Soleimani’s killing warmer relations with China?

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Don’t expect Soleimani’s killing to derail trade talks despite China’s warmer relations with Iran

KEY POINTS
  • Beijing has too much to lose in economic terms to justify anything more than stern criticism of U.S. action toward Tehran, economists and analysts said.
  • With a temporary truce and more than $700 billion dollars’ worth of trade on the line, China isn’t likely to give up its hard-fought compromise.
  • “In terms of direct impact on trade talks, etc., it’s probably pretty limited,” writes Clete Willems, a former White House trade official. “Neither Iran nor [North Korea] ever really factored in the past.”


The U.S. killing of Tehran’s top military commander on Iraqi soil shouldn’t derail trade talks between Washington and Beijing in spite of warmer diplomatic relations between China and Iran in recent years.


The sovereignty and territorial integrity of Iraq should be respected, and peace and stability in the Middle East Gulf region should be maintained,” China’s Foreign Ministry spokesperson Geng Shuang said Friday. “We urge all parties concerned, especially the United States, to maintain calm and restraint and to avoid the further escalation of tension


But Beijing has too much to lose in economic terms to justify anything more than stern criticism of U.S. action toward Tehran, economists and analysts said.


China will, despite its closeness with Iran, still recognize that the U.S. is their big trade partner


said Adnan Mazarei, an Iran specialist at the Peterson Institute for International Economics and a former deputy director of the International Monetary Fund’s Middle East Department.

“And, given the unfavorable sentiments in the U.S. government these days toward China, they would be very, very hesitant to come out and make declarations of any sort,” he added. “None of these three countries can change trade policy overnight.”

President Donald Trump’s decision in 2018 to withdraw from the landmark Iran nuclear deal, in particular, drove a wedge between the U.S. and its Western allies and is widely viewed as the beginning of the recent downward spiral in U.S.-Iranian relations.

The decision also highlighted China’s closer energy and business ties with Iran. Beijing announced that it wouldn’t participate in U.S. oil sanctions against Tehran and last month held joint naval war exercises in the Gulf of Oman.

While China raced to condemn the Pentagon’s move in Baghdad, economic relations between the U.S. and China remain fragile in their ongoing trade dispute and neither side wants to ruin recent progress.

The globe’s two largest economies have been hard at work over the last two years, with several rounds of painstaking trade negotiations, broken promises and tit-for-tat tariffs only just summing to a partial “phase one” deal reached in December.

So with a temporary truce and more than $700 billion dollars’ worth of trade on the line, China isn’t liable to give up its hard-fought compromise and big export market for the sake of defending Iran, wrote Clete Willems, a former Trump White House economic official and prior member of the Office of the United States Trade Representative.

“In terms of direct impact on trade talks, etc., it’s probably pretty limited,” Willems wrote in an email. “Neither Iran nor [North Korea] ever really factored in the past and I’d be surprised if it did now.”

“That said, I would agree that there has been some longstanding concern about China’s relationship with Iran, and I’d imagine that concern would heighten,” he added.

The ultimate weight of the Baghdad attacks, however, may not be as obvious as unstable relations with Iran or chidings from China.



Hu Xijin, editor-in-chief of a tabloid under the official newspaper of the Communist Party of China with a knack for predicting Beijing’s strategies in trade talks, said the U.S. strike means something else to another longtime American adversary.

“The US humiliating Iran this way sent such a message to North Korea: If it were not for your nuclear weapons, we would be more brutal on you,” he wrote on Twitter. “Now North Koreans are probably thinking: We can lose anything, but not nuclear weapons.”


(Source CNBC)

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