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China Reconsiders Iran Relations
July 22, 2025: Chinese success at negotiating a peace treaty between Iran and Saudi Arabia in 2023 signified something remarkable. It meant China was now a significant factor in Middle Eastern politics. There were practical reasons for China helping Iran. China gets most of its oil from Iran. China does not want to be considered a full time peacemaker.
The current war between Iran and Israel, with some Americans participating, threatens the Chinese economy because of the threat of losing its oil supply. China wants to help Iran defend itself but cannot send troops. So the Chinese have been sending air defense systems to replace the ones Israeli airstrikes destroyed in June. These are defensive weapons that don’t annoy the Israelis and don’t really matter to the Americans. Another factor is that the Chinese concerns for Iran are purely economic self-interest. The Iran deal was simply to protect the Chinese source of oil. Shipping Iran air defense systems was also self-interest.
The only other deals China had with Iran involved smuggling. For the last twenty years Iran has been using Chinese firms to facilitate weapons related smuggling efforts. This is not necessarily with the cooperation of the Chinese government, but there is apparently little risk of getting arrested in China for buying some weapons related items from a European or American firm, and passing it out the back door to Iranian smugglers. Chinese exporters are particularly enthusiastic about selling Iran items that have dual civilian and military uses. These could be exported more openly. China could later claim that the Iranians promised not to use these items for military purposes.
Many Western nations have become more aggressive in curbing this sort of thing. Australia stopped a shipment of pumps that, it turned out, were capable of being used in nuclear power plants. Iran has been quite blatant about buying dual use equipment, and then openly using it for military purposes. That bravado is backfiring. But there are several nations that are willing to look the other way at this sort of smuggling which involves diverting to Iran items purchased for use in some other country. Malaysia became a source for all sorts of smuggling schemes. That works until the international pressure, especially threats to limit access to the international banking system, and technology in general triggers a crackdown on the smugglers. China has successfully stonewalled complaints related to technology theft and Internet based espionage.
Ever since the U.S. embargo was imposed in 1979, because Iran seized the American embassy. After that Iran sought, with some success, to offer big money to smugglers who could beat the embargo and get needed industrial and military equipment. This is a risky business, and American and European prisons are full of Iranians, and other nationals, who tried, and often failed, to procure forbidden goods. The smuggling operations have long been subject to more scrutiny and attack because of Iran's growing nuclear weapons program. But the Iranians simply offer more money, and more smugglers step up to keep the goodies coming.
The U.S. has gotten more aggressive, and successful, at shutting down Iranian smuggling operations. Not just by bribing the smugglers themselves, but also by getting the cooperation of nations the smugglers operate out of. This has been so successful that most of these smugglers no longer feel safe working out of Arab Persian Gulf nations, especially the United Arab Emirates. As a result, more smugglers are operating out of Malaysia, and the U.S. eventually shut down that activity. America also monitored the international banking network, seeking signs of smuggler activity, and leaning on the banks involved to step back.
The smuggling effort has been a mixed success. The Iranian armed forces are poorly equipped, because new tanks, warplanes and ships could not be smuggled in. Major weapons systems acquired in the 1970s have been falling apart for want of sufficient replacement parts.