit too. Washington provided Baghdad with intelligence on Iran’s equipment and troops strengths to help Iraq retake the Fao Peninsula in 1988. Iraq made widespread use of chemical weapons to win it back.
            The final tally of the war may still not be known for years, Khateri says. “Most of the men exposed to chemical weapons were not registered casualties at the time,” he says. “So almost every day there are new cases — 30 years after the war.”
 
This article is reposted from Time magazine.
 
Photo credit: Sajed.ir via Wikimedia Commons
 

 

The Elders in Tehran: To Advance Dialogue

            On January 27, the independent group of global leaders called The Elders began a three-day visit to Iran to “encourage and advance the new spirit of openness and dialogue between Iran and the international community.” The delegation, led by former U.N. Secretary General Kofi Annan, stressed the need to “rebuild trust and mutual respect in the region and further afield.”
            The other members of the delegation included Martti Ahtisaari (former President of Finland and Nobel Peace Laureate), Desmond Tutu (Archbishop Emeritus of Cape Town and Nobel Peace Laureate) and Ernesto Zedillo (former President of Mexico). Nelson Mandela brought The Elders together in 2007. The following is the full text of their statement read by Annan.

 

Statement to the press by Kofi Annan, Chair of The Elders
 
            This is the first visit of The Elders as a group to Iran. However, several of us have visited Iran before individually and know your wonderful country well.
            We have had very good discussions today, first with Ayatollah Rafsanjani and now with the Foreign Minister, Dr Zarif. These were very useful and in-depth discussions.
            The Elders are a group of independent leaders, brought together by the late Nelson Mandela in 2007.
            Sadly Mr Mandela passed away in December and we are even more determined to carry on the mission and the charge he gave us. He told us to speak truth to power, particularly on behalf of the weak, poor and voiceless.
            Since our founding, we have worked to help heal wounds and bring lasting peace in several parts of the world including Sudan and South Sudan, the Korean Peninsula, Kenya, Israel-Palestine.
            Our purpose in coming here is to meet the senior leadership and hear from a range of opinions about current developments, in particular those affecting this region.
            All of us, including our Iranian hosts, are deeply concerned about the tragic situation in Syria today. We must all do our best to help reduce suffering and put the interest of the people of Syria to the fore. We must do everything we can to end the nightmare that Syrian men, women and children are going through today.
            We are just at the start of our visit – we still have two days in Iran during which we will meet a wide range of leading Iranian personalities.
            We look forward to hearing their suggestions about what The Elders may do to help in the region and internationally regarding the tensions we see today.
            As President Rouhani said to the UN General Assembly in September, that alongside widespread fears in the world today, and I quote:
            “There are new hopes; the hope of universal acceptance by the people and the elite all across the globe of ‘yes to peace and no to war’; and the hope of preference of dialogue over conflict and moderation over extremism.”
            We believe there has been a number of recent positive developments, most importantly the interim nuclear agreement, signed in Geneva last November. These efforts now need to be sustained to achieve final agreement.
            In this regard, we must rebuild trust and mutual respect in the region and further afield. This is not an easy task. It will need patience and perseverance.
            Let me conclude by saying that, all around the world today, people are looking for better governance, looking to have a say in how they are governed. Such strong and democratic, healthy societies are built on three pillars:
            First, peace and stability; second, development; and, third, the rule of law and human rights.
            For there can be no long-term development without peace and stability, and there can be no long term stability without development; both have to be rooted in the rule of law and respect for human rights.
            So we have a lot to do, individually and collectively, to make our world a more peaceful and better place, and try to end all the conflict around us.
 
 

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