China State Paper Warns of Iran War After IAEA Report

IAEA report is likely to increase pressure on China to curb its ties with Iran; overall trade between the two countries is valued at $32.9 billion.

Confrontation between Iran and the West over Iran's nuclear plans is reaching "white hot" levels that could trigger a military attack, a Chinese state newspaper said, after a UN report that is likely to increase pressure on China to curb ties with Iran.

The overseas edition of the People's Daily spelled out the fears facing Chinese policy-makers, caught between their demand for Iranian oil and worries that the U.S. and its allies will demand harsher sanctions against Iran, even risk military action, after the International Atomic Energy Agency concluded Iran appears to have worked on designing an atomic weapon.

iaea - AP - June 12 2011

"It is clear that contention between the various sides over the Iranian nuclear issue has reached white hot levels and could even be on the precipice of a showdown," said a front-page commentary in the newspaper on Wednesday.

If Iran refuses to back down in the face of growing U.S. conviction that it is developing nuclear weapons, "the risks of war will grow," said the paper, noting reports that Israel could consider a military strike on Iranian nuclear sites.

"The situation is still developing and evolving, and the uncertainties mean a range of options remains open. But from their subjective viewpoint, sparing no means to get rid of
Iran's nuclear ambitions suits the strategic interests of the United States, Israel and European countries," said the paper.

The People's Daily is the top newspaper of China's ruling Communist Party and broadly reflects official thinking. A commentary in the small-circulation overseas edition of the paper falls short of a formal government response, but it echoes the anxieties weighing on China after the latest UN nuclear agency report.

Although the prospect of armed conflict over Iran remains slim, China faces difficult choices, especially as it tries to also keep steady ties with the U.S., which is likely to
introduce new unilateral sanctions on Iran.

"The onus will really be on China, as the only country whose economic relations with Iran has grown," Suzanne Maloney an expert on Iran at the Brookings Institution, a think tank in
Washington D.C., said in a telephone interview.

Iran is China's third-largest crude oil supplier, shipping 20.3 million tons in the first nine months of the year, up by almost a third on the same time last year, according to Chinese
customs data. Overall trade between the two countries grew to $32.9 billion in value, up by 58 percent.

"The sense is that the only heavy-hitter in on-going economic interests in Iran is China," said Maloney.

Over the past year or more, China has quietly stalled on oil and gas investments in Iran, seeking to ward off stricter unilateral sanctions from Washington while preserving a foothold in Iran. But that implicit deal will come under growing pressure, especially from Congress, said Maloney.

"They've had a compromise for the past eighteen months of a go-slow in investment. But it's difficult to see how that bargain can hold in the wake of the latest revelations," she

Citing what it called "credible" information from member states and elsewhere, the IAEA said Iran appears to have carried out activities applicable to developing nuclear weapons, such as high explosives testing and developing a trigger that could be used for an atomic bomb.

China has kept close bilateral ties with Iran, but also backed past UN Security Council resolutions criticizing Iran's position on nuclear issues and authorizing limited sanctions.

But China has repeatedly resisted Western proposals for sanctions that could seriously curtail its energy and economic ties with Iran, a major supplier of crude. As one of the
Security Council's five permanent members, China holds the power to veto any resolutions.

China has also denounced the United States and European Union for imposing their own separate sanctions on Iran, and said the U.S. and the EU should not take steps reaching beyond the UN resolutions.

This week and last, China urged Iran to show flexibility over its nuclear program and warned that the use of force to resolve the issue was the last thing the Middle East needed at the moment.