Title: Sino-Iranian Foreign Minister Meeting
Description: 3q2012; Tehran
Iran (Dax) - July 30, 2012 02:38 AM (GMT)
Foreign Minister Salehi lauded the progress made in expanding all manner of Sino-Persian relations in the last decade, a point that was exemplified in ever-expanding bilateral trade.
Iranian Foreign Minister Ali Akbar Salehi had meticulously prepared the foreign ministry building in Tehran for the arrival of his special guest, Yang Jiechi, the Chinese Minister of Foreign Affairs. No detail would go unnoticed in preparing for the Chinese minister's arrival, and even the aides that would serve the tea, arrange Mr. Yang's hotel room, and take his jacket upon arrival had been vetted for their flawless Mandarin and even comprehension of the distinct vernacular of Wu Chinese native to Mr. Yang's hometown, Shanghai.
The People's Republic was considered to be The Islamic Republic's most important ally, ranking with Russia in terms of global power allies of Tehran, and even overshadowing Turkey, India, and Syria - the country's important regional partners - by a significant degree. The trade relations between the two countries, of course, spoke for themselves: bilateral Sino-Persian trade had expanded 1500% in the decade between 2001 and 2011, and by 2012 went well beyond hydrocarbons like oil and gas. While Salehi was certain that those topics would dominate the discussion, there was much more for the two men to discuss.
As the Chinese Minister arrived, the two men held a press conference in which Mr. Salehi showered Beijing with compliments, praise, and rhetoric of solidarity and brotherhood. Mr. Yang would receive the diplomatic equivalent to red carpet treatment before being escorted to the private chambers, where the two men would discuss official business. He was curious as to what Mr. Yang had in mind to discuss.
China (Schwerpunkt) - July 30, 2012 04:52 AM (GMT)
Yang Jiechi arrived in Tehran and went through all the motions with the practiced efficiency of an old diplomat. Which he was; this would be his last great tour, his last hurrah, before retiring. That made it doubly important to take home a 'win.' And so, when the opportunity to get down to the issues was presented, he immediately leapt upon the chance. He had a legacy to cement, dammit.
"I suppose we could start with just about anything," Yang began, "but I'd like to start with the elephant in the room. Recently, your Supreme Leader announced that Iran would, to borrow a phrase from the Americans, stay the course. That is quite a bold statement given the pressure recent sanctions have placed upon you. Beijing stands in awe of your commitment to your principles," Yang added, completely straight-faced.
"That said, I may be able to propose an alternative. Two years ago, the 17th Central Committee approved a modest investment in alternative nuclear fuel sources. The majority of this funding was centered around thorium-based nuclear energy. They have revisited this energy source and, as of a few weeks ago, approved a substantially increased grant to facilitate research into this field. This will allow China, over the course of the next two years, to become the world leader in thorium-based nuclear energy.
"Iran is a logical recipient of this technology. It is unlikely the IAEA will object too strenuously; thorium is exceptionally difficult to weaponize and is considerably safer to operate. We are willing to work with you to get this revised program approved -- we will even provide some of the funding to jump-start this program. But I do believe it is obvious that this will require the closure of Bushehr and all other nuclear facilities you have publicly acknowledged. And I am certain that the IAEA will require extensive and unannounced inspections of the facility before they ever allow it.
"This is, in our eyes, the last real chance for you to minimize or negate outright the sanctions against you. It won't be free, it won't be easy, and it will require concessions on your part. We're willing to help you if that's what you want to do -- but, if you're not interested in this, if you feel you must decline for whatever reason, I am perfectly happy to move the discussion to oil and natural gas."
Iran (Dax) - July 31, 2012 03:45 AM (GMT)
Salehi's spirits dropped almost immediately as the Chinese diplomat continued to speak, and his shoulders had visibly slumped by the end of Mr. Yang's opening litany. The Iranian furrowed his brows (he hoped it looked like deep thought) as he stared intently down at the program for what was billed to be the most important conference of the year for Mr. Salehi.
