China Checkmates the US in the Middle East. AT. China locked in part of its future energy needs with a long-term arrangement with Iran via a $100 billion 25-year deal (for 10 million tons of LNG a year). It is expected to increase to 15-20 million tons a year. An additional agreement on oil worth another $50 to $100 billion is expected soon.
This does two things. China has been able to lock in one of the few stable sources of energy. It also means that economic pressure (sanctions) on Iran to suspend its nuclear program will be ineffective. China has alredy indicated its willingness to veto any measures against Iran in the Security Council.
Iran is already seen as a gateway to the Middle East for Chinese products. Chinese products are already flooding Iranian markets at below market prices. Bi-lateral trade between Iran and China is already at $6 billion a year and $10 billion a year by 2006 (Iran's largest trading partner). [John Robb's Weblog]
