China leader warns Iran not to make nuclear arms

WSJ — Prime Minister Wen Jiabao wrapped up a six-day Middle East tour this week with stronger-than-usual criticism of Iran’s defiance on its nuclear program, and with multibillion-dollar oil deals that would seem to signal less reliance on Tehran for China’s growing energy needs.

Mr. Wen’s criticism of Iran was well received by his Persian Gulf hosts, who urgently want to contain Iran’s regional power and nuclear program. As the United States raises pressure on China and other Asian oil importers to curtail purchases from Iran, Saudi Arabia — China’s No. 1 supplier — and some other gulf states have offered to expand production to make up for any gaps.

But throughout his visit, Mr. Wen repeated that China’s business deals with Iran — its No. 3 supplier — were separate from diplomatic questions and that sanctions threatened global trade more than any individual nation. Analysts said the deals, arranged long before the visit, were not aimed at reducing Chinese reliance on Iranian oil but at broadening China’s oil supplies.

The arrangements included a plan by China’s Sinopec Group to build a $10 billion, 400,000-barrel-a-day refinery on the Saudis’ Red Sea coast. While Mr. Wen was in Qatar, the China National Petroleum Corporation unveiled plans to build a refinery at Taizhou, on China’s Pacific coast, in a venture with Qatar Petroleum International and Royal Dutch Shell.

Mr. Wen’s comments on Iran were unusually pointed for Chinese diplomacy. In Doha, Qatar’s capital, he said China “adamantly opposes Iran developing and possessing nuclear weapons.”

He also explicitly warned Iran not to close the Strait of Hormuz, the Persian Gulf bottleneck through which roughly a fifth of the crude oil traded worldwide passes, saying that such action would be regarded as aggression against most of the world’s nations. Iran had earlier threatened to shut down the strait should the United States strengthen sanctions against Tehran.

Michal Meidan, a China analyst at the Eurasia Group in London, said that the message from China was clear: “We do not support the Iranian nuclear program — but business is business.”

Western nations suspect that Iran is working toward building a nuclear weapon, while Iran insists its program is peaceful.

Ms. Meidan said the Taizhou refinery would help China establish itself as a long-term customer for Qatari oil. And the Red Sea refinery, as a job-creating venture for the Saudis, builds good will in that nation.

The United States introduced new restrictions against China during Mr. Wen’s trip. A Chinese oil-importing company, Zhuhai Zhenrong, was barred from United States-based activity with Iran’s central bank based on its finances. Ms. Meidan noted that the sanction was essentially toothless because Zhuhai has no such dealings subject to American sanctions.