The Chinese foreign minister had done two things wrong. In his opening, Mr. Yang praised The Islamic Republic's commitment to its principles, coming ever-so-shy of expressing the kind of solidarity that Tehran had come to enjoy from their counterparts in Beijing. Yet, immediately thereafter, Mr. Yang outlined a proposal which asked Tehran precisely to compromise on its principles, a cynically ironic about-face that was well intentioned - and Mr. Salehi held no doubt in his mind that the proposal was indeed well-intentioned - and yet managed to almost comically miscatagorize the entire national character of both the Islamic Republic and the Iranian people.
Iran's defiance of the west; its stubborn refusal to bend to submission; the dignified manner in which it absorbed round after round of international sanctions, proud in their unwavering faith that their sacrifice was not in vain; the loss of their reputation, their possessions, their diplomatic privilege, and in more than one instance the loss of their lives, was not about mere energy production. The Islamic Republic sat on the second largest reserve of natural gas on the planet. It's oil reserves were not far behind. Iran did not need thorium. Mr. Yang presented his alternative proposal in terms of being costly, being difficult, and requiring concessions. This, incredulously, seemed to ignore the fact that the current nuclear energy program was both costly and difficult. Crucially, however, it did not require concessions; not on the magnitude that submission would entail. Not even close.
No, this was not about energy. The only thing that the Iranian people had in the world was energy. And time. And as far as they were concerned, they were going to have a nuclear program. Not because it was permitted by the United States and the west, but because it was their sovereign right, codified clear-as-day under international law. No, the Islamic Republic was going to have a nuclear program in spite of the west. Iran was going to prove, beyond doubt, that their sovereignty was unquestionable, that they did not need the blessing of the west, nor could the west prevent it by any conceivable means even if they wanted to. Failing that, Iran would make the act of stopping it by force a nightmare for all involved.
If Mr. Salehi was disappointed with Mr. Yang's opening, the Chinese diplomat's finish was nothing short of depressing. Should he refuse -- should he "feel he must decline", to use the Chinese man's words -- then the Communist Party loyalist was happy to move to discussions of oil and gas; an illuminating dichotomy. Mr. Salehi was interested in none of these matters. And yet, Mr. Yang had traveled over a thousand miles to Tehran.
He sighed, pausing for the illusion that he might be seriously considering the offer. "Unfortunately, I am afraid that thorium, as intriguing as the process does sound - I admit to not being substantially familiar with the matter - is not a suitable replacement for an indigenous nuclear program. Of course, President Ahmadinejad would always be open to alternative energy investment, as a matter of investing in future energy sources, and Iran is always eager to work more closely with our Chinese allies in the fields of science, technology, and development. In that spirit I would be interested in exploring these opportunities further. Thorium does not appear suitable to our needs in lieu of a nuclear energy program, but all energy sources can and may be complimentary."
China (Schwerpunkt) - July 31, 2012 06:43 AM (GMT)
Yang listened to the Iranian's reply. The man flat out refused the Chinese offer, but then that was exactly what Yang wanted -- he did not want to be known as the man who had just committed billions of dollars to the pariah state of Iran. He was here to turn a profit, not get hosed on financial negotiations. But there was more to the offer than simply making the offer to appear like a good neighbor. That was there, certainly; China would always have the opportunity down the road to remind Iran or inform the world that it was China that had gone out on a limb to offer an alternative to the highly controversial Iranian nuclear program. That was an ace kept carefully up the sleeve, one you did not play until it was absolutely necessary.
Another reason for the offer was because China had to export this new technology. Just throwing money at the program wouldn't work; China needed foreign buyers. Though Tehran had refused now, it might later opt for the program -- and without China's extensive financial assistance. Iran's refusal of the program would result in an immediate setback of very minor proportions, yes, but it did sow the seeds for a future harvest. An unlikely harvest, true, but a potential harvest nonetheless; and all it cost Beijing was a minor faux pas.
But neither of those reasons were terribly important. No, Beijing didn't really care; if it had to, it would've financed the program and then used that to further increase China's influence in the region and world. And Beijing would not have cared one iota about the ten billion dollars it would've cost to do this. No, what Beijing wanted was something else: Beijing wanted confirmation that Iran still had a nuclear weapons program. Thorium was exceptionally difficult to weaponize; uranium was not. The uranium Iran needed for its VVER reactor could be easily siphoned off into a weapons program, but no such option existed for a thorium-based reactor. According to China's reckoning, the only logical reason to refuse this offer was simple: Iran still had a nuclear weapons program.
