STRONG DOMESTIC PRESSURE DRIVING IRAN'S NUCLEAR

C O N F I D E N T I A L BEIJING 001306

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/19/2016
TAGS: PREL PARM KNNP IR EU AORC CH
SUBJECT: STRONG DOMESTIC PRESSURE DRIVING IRAN'S NUCLEAR
PROGRAM; CHINA LOOKING AFTER ECONOMIC INTERESTS

REF: A. BEIJING 00550


B. BEIJING 00094

C. STATE 02147

Classified By: Deputy Chief of Mission David Sedney.
Reasons 1.4 (b/d).


1. (C) Summary: A strong domestic consensus in Iran
is driving the government to restart enrichment
activities and to pursue an indigenous nuclear
program, according to MFA West Asia and African
Affairs Iran Division Director Xu Wei. In a January
19 meeting, Xu said that Beijing believes it is the
only viable go-between to resolve the Iranian nuclear
program. China has not yet received detailed
briefings from the Russians on its proposal to assist
Iran's nuclear program. Beijing and Tehran have
healthy economic ties and Beijing does not believe
Iran will use punitive oil pricing or sales measures
against it, if China in the end supports a referral to
the UNSC. Iranian VFM Safari held previously
undisclosed meetings with China's Economic Planning
Vice Minister Zhang Guobao while in Beijing earlier
this month. A German Embassy officer told us that
China is pressuring Iran to quickly close a deal on
Iran's last untapped oil field. End Summary.

Domestic Pressure Pushing Iran to Restart Nuclear
Program
-------------- --------------


2. (C) Domestic pressures are forcing the Iranian
Government to restart its uranium enrichment
activities and to pursue an indigenous nuclear
program, MFA West Asia and African Affairs Iran
Division Director Xu Wei told poloff on January 19.
During his January 8-9 visit to Beijing, Iranian Vice
Foreign Minister Mehdi Safari told PRC officials that
Iran restarted its uranium enrichment activities
because of pressure from three groups: frustrated
young scientists and technicians who fear they are
losing their skills because they are out of work,
deputies in the Iranian Congress seeking to raise
Iran's international prestige and mullahs who view
Iran's nuclear program as a symbol of power as well as
an affront to western hegemonism that will shine as an
example of a perfect Muslim state that the Islamic
world can aspire to. Moreover, young people who are
desperate for opportunities and seek to raise Iran's
international profile increasingly drive Iranian
politics. Xu said the current situation is very grave
and that Iran is not likely to back down because the
government has too much to lose domestically.


3. (C) Iran is unified in its desire to pursue an
indigenous nuclear program, according to Xu. He
stated that the people and the various factions within
the government all share the desire and goal of Iran
having its own nuclear program but have different
ideas on how to achieve that goal. Iran's President
believes confrontation over the nuclear issue provides
the Islamic world with an example of a Muslim state
successfully standing up to the West. Other Iranian
Government officials (Xu would not provide names) see
the President's approach as exacerbating tensions
needlessly. Regardless, all factions defend Iran's
right to develop nuclear technology.


4. (C) In a separate January 19 meeting, German
Embassy Officer Aron Mir Haschemi stated that the
German Embassy in Tehran shares the same assessment of
Iran's domestic situation. The German Embassy in
Tehran reports that popular support for restarting the
uranium enrichment
activities has prevented Iranian politicians from
being able to negotiate with the West on the issue.
Furthermore, moderates within Iran are not willing to
speak out because of fear of government reprisals
including bodily harm and exile.

China Views Itself as a Go-Between for Iran and the
West
-------------- --------------



5. (C) China continues to pursue normal, healthy
relations with Iran in order to benefit the
international community, according to Xu. China views
itself as the only possible middleman between a
revolutionary Islamic state and western liberal
democracies. Iran will never accept proposals from
the outside, particularly from the "Great Satan."
Beijing urges the international community to adopt a
patient attitude towards Iran and recognize that it is
facing domestic pressures.

China's Perspective on the Russian Proposal
--------------


6. (C) The Russian proposal to conduct Iranian uranium
enrichment in its territorial boundaries surprised
Iran, according to Xu. The proposal is totally
different from how the Iranians envisioned the
development of their nuclear program and may run
counter to their desire to become a beacon for the
Islamic world. At this time, however, Tehran has not
rejected the goal outright and will weigh carefully
every aspect of the Russian proposal. Lamenting that
"working with the Iranians takes years off your life,"
Xu said that based on his five-year experience living
in Iran, he finds the Iranians to be top negotiators
"bar none." They are able to reach deals that
maximize their interests while returning very few
benefits to the other side.


7. (C) When asked about China's opinion of the
proposal, Xu stated that Russia has yet to provide an
outline or details of its plan to Beijing. China
welcomes all proposals that may provide a solution to
the current impasse with Iran. Xu said China has not
discussed the Russian proposal in Moscow nor has
Russia discussed the proposal in Beijing. Xu noted
the possibility that Zhang Yan was provided more
details on the plan during the January 16 London
talks.

Iran's Nuclear Intentions
--------------


8. (C) When asked if Iran's ultimate goal in
restarting its nuclear program is to develop a nuclear
weapon capability, Xu carefully avoided answering,
instead repeating that Iranians are the world's best
negotiators who "always will leave you with nothing."


9. (C) German officer Aron said that German
intelligence services have met with the Chinese
intelligence services to discuss how close Iran is to
achieving a nuclear weapon capability.

China - Iran Economic Relations
--------------


10. (C) Beijing and Tehran enjoy healthy economic
ties, according to Xu. Currently, China does not have
any outstanding oil contracts under negotiation. Xu
said that China has a huge need for oil and Iran is
willing to sell its oil to China. Last year China
purchased over 16 million tones of oil from Iran.
During Iran's Vice Foreign Minister Mehdi Safari's
January 8-9 visit to Beijing, Safari met with National
Development and Reform Commission Vice Minister Zhang
Guobao to discuss further cooperation on energy
issues. (Note: The MFA Arms Control and Disarmament
Department provided a read out of the Safari visit
(reftel A) and stressed that the topic of discussion
was Iran's nuclear program. The readout did not
mention the Zhang meeting. UK Embassy Officer Clare
Filshie and German Embassy Officer Aron Mir Haschemi
confirmed during separate January 18 meetings that
they were not told about the Zhang meeting either. End
Note.) When asked if China was worried about Iran
adopting punitive oil pricing or oil sales policies in
reaction to its referral to the UNSC, Xu stated that
Iran has not threatened China with any retaliatory
measures if China agrees to the UNSC referral. Xu is
convinced that the Iran situation will cause oil

prices to increase dramatically.


11. (C) German Emboff Aron said that Germany believes
China is still in negotiation with Iran to tap Iran's
largest untapped oil field at Yadavaraon. A framework
for the agreement has been signed but China is
aggressively pressuring Iran to close the deal,
according to Aron and Germany Embassy sources.


12. (C) Aron said that the German Government has
initiated economic impact studies on the loss of trade
with Iran in preparation for a referral to the UNSC
and possible sanctions. German analysts are looking at
trade between China and Iran as well. Germany has
considerable concern that as one of Iran's largest
trading partners, German industries and the overall
economy could be hurt by a downturn in German-Iran
relations. According to Aron, Germany is concerned
that China could supplant its market share in key
industries such as automobiles if Germany supports a
UNSC referral and China does not.
Randt