By Parisa Hafezi and Andrew Hayley
DUBAI (Portal) – Chinese officials have asked their Iranian counterparts to help curb attacks by the Iran-backed Houthis on ships in the Red Sea or risk jeopardizing business ties with Beijing, four Iranian sources and one familiar with the matter said trusted diplomat.
Discussions on the attacks and trade between China and Iran took place at several recent meetings in Beijing and Tehran, Iranian sources said, declining to give details of when they took place or who attended.
“Essentially China is saying, 'If our interests are affected in any way, it will affect our dealings with Tehran. So ask the Houthis to show restraint,'” said an Iranian official briefed on the talks who spoke to Portal on condition of anonymity.
The attacks, which the Houthis say are aiding Palestinians in Gaza, have increased transportation and insurance costs by disrupting a key trade route between Asia and Europe that is often used by ships from China.
However, Chinese officials made no specific comments or threats about how Beijing's trade relations with Iran could be affected if its interests were harmed by Houthi attacks, the four Iranian sources said.
While China has been Iran's largest trading partner over the past decade, their trade relations are one-sided.
Chinese oil refiners, for example, bought over 90% of Iran's crude exports last year, according to tanker tracking data from trade analysis firm Kpler, as U.S. sanctions kept many other customers away and Chinese firms benefited from deep discounts.
However, Iranian oil accounts for only 10% of China's crude imports, and Beijing has a number of suppliers that could make up for shortfalls from other countries.
The Iranian sources said Beijing had made it clear that it would be very disappointed in Tehran if China-linked ships were hit or the country's interests were in any way affected.
But while China was important to Iran, Tehran also had proxies in Gaza, Lebanon, Syria and Iraq in addition to the Houthis in Yemen, and its regional alliances and priorities played an important role in its decision-making, one of the Iranian insiders said.
Asked for comment on meetings with Iran to discuss the Red Sea attacks, China's Foreign Ministry said: “China is a sincere friend of the countries of the Middle East and is committed to promoting security and stability in the region and common interests Development and prosperity.” “
“We strongly support Middle Eastern countries to strengthen their strategic independence and join together and cooperate to resolve regional security issues,” it told Portal.
Iran's foreign ministry could not immediately be reached for comment.
AXIS OF RESISTANCE
Military strikes by American and British forces on Houthi targets in Yemen this month failed to stop attacks on ships by the group, which controls much of Yemen, including the capital Sanaa and much of the country's Red Sea coast at Bab al- Mandab Street.
The Houthis, which first emerged in the 1980s as an armed group against Saudi Arabia's Sunni religious influence in Yemen, are armed, funded and trained by Iran and are part of its anti-Western and anti-Israel “Axis of Resistance.”
A senior U.S. official said Washington has asked China to use its influence with Iran to persuade it to rein in the Houthis, including in talks that Secretary of State Antony Blinken and National Security Adviser Jake Sullivan had with the senior official this month of the Chinese Communist Party, Liu Jianchao.
A senior Iranian official said that while Chinese officials discussed their concerns in detail at the meetings, they never mentioned any requests from Washington.
On January 14, China's Foreign Minister Wang Yi called for an end to attacks on civilian ships in the Red Sea – without naming the Houthis or mentioning Iran – and for maintaining supply chains and the international trade order.
Victor Gao, a professor at China's Soochow University, said China, as the world's largest trading nation, was disproportionately affected by the shipping disruption and restoring stability in the Red Sea was a priority.
But Gao, a former Chinese diplomat and adviser to oil giant Saudi Aramco, said Beijing would view Israel's treatment of Palestinians as the root cause of the Red Sea crisis and would not want to publicly blame the Houthis.
A US State Department spokesman declined to comment when asked about bilateral talks between Iran and China on the issue.
A diplomat familiar with the matter said China had spoken to Iran about the issue but it was unclear how seriously Tehran was taking Beijing's advice.
Two officials in Yemen's government, an enemy of the Houthis, said they knew that several countries, including China, had tried to influence Iran to contain the Houthis.
Analysts Gregory Brew of the Eurasia Group and Ali Vaez of the International Crisis Group said China had potential influence over Iran because of its oil purchases and because Iran hoped to attract more Chinese direct investment in the future.
However, both said China has been reluctant to use its influence for several reasons.
“China prefers to move forward to protect freedom of navigation in the Red Sea by bleeding the Houthis' noses,” Vaez said, adding that Beijing is also aware that Iran does not have complete control about his Yemeni allies.
INFLUENCE NOT ABSOLUTELY
Houthi spokesman Mohammed Abdulsalam said on Thursday that Iran had not yet conveyed a message from China about reducing attacks.
“They will not inform us of such a request, especially since Iran's stated position is to support Yemen. “It condemned the US-British attacks on Yemen and considered Yemen’s position to be honorable and responsible,” he said.
The four Iranian sources said it was unclear whether Iran would take any action after talks with Beijing.
The stakes are high for Iran, as China is one of the few powers capable of providing the billions of dollars in investment Tehran needs to maintain the capacity of its oil sector and keep its economy afloat.
China's influence was evident in 2023 when it facilitated an agreement between Iran and regional rival Saudi Arabia to end years of hostilities.
But although there are robust economic ties between China and Iran, Beijing's influence on Tehran's geopolitical decisions is not absolute, one of the Iranian insiders said.
Some within Iran's ruling establishment have questioned the value of the partnership with Beijing, pointing to relatively low volumes of trade and investment outside the oil sector since China and Iran signed a 25-year cooperation agreement in 2021.
According to Iranian state media, Chinese companies have only invested $185 million since then. State media also said last year that Iranian non-oil exports to China fell 68% in the first five months of 2023, while Iranian imports from China rose 40%.
In contrast, Chinese companies committed to investing billions in Saudi Arabia last year after the countries signed a comprehensive strategic partnership in December 2022.
Two of the Iranian insiders said that while China cannot be ignored, Tehran has other priorities to consider and its decisions are shaped by a complex interplay of factors.
“Regional alliances and priorities as well as ideological considerations contribute significantly to Tehran’s decisions,” one of the people said.
The second person said Iranian leaders need to pursue a differentiated strategy when it comes to the Gaza war and Houthi attacks, and that Tehran will not abandon its allies.
Iran's role as leader of its “Axis of Resistance” – which includes the Houthis, Lebanon's Hezbollah, Hamas and militias in Iraq and Syria – must be balanced against avoiding involvement in a regional war over Gaza, Iranian sources said.
Tehran's messages to and about the Houthis required a degree of denial about the extent of its control over them – but also an ability to demand some recognition for their anti-Israel actions, one of the interviewees said.
(Reporting by Parisa Hafezi in Dubai and Andrew Hayley in Beijing; Additional reporting by Samia Nakhoul in Dubai, Trevor Hunnicutt, Humeyra Pamuk, Arshad Mohammed and Matt Spetalnick in Washington, Mohammed Alghobari in Aden and Greg Torode in Hong Kong; Writing by Parisa Hafezi; Edited by Estelle Shirbon and David Clarke)