Yang had a clear answer to take back to the Central Committee. They would be both relieved and alarmed at the same time, he did not doubt, but then there would've been a great deal of handwringing if he took back the opposite answer. So he allowed himself an inward smile and maintained his outward diplomatic facade.
"I am not entirely pleased to hear that," Yang replied, his lie buried beneath a mountain of diplomatic experience. "Beijing was rather hopeful that we might have had the opportunity to use this thorium program to leverage sanctions away from Iran. If nothing else, allow me to offer research grants for any alternative energy sources you happen to be looking into -- something like a million dollars per year. Hopefully this proves useful in some small way.
"So let us turn our attention to oil and gas. As you know, we buy a rather significant amount of it -- and, as a growing economy, we require ever more fuel. The Europeans, in the midst of an economic crisis, have decided to halve their oil imports from you. I'm here to see to it that the oil they once purchased is now being purchased by China. My only question is this: Euros or dollars? Euros would be quite ironic, don't you think?
"But I wouldn't be happy with just buying oil, obviously. The Central Committee could've sent some junior delegate if that's all we wanted. What we want is simple: we want that oil and we want a discount." Yang leaned back in his chair, allowing that to hang in the air for a moment. Just as the moment stretched -- just before the Persian would've logically concluded that Yang was asking for a discount without offering anything in return -- the Chinese minister continued. "I'm willing to offer a number of things to make that happen. We are not resolutely committed to these options; we are open to proposals from your end, of course. These are merely to..." Yang resisted the urge to conclude with 'tell you how much we're willing to pay' and instead opted for: "... get the proverbial ball rolling.
"I see three options. The first is simple; a gentleman's agreement, more or less. China will block sanctions and, in return, you will offer us a discount. If we decide to abstain, you are free to 'reevaluate' the market price and resume charging us our normal price. The second is a bit more direct: we will provide direct investment in certain sectors of your economy. Your free economic zones, mostly, because we believed in targeted growth. For every five dollars you save us, we'll invest three to four in your economy. A useful trade when you consider the European moves to reduce FDI in Iran, I think. The third option -- the most intriguing option, I think -- involves arms sales. Essentially, we would use shell corporations, political capital, and bribes to create a black market corridor for getting military hardware from China into Iran. Cruise missiles, tanks, spare parts, air defense systems, satellite components, clones of selected Western hardware. Just about anything that can't be traced back to us -- which means anything up to main battle tanks and combat aircraft -- can be delivered to you this way."
Yang half suspected that the Iranian would be nearly offended by the first two options. But it was the third option he expected to snare his counterpart. But he merely sat and waited.
Iran (Dax) - August 4, 2012 06:05 PM (GMT)
[[Careful, Schwer. I haven't laid out the details of Tehran's nuclear program IG yet.]]
A great myth regarding the Islamic Republic was that the Supreme Leader, and indeed all of the Iranian regime, were obsessive, fanatical ideologues whose decisions were primarily based upon a rabid, compulsive dogma of Shi'a Islam's most fundamentalist stripes. It was a perception peddled all-too-furiously by the United States and its allies in an attempt to sow fear and suspicion of Iran in order to support their unrelenting campaign against the Islamic Republic: "The Iranians are unpredictable and extremist! Imagine what they would do with nuclear technology!" While it was certain that some increasingly sidelined elements of the regime could be considered ideologues, assessed objectively, such a narrative in describing the country's official strategy could not be further from the truth.
Any and all illusions Foreign Minister Salehi may have had about the Chinamen's intentions in visiting Tehran were quickly shattered in the opening exchanges of the meeting. If it were to be fairly said that Iran followed a largely pragmatic and, for that reason, fairly predictable foreign policy, then such an approach was ever more critical when dealing with China - perhaps the 21st century's ultimate pragmatists. The question must move away from one of whether China and Iran shared brotherly ideological bonds (by any critical assessment, they didn't) and rather onto what China could potentially do for Iran, and for what price.
