China advises Iran to halt Red Sea Houthi raids or risk jeopardizing commercial connections

According to four Iranian sources and a diplomat with knowledge of the situation, Chinese authorities have requested that their Iranian colleagues assist in curbing Houthi assaults on ships in the Red Sea. Failure to do so might jeopardize Beijing’s commercial ties.

The Iranian sources added that talks about the attacks and commerce between China and Iran had taken place at a number of recent meetings in Beijing and Tehran, but they would not say when or who was there.

In essence, China is saying that any damage to its interests would have an effect on its trade with Tehran. Thus, advise the Houthis to exercise moderation,” an Iranian diplomat informed on the discussions told Reuters, speaking anonymously.

Due to the disruption of a vital commercial route between Asia and Europe that is often traveled by ships from China, the attacks—which the Houthis claim are in support of the Palestinians in Gaza—have increased the cost of insurance and transportation.

The four Iranian sources said that the Chinese officials, however, made no explicit remarks or threats about Beijing’s commercial connection with Iran in the event that Houthi strikes hurt its interests.

For the last ten years, China has been Iran’s largest commercial partner, although their relationship is unbalanced.

For instance, according to tanker monitoring data from trade analytics company Kpler, Chinese oil refiners purchased more than 90% of Iran’s crude shipments last year as U.S. sanctions drove many other buyers away and Chinese companies benefited from steep discounts.

However, just 10% of China’s crude imports come from Iran, and Beijing has a wide range of suppliers that might make up any deficits.

According to the Iranian sources, Beijing had made it plain that it would be very upset with Tehran if any Chinese-registered warships were destroyed or if the nation’s interests were compromised in any manner.

Although China was vital to Iran, one of the Iranian insiders stated that Tehran’s regional alliances and goals, in addition to the Houthis in Yemen, had a significant part in its decision-making. Tehran also had proxies in Gaza, Lebanon, Syria, and Iraq.

In response to a question about discussions with Iran over the assaults in the Red Sea, China’s ministry of foreign affairs stated: “China is a sincere friend of the countries of the Middle East and is committed to promoting regional security and stability as well as seeking common development and prosperity.”

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

The foreign ministry of Iran was unavailable for comment at the time of writing.

RESISTANCE AXIS
This month, U.S. and British troops launched military operations against Houthi targets in Yemen; the group, which has control of a sizable portion of the nation, including the capital Sanaa and most of the Red Sea coast along the Bab al-Mandab strait, has not been able to halt its assaults on ships.

The Houthis are part of Iran’s anti-West, anti-Israel “Axis of Resistance” and were initially formed in the 1980s as an armed force against Saudi Arabia’s Sunni religious hegemony in Yemen. Iran also provides arms, funding, and training for the Houthis.

In talks with senior Chinese Communist Party official Liu Jianchao this month, Secretary of State Antony Blinken and National Security Advisor Jake Sullivan asked China to use its influence with Iran to convince it to rein in the Houthis, according to a senior U.S. official.

Although Chinese officials addressed their concerns in detail at the discussions, according to a senior Iranian official, they made no mention of any demands from Washington.

Without mentioning Iran or the Houthis, China’s foreign minister Wang Yi demanded on January 14 that assaults on civilian ships in the Red Sea stop and that supply lines and the global trading system be upheld.

As the largest trade country in the world, China was disproportionately impacted by the interruption to shipping, according to Victor Gao, chair professor at Soochow University in China. As such, stabilizing the Red Sea was of utmost importance.

However, former Chinese diplomat and advisor to Saudi Aramco, Gao said Beijing would see the Red Sea situation as mostly caused by Israel’s treatment of the Palestinians and would prefer not to openly place the blame on the Houthis.

When questioned about bilateral negotiations on the matter between China and Iran, a representative for the U.S. State Department refused to comment.

China has been in communication with Iran over this topic, according to a diplomat with knowledge of the situation, although it was unclear how seriously Tehran was following Beijing’s advise.

Two representatives of the Houthi-opposing Yemeni government acknowledged that China was among the nations that had attempted to persuade Iran to restrain the Houthis.

Iran was seeking to draw more Chinese direct investment in the future, thus analysts Gregory Brew of Eurasia Group and Ali Vaez of the International Crisis Group claimed China may exert influence over Iran due to its purchases of oil.

But for a variety of reasons, according to both, China has been hesitant to utilize its power up to this point.

“By bloodying the Houthis’ nose, China prefers to free-ride on the U.S. protecting freedom of navigation in the Red Sea,” Vaez said, adding that Beijing knew that Iran did not have complete control over its supporters in Yemen.

A FLUENT INFLUENCE
Mohammed Abdulsalam, a spokesperson for the Houthis, said on Thursday that Iran has not received any communication from China about a reduction in assaults.

“They won’t let us know about this request, especially considering Iran has made it clear that it supports Yemen.” It saw Yemen’s stance as honorable and responsible and denounced the American-British assaults on the country,” he said.

It was unclear, according to the four Iranian sources, if Iran would take any more action after the talks with Beijing.

China is one of the few nations that can provide Tehran the billions of dollars in investment it needs to maintain the capacity of its oil industry and sustain its economy, so the stakes are quite high for Iran.

China’s influence was shown in 2023 when it helped to broker a settlement to end years of hostilities between Iran and Saudi Arabia, a regional adversary.

Although China and Iran have strong economic links, one of the Iranian insiders claimed Beijing’s control over Tehran’s geopolitical choices was not total.

Given that China and Iran inked a 25-year cooperation pact in 2021, several members of Iran’s governing elite have questioned the wisdom of the alliance with Beijing, pointing to the comparatively small amounts of non-oil trade and investment.

China has only made $185 million in investments since then, according to Iranian official media. In addition, state media reported last year that while Iran’s imports from China increased by 40%, the country’s non-oil exports to China decreased by 68% in the first five months of 2023.

In contrast, with the signing of a comprehensive strategic alliance between Saudi Arabia and China in December 2022, Chinese businesses pledged last year to spend billions in the kingdom.

Although Beijing could not be disregarded, according to two Iranian sources, Tehran had other interests to take into account and made judgments based on a complicated web of interrelated considerations.

“Regional alliances and priorities as well as ideological considerations contribute significantly to Tehran’s decisions,” a participant said.

The second added that Tehran would not desert its partners and that Iran’s leaders needed to take a measured approach to the Houthi assaults and the Gaza conflict.

As the head of the Houthis, Hamas, Lebanon’s Hezbollah, and militias in both Iraq and Syria, Iran’s “Axis of Resistance” had to be weighed against avoiding being drawn into a regional conflict over Gaza, according to Iranian sources.

One of the persons said that Tehran needed to be able to deny the degree of its authority over the Houthis while yet allowing them to take some credit for their anti-Israel acts in their message to and about them.