To overcome rising hurdles erected by Washington for Iran to conduct dollar-denominated transactions, Beijing and Tehran resorted to barter trade. In July 2011 they signed several agreements, committing Chinese corporations to invest in Iranian infrastructure projects, with Tehran agreeing to export chrome ore to China.
In pursuit of energy security, China's leaders decided more than a decade ago to reduce the proportion of its oil imports carried by tanker because of the vulnerability of shipping lanes from the Persian Gulf and East Africa to its ports.
At present among China's top four oil suppliers - Saudi Arabia, Angola, Iran and Russia - only Russia is supplying nearly 400,000 barrels per day to China by overland pipeline. Of the remaining three, only Iran offers potential of overland pipelines.
A gas pipeline from Xinjiang province of China running through the Central Asian republics to Turkmenistan - already linked by gas pipeline to eastern Iran - was commissioned in December 2009. Two months earlier, in a meeting with Iran's first vice-president in Beijing, Wen referred to deepening cooperation in trade and energy between the two nations, adding that China attached importance to "close coordination in international affairs" with Tehran
Wen's statement reflected the consensus among a network of Chinese think tanks that Iran is a rising power in the Middle East, gaining influence at the expense of America. Addressing the Fourth China-Arab Business Conference in Sharjah, United Arab Emirates, Wen pointed out that the trade between China and the Arab world registered record figures in 2011 despite political turbulence.
China had good relations with oil-rich Libya under Muammar Gaddafi. Along with Russia, it was angered by NATO's interpretation of the UN Security Council resolution in March, to protect civilians, by siding with anti-Gaddafi forces in the civil war. Within three months of Gaddafi's downfall, Beijing bought 67,000 barrels per day from the new regime.
During Wen's tour, Sinopec sealed an $8.5 billion deal with Saudi Aramco for a joint-venture oil refinery and signed a memorandum of understanding with Saudi Arabian Basic Industries Corporation to build a petrochemical plant in Tianjin, China. Saudi Arabia supplies almost twice as much petroleum to China as Iran. Beijing remains wedded to its traditional policy of non-intervention into the domestic affairs of other countries. Along with Russia, it vetoed the Security Council resolution on Syria in October 2011 calling for sanctions against the Assad regime for violent repression of protestors. Wen welcomed the Arab League's mediation efforts to defuse the crisis and appealed to the international community to play a constructive role.
He did the same when alluding to Iran, arguing that in view of "the instabilities and complexity in the region," the easing of tensions is "in the interests of all relevant parties." At the same time he declared: "China supports nuclear non-proliferation, and would be against Iran should it be developing or possessing a nuclear weapon." Given that China has been a signatory to the 1970 nuclear Non-Proliferation Treaty since 1992, Wen's statement merely reiterated a long-held policy.
As a rising global power, China favors the region's status quo, gambling it can continue to fulfill its growing hydrocarbon needs from the Middle East, acquiring a larger footprint there while spurning the West's pressure to join its anti-Iran drive.
