Follow-up to my post #65148(*):
The China connection
Saudi Arabia, Iraq and Iran stand one-two-three in global estimated oil and natural gas reserves. The Iraq invasion, which unsettled world energy politics in unpredictable ways, set in motion portentous activities in China, an undisputed future US economic competitor. China's leaders, in search of energy sources for their burgeoning economy long before the American invasion of Iraq, had already in 1997 negotiated a US$1.3 billion contract with Saddam to develop the al-Ahdab oil field in central Iraq.
By 2001, they were negotiating for rights to develop the much larger Halfayah field. Between them, the two fields might have accounted for almost 400,000 barrels per day, or 13% of China's oil consumption in 2003. However, like Iraq's other oil customers (including Russia, Germany and France), China was prevented from activating these deals by the UN sanctions then in place, which prohibited all Iraqi oil exports except for emergency sales authorized under the UN's oil-for-food program. Ironically, therefore, China and other potential oil customers had a great stake in the renewed UN inspections that were interrupted by the American invasion. A finding of no weapons of mass destruction might have allowed for sanctions to be lifted and the lucrative oil deals activated.
When "regime change" in Iraq left the Bush administration in charge in Baghdad, its newly implanted Coalition Provisional Authority declared all pre-existing contracts and promises null and void, wiping out the Chinese stake in that country's oil fields. As Peter S Goodman reported in the Washington Post, this prompted "Beijing to intensify its search for new sources" of oil and natural gas elsewhere. That burst of activity led, in the next two years, to new import agreements with 15 countries. One of the most important of these was a $70-billion contract to import Iranian oil, negotiated only after it became clear that a US military threat was no longer imminent.
This agreement (Iran's largest since 1996) severely undermined, according to Goodman, "efforts by the United States and Europe to isolate Tehran and force it to give up plans for nuclear weapons". On this point, an adviser to the Chinese government told Goodman, "Whether Iran would have nuclear weapons or not is not our business. America cares, but Iran is not our neighbor. Anyone who helps China with energy is a friend." This suggested that China might be willing to use its UN veto to protect its new ally from any attempt by the US or the Europeans to impose UN sanctions designed to frustrate its nuclear designs, an impression reinforced in November of 2004, when Chinese Foreign Minister Li Zhaoxing told then-Iranian president Mohammed Khatami that "Beijing would indeed consider vetoing any American effort to sanction Iran at the Security Council."
The long-term oil relationship between China and Iran, sparked in part by the American occupation of neighboring Iraq, would soon be complemented by a host of other economic ties, including an $836-million contract for China to build the first stage of the Tehran subway system, an expanding Chinese auto manufacturing presence in Iran and negotiations around a host of other transportation and energy projects. In 2004, China sought to deepen political ties between the two countries by linking Iran to the Shanghai Cooperative Organization (SCO), a political alliance composed of China, Russia, Uzbekistan, Tajikistan, Kazakhstan and Kyrgyzstan. China and Russia soon began shipping Iran advanced missile systems, a decision that generated angry protests from the Bush administration. According to Asia Times Online correspondent Jephraim P Gundzik (The US and that 'other' axis, Jun 9), these protests made good sense, since the systems shipped were a direct threat to US military operations in the Middle East:
Iran can target US troop positions throughout the Middle East and strike US Navy ships. Iran can also use its weapons to blockade the Straits of Hormuz through which one-third of the world's traded oil is shipped. With the help of Beijing and Moscow, Tehran is becoming an increasingly unappealing military target for the US.
At the June meeting of the SCO, after guest Iran was invited into full membership, the group called for the withdrawal of US troops from member states, and particularly from the large base in Uzbekistan that was a key staging area for American troops in the Afghanistan war. The SCO thus became the first international body of any sort to call for a rollback of US bases anywhere in the world. A month later, Uzbekistan made the demand on its own behalf. The Associated Press noted, "The alliance's move appeared to be an attempt to push the United States out of a region that Moscow regards as historically part of its sphere of influence and in which China seeks a dominant role because of its extensive energy resources."
Not long afterward, outgoing Iranian president Mohammad Khatami ended his first summit conference with Chinese President Jiang Zemin with a joint statement opposing "interference in the internal affairs of other countries by any country under the pretext of human rights", a declaration reported by the Iran Press Service to be a "direct criticism of Washington".
In other words, the war in Iraq - and the resistance that it triggered - played a key role in creating a potentially powerful alliance between Iran and China.
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atimes.com
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