"We in Iran certainly appreciate the Chinese offer and their continued engagement in finding a workable solution to the current standoff. Certainly Beijing's contributions to this process have been immeasurable and invaluable. Of course, alternative energy is something that is always of keen interest to us, as it should be to any nation in this increasingly globalized economy. As such, a counter-proposal could see Tehran match Beijing's million dollar per annum alternative energy grant, and suggest that the money be used to fund joint Sino-Iranian ventures and research into the field. I do feel that such an approach would see the money put to significantly better use."
Mr. Salehi was dismayed, though not altogether surprised, to learn that Mr. Yang's primary aim here in Tehran was to negotiate for even lower oil prices for the People's Republic. The imposition of further sanctions, followed by a tightening of Iran's oil exports and the demand for lower prices from China, ostensibly as compensation for the fact that Beijing was one of the few still willing to work with it openly, had become a recurring theme in Iran's oil sector and political discourse. Naturally, it also factored into Tehran's calculations when negotiating with its few remaining allies. Knowing as he did the government's balance sheet, however, and the fall in oil exports since the middle of the year, Mr. Salehi was hardly in a position to refuse.
Or was he? Beijing already purchased Iranian oil well below market value - in gold instead of US dollars, no less - and there wasn't much appetite for further discounts for Chinese firms importing Iranian oil. Of course, there wasn't a whole lot hanging in the balance that would prevent the foreign minister from flatly refusing. With the only other options being an increasingly uncomfortable reliance on American puppets in the Gulf or the one nation China trusted less than the United States -- Russia -- there was little reason to believe that China would reduce it's imports of Iran's oil willingly; Tehran offered Beijing a steady, discounted supply of oil and a guaranteed destination for Chinese exports, minus the ideological tripwires or the possibility of a near-peer competitor -- the best of both worlds.
The Iranian foreign minister could scoff indignantly at Mr. Yang's first two suggestions. Beijing was in no position to further abstain from UN-led measures to further sanction Iran's oil sector, knowing as it did that such sanctions would ultimately work against the People's Republic's own interests. Additionally, Iran was the primary destination for outgoing Chinese FDI, and indeed the country had spent billions in the last five years investing in Iran. While the impending economic slowdown in China was likely to tighten the flow of FDI into Iran, it's unlikely that political will alone could prevent that, reduced oil prices or not. No, Mr. Salehi could dismiss those proposals almost as off-handedly as Beijing could offer them. The third proposal, however, regarding the provision of arms, was intriguing, even if it did not quite hit the mark. The Islamic Republic was hopelessly outmatched in military terms against any of its potential foes: Israel, Saudi Arabia, or the United States. Decks stacked such as they were, there was little point in taking part in an arms race with the west. Iran's deterrence was as good as it was going to get, all things considered, and China offered very little that Iran did not already possess or was incapable of developing itself. The line of thinking, however, was not without merit.
Feeling as though Mr. Yang had overplayed his hand slightly, but not willing to bet future relations on it, Salehi challenged the Chinaman to put his money where his proverbial mouth was. "Iran is open to the possibility of further discounts, provided of course that they are accompanied by a long-term, high-volume contract for supplying China's thirst for energy. However, the offer of mere arms in and of themselves isn't quite enough, I don't think, to satisfy The Supreme Leader's conditions for further discounts to Beijing. Of course, if Beijing were in a position to offer Iran something it truly needed, such negotiations could be seriously examined. What Iran truly needs is not munitions and arms, however, but rather technology. Proposals that follow this line of discussion are of immense interest to Tehran."
China (Schwerpunkt) - August 5, 2012 02:19 AM (GMT)
[Sure, sure. But regardless of what you decide to go with, Beijing's going to remain firmly convinced you have the bomb until the IAEA says you don't.]
Yang nearly laughed at the insinuation that the money be spent to study thorium power. Was one million dollars per year supposed to pay for a test reactor?
"Direct the grant as you will," Yang replied smoothly. "It will not prove sufficient to research a thorium-based nuclear energy venture in any significant manner, but perhaps it will convince you of the value of such a program."
