For the longest time, we've known that China plays by its own rules when it comes to trade and frankly, just about anything else. But you'd think that when it comes to a common enemy (Iran) that they'd at least have the good judgment to put on a different trade face -- at least publicly. Guess again. According to the FT, a Chinese Vice-Premier recently "told the visiting Iranian oil minister ... that Beijing would maintain co-operation with Tehran on existing projects, [even] after the US called on Beijing to observe sanctions." It's my suspicion that the rationale for continuing to circumvent the expectations of all Western countries -- any country where the primary exports are refugees, baseball players, cigars and rum doesn't qualify as a country in my book -- is not to play hardball with the US but rather simply to feed its thirst and dependence on foreign oil.
I've come to this conclusion based on the words of the politburo itself. Consider a fairly recent People's Daily article that suggests "Directors of China's 4 major energy research centers all agreed ... that the ratio of China's dependence on foreign oil has exceeded the warning line of 50 percent in 2009, marking that oil imports has replaced domestic oil output to meet the majority of China's oil consumption." Moreover, import quantities continue to boom reaching "22.27 million tons or 5.44 million barrels per day in June, up 34% year on year, according to statistics released by the General Administration of Customs of China."
In other words, China is not trading with the mullahs and the nutcases in power in Iran because it wants to. In fact it has to, given that Iran is one of its top three oil suppliers. Given this, it's no surprise that "China has already pushed back at US pressure on its business and oil trade with Iran," according to the FT. Companies and governments monitoring the situation with Iranian oil in China would do well to consider a proxy for how China will respond to future trade requests when it comes to other raw materials and minerals coming from other questionable trading nations. Chances are, they'll tell us to go fly a kite -- hopefully manufactured to a quality standard to more than three minutes in the sky -- just as much as they have in this case.