Where, the actions of Iran and the relationship that they have with the country could become a liability. This is problematic, because it more than likely will mean that China will have to make a choice between conducting business with the Western nations and working with Iran. Given the fact that the West has greater economic opportunity; means that this underlying relationship could change, if China was forced to choose between the two sides. This is significant, because it shows the overall vulnerability that China will face because of this association. As the West, could force them to choose between: being a member of the world community or supporting an isolated Islamic Republic. (Mousavin 141 -- 172) A third aspect of the changing association in Sino Iranian relations is: the desire for China to become a major player on the world stage. This is one of the biggest goals that the country has been striving to achieve, since it began to impose various economic reforms in the 1970's. The advances over the last several decades are helping China, to quickly realize this objective. That being said, the relationship that they have with Iran is causing many to question the motives and actions of the government. As many critics will claim that China is interested in their own self-interest vs. being a responsible member of the world community. Over the course of time, this could force China to abandon or reduce its relationship with Iran, as they feel that it has become a liability. Once this takes place, it can have negative consequences for Iran, as China could decide that it is causing too much strain. This is significant, because it shows how this desire to be a major player, could cause Iran to become burden, forcing the Chinese government to reevaluate the underlying levels of economic and military cooperation with the Islamic Republic. (Mousavin 141 -- 172)

When you look at the changing nature of this relationship, it is obvious that the actions taken by Iran could cause China to view them as a liability. This is important, because if Iran continues to defy the wishes of the international community, is when it may become advantageous for China to walk away from them. Given the fact that Iran is building a nuclear weapon and has refused to follow UN resolutions; means that this could, become very realistic possibility at some point in the future.

How this could have an impact upon future relations?

The association that China is having with Iran could have an impact upon its relations with the world community and trading partners. This is because Iran has been consistently seeking out nuclear technology sine the 1980's. The problem is that at the time, Iran was considered to be a signatory of the Nuclear Non-Proliferation Treaty (NPT). Under this agreement any nation that is perusing nuclear energy for peaceful purposes, can import and build their own facilities (to address their different energy needs). Once the IAEA visited various sites around the country, they would certify that Iran was seeking this technology for peaceful purposes during the early 1990's. Since the U.S. had economic sanctions against Iran, meant that they wanted to prevent the Islamic Republic from having access to this technology at all costs. This is problematic from the view point of China, as they felt that the U.S. objectives went beyond the provisions of the NPT agreement. Therefore, given the fact that IAEA would certify that the program was peaceful at the time; China would begin to export technology to Iran for this purpose. Throughout the 1990's and into the mid-2000's this issue would be an area of constant debate among American and Chinese officials. Where, the U.S. believed that China should never trade this kind of material and technology with the Islamic Republic. While China, does not understand the logic behind going beyond the provisions the NPT. This is important, because it shows the levels of contention between the West and China surrounding its relationship with Iran. As the U.S. believed that China should not share nuclear technology with them, whilst China felt that U.S. was attempting to tell them what to do. When you put these two different elements together, it would highlight the contentious relationship that China and the West would have surrounding nuclear proliferation. (Mederios 141 -- 172)

However, as...

Where, many proponents of free trade in the West would argue that by allowing China to have favorable trade status; it will help to curb this kind of behavior in the future. The reason why, is because they felt that the various economic freedoms and improved standards of living would serve as way of liberalizing the country (discouraging such behavior in the future). The idea was that as the standard of living and economic prosperity were increasing, China would be forced to choose between trading with the West and their economic relationship with Iran. At which point, many of the individuals believed that China would follow a similar position of the U.S., as this will force them to address the actions that they are taking on this matter. This is problematic, because it did not take into account the increasing demand that the Chinese economy would require for consistent economic growth (a continuous supply of various natural resources). As a result, the ties between Iran and China would become strengthened. Evidence of this can be seen with the China seeing a quadruple in their energy demand over the last twenty years. Where, the country would quickly become the second largest consumer of oil (behind the United States). This would cause the country's demand for oil to climb to 7.8 million barrels per day by 2008. Out of this number, 3.9 million barrels are accounting for, the total amount of imports that they require, to keep up with demand. To make matters worse, as the economy continues to grow well into the future, the underlying level of demand could increase to around 10 million barrels per day (with the majority of the increases supply coming from imports). This is important, because it shows how the increasing economic growth, would place pressure on China to boost their imports, in an effort to keep up with demand. (Walter 29 -- 31)
Iran is strategically positioned (from the view of China), as it is within close proximity of its borders and they have large proven reserves of oil as well as natural gas. Evidence of this can be seen with the fact that the country has 10% of the world total energy reserves for crude oil and 15% of the natural gas reserves. This is important, because the close proximity and large reserves of oil / natural gas; are causing China to seek out these kind of partnerships (with Iran). Where, they can provide their economy with what it needs for growth. At the same time, China has become concerned about the security of the supply of oil and natural gas. The reason why, is because they think that obtaining their supplies through Middle East could be risky. As there is threat of terrorism and all of the ships must go through the Strait of Hormuz. This is the point that all vessels must pass through, to deliver oil and natural gas to world markets. When you put these two elements together, this mean that China would begin to seek out agreements with other countries. That can offer a guaranteed supply and do not have the possible security / logistical issues in delivering it. (Walter 29 -- 31)

As a result, Iran became the ideal partner, because they could provide the consistent supply that China needed and an effective way of securely delivering it. As they would build a pipeline through the Caspian Sea, to deliver these resources to Chinese markets. At the same time, Iran would begin to press China for assistance on host of different issues ranging from: the purchases of military equipment to helping the country build its infrastructure. This has made Iran, China's third largest importer of crude oil and it has allowed the Islamic Republic to receive critical assistance, in developing its infrastructure as well as engaging in a host of different activities (including the sponsorship of terrorism). However, this relationship is somewhat complicated, as China's dependence upon Iran has often been over exaggerated. Where, China's largest supplier (Saudi Arabia) has publically stated that they easily fill any kind of shortage from the Iranians. Evidence of this can be found by looking at a visit that King of Saudi Arabia would make to China in 2006. As he would consistently reiterate his country's ability to address various supply issues that they could be facing in the future…