Wednesday, March 14, 2012

China: Tehran’s Reprieve?

Summary

The latest chapter in the Iranian nuclear saga contains some signs that coordinated unilateral sanctions from the United States and the European Union are actually working. But, will China’s reluctance to jump on board provide the Iranian regime with the trapdoor that it needs to escape the noose and hang onto power?

Analysis

While the latest round of sanctions has still fallen short of its intended goal of forcing Iran to renounce its uranium enrichment activities, it has succeeded in applying tangible economic pressure on the beleaguered regime in Tehran. The rial has lost 60 percent of its value against the dollar since the US and EU implemented their extraordinary sanctions against Iran’s financial industry. Iran’s oil output has also fallen by around 500,000 barrels in the past few months. Yet, Iran can still find buyers for its unrefined petroleum products, and it will continue to do so thanks in large part to the actions of the Chinese government.

Beijing doesn’t support the turning of the economic screw on Iran, and this lack of support is the very reason why sanctions are of the creative unilateral sort and not those that are imposed by the UN Security Council; a body that carries the legitimizing weight of international consensus. Beijing’s rejection of Western-led international pressure on Iran stems from the simple fact that it needs Iranian energy exports. Indeed, China is Iran’s biggest customer. Read More