Kathmandu, 29 August: Analysts say that although the United States is preparing to put further pressure on Iran’s economy, it will be difficult to effectively isolate Tehran economically without China’s cooperation.
About six months after the war began in the Middle East, Washington is preparing to expand sanctions against Iran. U.S. officials have also warned that countries and entities supporting Iran could face action. U.S. Treasury Secretary Scott Bessent has urged China to cooperate with the American campaign.
However, China has defended its cooperation with Tehran and made clear that it will protect its economic and strategic interests. With Chinese President Xi Jinping reportedly preparing to visit the U.S. capital in September, the Iran issue could add further tensions to China-U.S. relations.
According to political scientist Dylan Loh of Nanyang Technological University in Singapore, the United States will need China’s cooperation to completely isolate Iran economically. China is a major buyer of Iranian oil, and a large portion of trade between the two countries is conducted in China’s currency, the renminbi, which can help limit the impact of U.S. sanctions.
Before the war, Iran exported millions of barrels of oil a day, with a large share going to China. Nino Lezhava, a fellow at the Center for European Policy Analysis in Washington, said oil is the main pillar of Iran’s economy. Although China has reduced its purchases of Iranian oil, the revenue generated from those sales remains important for Iran, said Professor Sun Degang of Fudan University.
Lezhava said the impact of U.S. sanctions could be weakened if China continues to maintain trade and alternative payment systems with Iran. The United States has also signaled that Chinese banks conducting transactions with Iran could face sanctions. Although several Chinese entities were sanctioned this week for allegedly helping Iran obtain “critical technology,” major Chinese financial institutions have not yet faced broad punitive measures.
Professor Sun said the United States cannot expect cooperation from Beijing against Iran while continuously imposing sanctions on Chinese companies. China’s Foreign Ministry has also made clear that its cooperation with Iran falls within the framework of international law and that outside interference is unacceptable.
China is also facing economic consequences from disruptions in the Strait of Hormuz. Analysts say that with China already under economic pressure because of weak domestic consumption, completely halting trade with Iran could create additional problems. According to Associate Professor Chong Ja Ian of the National University of Singapore, China has little reason to help enforce U.S. sanctions.
Professor Lim Tai Wei of Soka University in Japan and an East Asia specialist said Washington may need to offer China sufficient incentives to participate in an effective global campaign against Iran. According to fellow Lezhava, China is likely to join the U.S. campaign only if the costs of supporting Iran become significantly greater than the strategic and economic benefits it gains from doing so.
— RSS/AFP
