The common perception on Capitol Hill is that China is not doing its part to support the international community's drive to halt Iran's emerging nuclear program. Not so, two senior administration officials said on Wednesday, as they praised China's action on Iran in a conference call with reporters on President Hu Jintao's visit to Washington.
The Chinese have stopped new investments in Iran's energy sector, improved their controls over weapons technology exports to Iran, and Chinese state-owned corporations are not backfilling business opportunities left open by other countries that are leaving Iran, the senior administration officials said. The officials also explained that the Iran issue has been at the top of the agenda on the U.S.-China relationship and that's partly why Beijing's behavior on Iran has improved.
"In all the meetings between the president and President Hu and our high-level interactions, there was no issue that occupied as much time and attention as Iran. It was absolutely at the top of the agenda in pretty much every meeting," one of the senior administration officials said, explaining that recent Chinese action vis-à-vis Iran "demonstrates positive results of that focus."
One of the top concerns in Congress right now about the U.S.-China relationship is that Beijing is not enforcing international arms sanctions against Iran and that Chinese companies have not stopped doing business with Iran's energy sector. Last week, two leading senators wrote to President Barack Obama warning that if the administration doesn't enforce U.S. sanctions law on Chinese companies, Congress will act.
"In fact, in the last seven months since the passage of the resolution I'm not aware of any new Chinese investments in the energy sector," another senior administration official said, apparently not counting ongoing deals between China and Iran to develop gas fields as "new". "That's an important development and it's an important signal to Iran."
"You do not see the kind of backfilling that might undercut the sanctions regime," the first official said.
Regarding exports of missile technology to Iran, one of the officials said that China "essentially adhere[s] to the guidelines of the Missile Technology Control Regime," which is meant to stop sensitive weapons transfers, despite the fact that China is not a member of that regime.
"China has done a great deal to improve its export control regime in order to try to block such exports," the official said. "There are gaps in China's enforcement. China's enforcement is still problematic... We don't see that as willful action by the Chinese government but as gaps in their system, which we urge them to correct."
In October, the Washington Post reported that U.S. officials had given the Chinese government a list of Chinese companies believed to be breaking international sanctions on arms transfers, including by giving them technology to help their missile and nuclear programs.
Both officials also touted Chinese support for U.N. Security Council resolution 1929, which one official described as "much stronger sanctions than anyone anticipated would pass, or that China would sign on to."
The senators don't agree that the Chinese government is willingly moving to end those abuses and in their letter, they cited numerous reports that China is supplying crucial materials to aid Iran's nuclear and missile programs and alleged that Beijing continues to give monetary and material support to Iran's energy sector, including the delivery of refined petroleum products, which does not violate U.N. sanctions but could provoke penalties under U.S. laws passed by Congress, including the Comprehensive Iran Sanctions Accountability and Divestment Act that Obama signed into law in July, 2010.
The senators specifically named the state-owned China National Petroleum Corporation (CNPC) and the China Petroleum and Chemical Corporation (SINOPEC) as firms that could be subject to U.S. penalties.
"We urge you to warn President Hu that the U.S. will be forced to sanction these companies if they do not quickly suspend their ties with Iran," the senators wrote.
Last October, the Government Accountability Office (GAO) released a new report that identified 16 companies as having sold petroleum products to Iran between Jan. 1, 2009, and June 30, 2010. Of those 16, the GAO reported that five have shown no signs of curtailing business with Iran. Three of those companies are based in China, one in Singapore, and one in the UAE.
But the joint statement issued on Wednesday by Obama and Hu made no mention of the U.S. sanctions law that could result in congressionally imposed penalties on Chinese companies. Here's the totality of what it said on Iran:
On the Iranian nuclear issue, the United States and China reiterated their commitment to seeking a comprehensive and long-term solution that would restore international confidence in the exclusively peaceful nature of Iran's nuclear program. Both sides agreed that Iran has the right to peaceful uses of nuclear energy under the Non-Proliferation Treaty and that Iran should fulfill its due international obligations under that treaty. Both sides called for full implementation of all relevant UN Security Council Resolutions. The United States and China welcomed and will actively participate in the P5+1 process with Iran, and stressed the importance of all parties - including Iran - committing to a constructive dialogue process.
UPDATE: A senior GOP Senate aide responds to the administration officials' comments with considerable skepticism:
"These senior Administration officials continue to obfuscate and misdirect. Chinese entities are clearly in violation of the Iran, North Korea, and Syria Nonproliferation Act (INKSNA) and the Comprehensive Iran Sanction, Accountability, and Divestment Act of 2010 (CISADA)," the aide said. "If the administration doesn't act soon, it faces the loss of its waiver authority and investigatory discretion on these matters."