Yang was not exactly impressed by the Iranian's attempt to act as if the slashed exports didn't seriously hurt the Iranian economy. It was a bold facade, to be sure, but a transparent one nonetheless. Not unlike most of China's propositions thus far.
It would have been rather unprofessional to decline the Iranian immediately, which was exactly what Yang wanted to do. If Iran was going to act tough on oil now, he was inclined to let them -- and his successor could visit next year and ask them if they changed their minds. But, for now, he would at least pretend to be intrigued. He owed his host that much.
"My initial response to your request for technology is: perhaps." Yang paused as if in thought. "I certainly cannot say yes or no until you tell me what it is you're looking for. So tell me, my friend: what is it that you value so much more than arms?"
Iran (Dax) - August 7, 2012 07:42 PM (GMT)
Mr. Salehi continued to be dumbfounded by Mr. Yang's consistent references to thorium power. The suggestion of a $2 million annual joint-venture grant for alternative energy research wasn't intended to be limited to thorium (the foreign minister momentarily pondered how many other ways he could express Tehran's utter lack of interest in the subject.) Nonetheless, he let the issue go. It didn't matter one way or the other the specifics of what private Iranian firms did with the money.
The further along the meeting went, the more uncomfortable Ali Salehi became with the tone of the conversation. He had met with Mr. Yang many times in the last few years, and never before had Beijing's position ever been so openly self-interested. Mr. Salehi wasn't naive enough to believe that Beijing was ever interested in supporting The Islamic Republic out of some ideological affinity at the expense of its own interests, but the conversation, the cooperation, and the friendship, it was thought, was legitimate; Sino-Iranian ties were - and had always been mutually beneficial, and Iran's anti-western disposition had made it doubly-so. It was uncharacteristic in the extreme for Mr. Yang to approach the meeting with such an attitude that made it clear that Beijing was merely taking advantage of the Islamic Republic's isolation for its own benefit.
Mr. Salehi suddenly found himself on the defensive, realizing that, apparently, the end of Mr. Yang's tenure as foreign minister had changed the dynamics of the game. It was highly uncomfortable. While Ali had indulged in the tit-for-tat at the conference's opening, he suddenly wasn't just disheartened by the Chinaman's remarks, but immensely suspicious. There was also the news that Beijing was attempting to subtly form a global coalition on Syria - having quietly contacted, at the very least, Turkey - and yet Mr. Salehi learned of it through the grapevine instead of from Mr. Yang himself, indicating that Beijing intended to leave Tehran out of such a coalition. All of this behavior was so highly uncharacteristic of Beijing that Mr. Salehi suddenly questioned what Mr. Yang's motives were; had he and Washington reached detente? Had China agreed to use its relationship with Iran for Washington's interests in exchange for some other concession? Such an instance would explain the sudden suggestion and obsession with thorium-based power, even as China itself was in the process of building dozens of new nuclear reactors. It would also explain the out-of-the-blue shift to encourage an alternative to nuclear power, even as Beijing had been of the most vocal and unwavering supporters of Tehran's right to peaceful nuclear energy.
It was all very disconcerting. As statements came in from India, South Africa, Japan, and Indonesia that there was no intention of decreasing Iranian energy imports, and the ambassador to Madrid having reached an agreement in principle to resume supplies to Spain and potentially the rest of southern Europe, Mr. Salehi made the on-the-spot decision to hedge his bets and see where Mr. Yang took the conversation before making any deals. Beijing would limit its access to Iranian oil at its own peril, so he had room to maneuver.
Mr. Salehi chuckled, "What do we value more than arms. You may or may not know, Mr. Yang, but Tehran does not place a significant amount of value in conventional arms. Iran has been cut off from the arms market for decades, and is outmatched in terms of conventional military power by every potential regional foe. While Iran's military has a capable base of power, Iran does not engage in state warfare. Iran has never initiated a war with anyone, ever. No, Iran does not particularly concern itself with conducting arms races.
"However, we are always looking to expand our technological capability. having to develop our own arms industry after years of sanctions and inaccess to the global arms market. We have done a respectable job by any standards, I would say, turning a nascent technological base into an industry capable of development of increasingly complex systems.
