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Before the nuclear agreement with Iran, the Obama administration actively engaged with world powers and trade partners of Iran to strengthen the effectiveness of economic sanctions against Tehran. The role of China as the largest trade partner of Iran and as a veto power in the United Nations Security Council (UNSC) was controversial in this regard. Washington persuaded most of Iran’s trade partners to join in the sanctions and reduce trade with Tehran. But during the same period, China continued and even expanded economic relations with Iran. Reviewing the events through a process-tracing method, this study reveals that the Obama administration implemented a “guarded engagement” strategy to persuade China to join in the sanctions and reduce trade with Tehran. On one hand, the United States accommodated China’s interests and concerns, and engaged and bargained with China; on the other hand, Washington pressured Beijing through different channels such as security threats and economic sanctions. In response, through a soft-balancing strategy, China did not directly oppose the United States, in order to safeguard relations with Washington; and it eventually voted in favor of the UN resolutions after negotiating over the texts. In the meantime, Beijing refrained from voluntary cooperation with Western sanctions and even increased trade with Iran and filled the void to make sanctions abortive and costly, and to prevent U.S. domination over the Middle East. This study concludes that China’s current standing is such that U.S. diplomatic levers, such as bargaining, threats, sanctions, and pressures, are too costly and barely productive in getting Beijing to follow American policies.

The Iran Factor in U.S.-China Relations: Guarded Engagement vs. Soft Balancing