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China urges Iran to curb Houthi attacks in Red Sea, sources say

Authors: Parisa Hafeez and Andrew Haley

DUBAI (Reuters) – Chinese officials have asked their Iranian counterparts to help curb attacks by Iran-backed Houthi rebels on Red Sea ships that otherwise risk damaging commercial ties with Beijing, four Iranian sources and a diplomat familiar with the matter said.

Iranian sources said attacks and trade issues between China and Iran were discussed at several recent meetings in Beijing and Tehran, but declined to provide details on when the meetings took place or who was present.

“Basically, China will say: ‘If our interests are harmed in any way, it will affect our business with Tehran. So please show restraint to the Houthis,'” said an Iranian official familiar with the negotiations. anonymous.

The attacks, which the Houthis say are in support of Palestinians in Gaza, have disrupted key trade routes between Asia and Europe that are widely used by Chinese ships, raising shipping and insurance costs.

However, four Iranian sources said Chinese officials did not make any specific comments or threats on how China’s trade relations with Iran might be affected if a Houthi attack harms Beijing’s interests.

Although China has been Iran’s largest trading partner over the past decade, the two countries’ trade relationship is uneven.

For example, Chinese refiners bought more than 90% of Iran’s crude exports last year, according to tanker tracking data from trade analytics firm Kpler, as U.S. sanctions kept many other customers away and Chinese companies profited from deep discounts.

However, Iranian oil accounts for only 10% of China’s crude oil imports, and Beijing has an array of suppliers that can make up for oil shortages elsewhere.

Iranian sources said Beijing had made it clear it would be very disappointed with Tehran if any China-related ships were attacked or the country’s interests were affected in any way.

An Iranian insider said that while China is important to Iran, in addition to the Houthis in Yemen, Tehran also has proxies in Gaza, Lebanon, Syria and Iraq, and its regional alliances and priorities play an important role in its decision-making. .

When asked to comment on the meeting with Iran over the Red Sea attack, China’s Ministry of Foreign Affairs said: “China is a sincere friend of Middle Eastern countries and is committed to promoting regional security and stability and seeking common development and prosperity. “

“We firmly support Middle Eastern countries in strengthening strategic independence and uniting and cooperating to resolve regional security issues,” it told Reuters.

Iran’s foreign ministry was not immediately available for comment.

resistance axis

Military strikes this month by U.S. and British forces against Houthi rebel targets in Yemen have failed to stop attacks on shipping by the group, which controls large swaths of Yemen, including the capital Sanaa and much of the country’s Red Sea coast. strait.

The Houthis first emerged in the 1980s. They are an armed organization that opposes the influence of Saudi Arabia’s Sunni religion in Yemen. They are armed, funded and trained by Iran. They are the core of its anti-Western and anti-Israel “resistance axis”. part.

A senior U.S. official said Washington has asked China to use its leverage with Iran to persuade it to rein in the Houthis, including in talks this month between Secretary of State Antony Blinken and national security adviser Jake Sullivan and senior Chinese Communist Party official Liu Jianchao.

A senior Iranian official said that while Chinese officials fully discussed their concerns at the meeting, they never mentioned any of Washington’s demands.

On January 14, Chinese 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 called for supply chains and international trade order to be maintained.

Gao Weike, a chair professor at Soochow University in China, said that China, as the world’s largest trading country, has been particularly severely affected by shipping disruptions, and restoring stability in the Red Sea is a top priority.

But Gao, a former Chinese diplomat and adviser to oil giant Shah Aramco, said Beijing would see Israel’s treatment of the Palestinians as the root cause of the Red Sea crisis and did not want to publicly blame the Houthis.

A U.S. State Department spokesman declined to comment when asked about bilateral discussions between Iran and China on the issue.

A diplomat familiar with the matter said China has been discussing the issue with Iran, but it was unclear how seriously Tehran took Beijing’s proposal.

Two officials in the Yemeni government, enemies of the Houthis, said they were aware that several countries, including China, had tried to influence Iran to control the Houthis.

Eurasia Group analysts Gregory Blue and the International Crisis Group’s Ali Vaez said China has potential influence over Iran because of its oil purchases and because Iran hopes to attract more Chinese direct investment in the future.

However, both said China has so far been reluctant to use its influence for a variety of reasons.

“China is more willing to free ride on the United States and protect freedom of navigation in the Red Sea by shooting the Houthis in the nose,” Vaez said, adding that Beijing also realizes that Iran does not fully control its Yemeni allies.

Influence is not absolute

Houthi moderate Mohammad Abdulsalam said on Thursday that Iran had so far not conveyed any message from China about reducing its attacks.

He said: “They will not inform us of such a request, especially considering that Iran’s stated position is to support Yemen. It condemns the US and British attacks on Yemen and considers Yemen’s position to be honorable and responsible.”

Four Iranian sources said it was unclear whether Iran would take any action following discussions with Beijing.

For Iran, the stakes are high because China is one of the few countries capable of providing the billions of dollars in investment Tehran needs to maintain its oil industry capacity and economic development.

China’s influence was evident in 2023, when it brokered a deal between Iran and regional rival Saudi Arabia to end years of hostilities.

However, an Iranian insider said that despite the strong economic ties between China and Iran, Beijing’s influence on Tehran’s geopolitical decisions is not absolute.

Some within Iran’s ruling establishment have questioned the value of cooperation with Beijing, pointing to relatively low non-oil trade and investment since China and Iran signed a 25-year cooperation agreement in 2021.

Iranian state media said Chinese companies had invested just $185 million since then. State media also said last year that Iran’s non-oil exports to China fell by 68% in the first five months of 2023, while Iran’s imports from China increased by 40%.

In comparison, Chinese companies committed billions of dollars in investment in Saudi Arabia last year after the two countries signed a comprehensive strategic partnership in December 2022.

Two Iranian insiders said that while China cannot be ignored, Tehran has other priorities to consider and its decision is driven by a complex interplay of factors.

“Regional alliances, priorities and ideological considerations have a significant impact on Tehran’s decision,” one of the people said.

A second person said Iran’s rulers must adopt a nuanced strategy on the Gaza war and Houthi attacks and that Tehran will not abandon its allies.

Iranian sources said Iran’s role as leader of the “axis of resistance” – which includes the Houthis, Lebanese Hezbollah, Hamas and militia groups in Iraq and Syria – must be balanced with avoiding involvement in the war in Gaza.

One of the people said Tehran’s information to and about the Houthis needs to be a degree of denial of the extent of its control over the Houthis, but it also needs to be able to gain some credit for their anti-Israel operations.

(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 ; Additional reporting by Estelle in Aden and Greg Torode in Hong Kong; Writing by Parisa Hafezi; Editing by Estelle; Hafezi; Shirbon and David Clarke)

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