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Factbox: Ties binding China and Iran
May 18, 2010 / 5:46 AM / 7 years ago

Factbox: Ties binding China and Iran

BEIJING (Reuters) - China has welcomed a nuclear fuel swap plan that Iran announced after talks with Brazil and Turkey, urging negotiations over the deepening dispute with Tehran.

Iran agreed with Brazil and Turkey on Monday to send some of its uranium abroad, reviving a fuel swap plan drafted by the United Nations with the aim of keeping its nuclear activities in check. But Iran made clear it had no intention of suspending domestic enrichment the West suspects is aimed at making bombs.

Here are key facts about ties between China and Iran.

IRAN A BIG OIL SUPPLIER, BUT NOT THE BIGGEST

Iran is a major supplier of crude oil to China, the world’s second-biggest consumer of oil after the United States. The U.S. has urged China to tap other suppliers.

In 2009, Iran was the third-biggest foreign source of crude oil to China, supplying 23.1 million metric tonnes, or 11.4 percent of China’s total crude imports. The biggest foreign crude sources for China were Angola and the top supplier Saudi Arabia.

CHINA‘S ENERGY, TRADE STAKES IN IRAN

Trade between China and Iran has grown quickly, dominated by Iran’s energy exports. In 2005, bilateral trade was worth $10.1 billion. In 2009, it was worth $21.2 billion, though that was a fall of 23.6 percent from 2008, reflecting the financial crisis and the falling dollar value of oil.

In the first three months of 2010, bilateral trade grew by 47.4 percent compared with the same months last year, and China’s imports from and exports to Iran both grew strongly.

The main Chinese exports to Iran include machinery and equipment, motor vehicles, textiles and consumer goods.

China is an investor in Iranian oil and gas, and Chinese state-owned energy conglomerates have been exploring for new fields there, with an eye to expanding their stake.

China’s top energy group, CNPC, this year clinched a deal to develop phase 11 of Iran’s South Pars gas project and expand its operations in Iran.

In the oil sector, CNPC is already in a deal to develop Iran’s North Azadegan field into a 120,000-barrel per day field at a cost of at least $2 billion.

China’s Sinopec Group reached a $2 billion deal to develop Iran’s Yadavaran oil field in December 2007.

Industry sources have said China has also been selling gasoline to Iran, which lacks refining capacity to meet domestic demand. Chinese customs statistics do not record any recent shipments, which may go through intermediaries.

Chinese state company Chinaoil recently sold about 600,000 barrels of gasoline to Iran, despite proposals before the U.S. Congress for unilateral sanctions on fuel suppliers to Iran that have frightened off other companies.

CHINA A DIPLOMATIC PARTNER

China has kept close bilateral ties with Iran, but also backed past U.N. Security Council resolutions criticizing Tehran’s stance on nuclear issues.

Western powers criticized the disputed election of June 2009 that kept President Mahmoud Ahmadinejad in power and condemned subsequent violence and arrests directed at anti-government protests. China did not openly criticize the Iranian government.

In October last year, Chinese Premier Wen Jiabao told visiting First Vice President Mohammad Reza Rahimi that his government wanted to “maintain high-level contacts” with Tehran.

CHINA WORRIED BY NUCLEAR PLANS, BUT WANTS TALK, NOT SANCTIONS

China’s support for Iran is not unreserved. Beijing wants to cast itself as a supporter of nuclear non-proliferation and has voted for past U.N. Security Council resolutions pressuring Iran.

But Chinese diplomats often say sanctions are not the “fundamental solution” to the Iran nuclear dispute, and they want more attention given to negotiations.

Beijing has followed a pattern of approving U.N. decisions critical of Tehran, but resisting sanctions that could hurt its energy and economic ties with Iran.

In July 2006, China backed U.N. Security Council Resolution 1696 that threatened sanctions on Iran, and in December of the same year it supported Resolution 1737, which imposed sanctions on Iranian nuclear imports and exports.

It supported two further resolutions, one in 2007 which broadened the sanctions to cover a ban on Iranian arms exports, and another in 2008 which criticized Iran for refusing to suspend uranium enrichment.

The five permanent members of the U.N. Security Council as well as Germany are negotiating a proposed new resolution about Iran that could impose fresh sanctions.

Iran is likely to be discussed next week in Beijing, when senior Chinese and U.S. officials gather for a strategic dialogue. U.S. Secretary of State Hillary Clinton will attend.

(Sources: Reuters; Chinese Monthly Exports & Imports; U.S. Energy Information Administration www.eia.doe.gov; Chinese Ministry of Commerce www.mofcom.gov.cn; United Nations www.un.org/; John Garver, Flynt Leverett and Hillary Mann Leverett, "Moving (Slightly) Closer to Iran: China's Shifting Calculus for Managing Its 'Persian Gulf Dilemma")

Reporting by Chris Buckley; Editing by Nick Macfie

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