"However, there is a glass ceiling, and we are always looking to expand it. China has gone through a similar ordeal, having been embargoed by the west for decades and having to rely on Soviet-era equipment even a generation after the Soviets fell. China has made great strides in weapons manufacturing and technology development.
"It is here that I believe our mutual benefit can be found. For cheaper oil, we will ask for arms technology. Not nuclear technology, mind you, but technology in terms of jet engines, radars, stealth, guidance systems, missile systems, etc. It is in this that we place immeasurably more value than mere arms themselves. And as a matter of comparison, if Beijing is wiling to provide us arms in general, it isn't a large leap from manufactured arms to the technology to manufacture them, especially considering Tehran wouldn't likely ask for much arms in any case for Beijing's exports to suffer significantly from the increased domestic capability.
"Besides, as you are well aware, reverse-engineering is a field that can only be improved, is it not?"
China (Schwerpunkt) - August 11, 2012 12:28 AM (GMT)
Yang was not exactly amused by Salehi's attempt to leverage discounts on oil into military concessions of the sort he was asking for. It wasn't like China was positively desperate for the oil, nor was it like buyers were lining up to buy Iran's oil en masse. In fact, everyone -- China included -- had begun to distance themselves from the Iranian regime's oil exports.
So when Salehi asked for technology, Yang's early warning radar started beeping and booping. And the things the Persian asked for were not exactly easy to acquire on the international market even under ideal situations. The price was far, far too high for an almost trivial reduction in oil cost. Hundreds of millions of dollars of R&D warranted a great deal more than a $3-5 reduction per barrel of oil.
"I am afraid," Yang explained slowly, "that I am not at liberty to offer China's intellectual property in such a manner. While I could probably guarantee you old Soviet designs, we both know they would fail to meet your needs. Newer technology is protected by the Central Committee's directive to amass for ourselves foreign technology; they will only approve the transfer of technology if there is a rather notable net gain for us. While you do make a good case that anything we ship to you could simply be reverse-engineered, this particular directive remains in force regardless." Yang shrugged. "I, personally, do not see any profound wisdom in this policy but a directive is a directive.
"It would seem we have once more reached an impasse. I am afraid that there is nothing else on my agenda that I would like to discuss at this point in time. I truly wish the issues I had chosen were better received, but it seems to me that I chose to discuss matters that are simply... too far from us at this juncture. Perhaps in the future we might return to these matters.
"Is there anything you would like to add to the agenda?"
Iran (Dax) - August 14, 2012 06:19 PM (GMT)
Mr. Salehi, despite feeling utterly confounded by the Chinese foreign minister's behavior throughout the entirety of this meeting, was nevertheless able to privately determine what appeared obvious to him at this point: Mr. Yang or his government had reached an agreement with Washington in which Tehran was cast aside in favor of some concession to Beijing. It was a disparaging conclusion, but one he nonetheless would be forced to report back to the President and, anxiously, the Supreme Leader in dismay.
"I do not wish to add anything to the agenda that you did not travel here to discuss, Mr. Yang. You have plainly stated your aims in travelling to Tehran, and with those topics apparently closed, I do not wish to occupy your time with any of our trivial areas of concern. If oil discounts were your paramount motivation in this visit, it would appear that the topic has been exhausted. Thus, perhaps this meeting is best drawn to a close.
"Best of luck on your retirement, Mr. Yang, and it has been a pleasure working with you these last few years. The Supreme Leader sends his regards and best wishes in the future. I should hope the incoming Chinese leadership proves as remarkably easy to work with as this one has been."
Iran (Dax) - August 16, 2012 06:39 AM (GMT)
SUMMARY OF IRAN-CHINA BILATERAL SUMMITConducted 3q2012
[[Not very productive, but it's all I can think of. Look good to close?]]
- China and Iran will establish a fund to be used for distribution of grants for joint Sino-Iranian research into alternative energy sciences and development;
- Foreign Ministers Mr. Yang and Mr. Salehi agree to encourage close bilateral contact between Beijing and Tehran regarding issues of mutual concern, including energy, international affairs, and the dispute over Iran's nuclear program.