With Trump visit coming up, China hedges its bets on helping Iran
CBC
China’s latest blueprint for driving growth in its economy was largely written before the U.S. and Israel instigated the most far-reaching war in the Middle East in decades.
But when Chinese Premier Li Qiang stood up in Beijing’s Great Hall of the People on Thursday to deliver the opening address of the so-called Two Sessions, some last-minute updates appeared evident.
While emphasizing domestic resilience in the world's second-largest economy and referencing ongoing trade frictions with the United States, Li also noted the "external economic environment" had suddenly become even more "complex."
By "complex" Qiang could mean that the leadership in Iran, a strategic ally and key supplier of oil, has been decapitated and that the country is under withering bombardment from two of the world’s most advanced militaries.
For several years prior to the U.S. and Israeli attacks, China provided Iran with crucial economic and political lifelines.
China bought Iranian oil despite the risks of Western sanctions. It also supplied Iran with key components for its ballistic missile and drone programs. And in 2021, China and Iran signed a long-term economic co-operation agreement.
Taken together, China’s help allowed Iran to continue to field a formidable military while avoiding the full impact of its isolation from the global economy.
After the bombs started falling, Chinese officials condemned the assassination of Supreme Leader Ayatollah Ali Khamenei, lambasted the U.S. for its "blatant military strikes" and dispatched a special envoy, Zhai Jun, to try to de-escalate the war.
But it’s what China isn't doing that may be more notable.
Despite being the top customer for Iranian oil — 90 per cent of its output is sold to China — and the largest commercial trader with the Persian Gulf nations now sheltering from Iranian missiles and drone attacks, President Xi Jinping has given no indication China plans to be much more than a bystander in this conflict.
The latest economic plan emphasizing Chinese resilience and self-reliance aims for about five per cent annual GDP growth and aspires to dominate emerging fields of robotics, renewables and artificial intelligence. With this plan, the country’s leadership appears to have calculated it can withstand any short-term economic shocks from an oil crisis — and if they do occur, whatever comes to pass will not significantly affect its key economic goals.
Furthermore, positioning the country as a safe haven from the war reinforces China’s emerging narrative as a predictable, reliable trade partner, say analysts.
"China has been preparing for this for a long time," said Alex Zheng, a consultant with China Macro Group in Shanghai who focuses on China's political economy.
China has an economic "buffer," he says, in that it has been building up strategic reserves of oil that will cushion the country from immediate price spikes. Zheng says it can also turn to Russia to offset any oil disruptions from Iran or the Gulf.
