Relationship Between Iran and China in Light of Economic Sanctions Essay

Relationship Between Iran and China in Light of Economic Sanctions Imposed on Iran - Essay Example India, like many other countries, has invested billions of dollars in Iranian oil fields towards business oil trading purposes as well as research and development of oil refineries in Iran. The Economics Times reported that the Indian government-owned ONGC along with the private sector Ashok Leyland Project Services Ltd of the Hinduja group won $10 billion bid for investing in Iranian oil company, Naftiran Intertrade Co and Petropars Ltd in 2008. However, India eventually lost this deal to China after the China National Petroleum Corp (CNPC) offered to contribute towards NICO's share of the $ 2.5 billion cost for developing the field that holds an estimated 42 billion barrels of oil reserves, one of the world's largest finds in the last 30 years according to The Economics Times news report. Iran’s conduit towards India’s proposition and favoring China is a result of international business relations between the countries, which are further shaped by their cultures, busin ess negotiations and political positions. It is important to note that both India and China have high demand for oil in both domestic and commercial sectors (Oil Prices, 2). Moreover, China is a larger and greater potential for business compared to India. Reports from investigation agencies revealed that inward FDI into China is at least two to three times higher than what is reported; and FDI is majorly from the United States, the United Kingdom, France and other European nations. Yet, China’s high corruption and regulations still discourage FDI by significant amount (Wei, 200). Sources also report that corruption has been tackled to a great extent in China compared to India, where corruption still continues to haunt its economic progress (Ragunathan, para 1). Reduction in Chinese corruption... This essay offers a comprehensive analysis of the impact, that international sanctions imposition on Iran would exert on the nature of the relationships between China and Iran. While most of the other nations that traded with Iran before the imposition of the sanctions, have stopped or minimized their trade, China still seemed to be inclined towards Iranian oil reserves, owing to its huge investments in Iran. In fact, Iran dismissed its deal with India’s oil company and confirmed the same with China’s oil company few years before the sanctions were announced. China did not heed to the warnings of sanctions from the US and succeeded in this and many other business deals in order to secure its oil reserves. With China already investing in oil business at international level with Iranian companies, the proposed sanctions on Iran will result in serious consequences for China. The Iran-China relationship has only intensified during last decade, despite warnings from the US to China to stay away from Iran because of Iran’s advent into nuclear program and refusal to support peace projects in neighboring countries. The US had delayed sanctions on Iran for many years because of China’s involvement with Iran, which was an obstacle to putting international pressure on Iran. China should continue to abide by its principles and norms of not seeking control, upholding principles of sovereignty, engaging in peaceful development and in being a responsible stakeholder in the international system.