ANNUAL REPORT

dkrause on DSKHT7XVN1PROD with USCC
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U.S.-China Security Relations in 2016
U.S.-China security relations continued to be strained in 2016,
with tensions in the South China Sea playing a key role. The two
sides nonetheless cooperated on several areas of mutual interest,
while continuing to expand and institutionalize U.S.-China security
ties.
Areas of Cooperation
Iran Sanctions Lifted Pursuant to 2015 Joint Comprehensive Plan
of Action
China was among the eight signatories (along with the European
Union, France, Germany, Iran, Russia, the United Kingdom, and
the United States) of the Joint Comprehensive Plan of Action in
July 2015, which scheduled the removal of UN sanctions on Iran
in exchange for the imposition of restrictions on its nuclear program.
In January 2016, with these restrictions verified, the sanctions
were lifted (not including unilateral sanctions imposed by specific
countries). 315 During a visit to Iran by President Xi later in
January, the first visit by a Chinese leader in 14 years, Beijing and
Tehran agreed to boost trade to $600 billion over 10 years and formulate
a ‘‘25-year comprehensive document’’ covering ‘‘long-term and
strategic cooperation.’’ 316 According to National Defense University
research fellow Joel Wuthnow, ‘‘China is expected to be a prime
beneficiary of the deal as Chinese firms take advantage of greater
access to the Iranian market, especially in the energy sector.’’ 317
As the primary destination for Iranian oil exports, and a historically
close security partner to Tehran, China’s involvement in this
effort was crucial. 318 For example, according to China’s foreign
minister, its negotiators helped resolve a key dispute over the future
of Iran’s Arak heavy-water reactor during the July 2015 negotiations.
319 China’s record on the Iran sanctions program is mixed,
however. Former deputy assistant secretary of State for East Asian
and Pacific affairs Thomas Christensen noted that China watered
down the most significant UN Security Council resolution establishing
the sanctions in the first place by ensuring Iran’s largest
banks and energy sector were not included, and did not join North
American and European countries in passing unilateral sanctions—
the primary source of pressure on Iran’s economy—alongside the
UN sanctions. 320 China also used its role in the UN Security Council
to indirectly aid Iran by vetoing crucial resolutions affecting the
Syrian government, Iran’s ally, during the sanctions period. 321 In
addition, Chinese national oil companies were reportedly able to
negotiate favorable prices on Iranian crude oil imports during the
time in which UN sanctions were in effect (although these imports
did decrease), and exploited a loophole by increasing their Iranian
fuel oil imports—not covered by the sanctions—beginning in
2013.* 322 Analysts have pointed out several other potential con-
* The U.S. Department of Commerce also imposed severe restrictions on U.S. exports to Chinese
telecommunications company ZTE in March 2016, after ZTE allegedly violated sanctions
against exporting U.S.-made technology to Iran. Two weeks later the U.S. government granted
a reprieve on these restrictions, since extended to November 2016. Juro Osawa, ‘‘U.S. Grants
ZTE Another Extension of Trade-Sanctions Relief,’’ Wall Street Journal, August 18, 2016; Joel
Schectman, ‘‘U.S. Extends ZTE Reprieve for Alleged Iran Sanctions Violations,’’ Reuters, June
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