China Presses Iran to Rein in Houthi Attacks in Red Sea

Chinese officials have asked their Iranian counterparts to help rein in attacks on ships in the Red Sea by the Iran-backed Houthis, or risk harming business relations with Beijing, four Iranian sources and a diplomat familiar with the matter said.
The discussions about the attacks and trade between China and Iran took place at several recent meetings in Beijing and Tehran, the Iranian sources said, declining to provide details about when they took place or who attended.
"Basically, China says: 'If our interests are harmed in any way, it will impact our business with Tehran. So tell the Houthis to show restraint'," said one Iranian official briefed on the talks, who spoke to Reuters on condition of anonymity.
The attacks, which the Houthis say are in support of Palestinians in Gaza, have raised the cost of shipping and insurance by disrupting a key trade route between Asia and Europe used widely by ships from China.
The Chinese officials, however, did not make any specific comments or threats about how Beijing's trading relationship with Iran could be affected if its interests were damaged by Houthi attacks, the four Iranian sources said.
While China has been Iran's biggest trading partner for the past decade, their trade relationship is lopsided.
Chinese oil refiners, for example, bought over 90% of Iran's crude exports last year, according to tanker tracking data from trade analytics firm Kpler, as US sanctions kept many other customers away and Chinese firms profited from heavy discounts.
Iranian oil, though, only accounts for 10% of China's crude imports and Beijing has an array of suppliers that could plug shortfalls from elsewhere.
The Iranian sources said Beijing had made it clear it would be very disappointed with Tehran if any vessels linked to China were hit, or the country's interests were affected in any way.
But while China was important to Iran, Tehran also had proxies in Gaza, Lebanon, Syria and Iraq, besides the Houthis in Yemen, and its regional alliances and priorities played a major role in its decision making, one of the Iranian insiders said.
Asked for comment about meetings with Iran to discuss the Red Sea attacks, China's ministry of foreign affairs said: "China is a sincere friend of the countries of the Middle East and is committed to promoting regional security and stability and seeking common development and prosperity."
"We firmly support Middle Eastern countries in strengthening their strategic independence and uniting and collaborating to resolve regional security issues," it told Reuters.
Iran's foreign ministry was not immediately available to comment.
AXIS OF RESISTANCE
Military strikes by US and British forces on Houthi targets in Yemen this month have failed to stop attacks on shipping by the group, which controls a large chunk of Yemen including the capital Sanaa and much of the country's Red Sea coast by the Bab al-Mandab strait.
The Houthis first emerged in the 1980s as an armed group funded and trained by Iran and are part of its anti-West, anti-Israel "Axis of Resistance".
A senior US official said Washington had asked China to use its leverage with Iran to persuade it to restrain the Houthis, including in conversations Secretary of State Antony Blinken and National Security Advisor Jake Sullivan had this month with senior Chinese Communist Party official Liu Jianchao.
A senior Iranian official said while Chinese officials discussed their concerns thoroughly in the meetings, they never mentioned any requests from Washington.
On Jan. 14, China's foreign minister Wang Yi called for an end to attacks on civilian ships in the Red Sea - without naming the Houthis or mentioning Iran - and the maintenance of supply chains and the international trade order.
Victor Gao, chair professor at China's Soochow University, said China, as the world's biggest trading nation, was disproportionately affected by the shipping disruption and restoring stability in the Red Sea was a priority.
But Gao said Beijing would view Israel's treatment of the Palestinians as the root cause of the Red Sea crisis and would not want to publicly ascribe blame to the Houthis.
A US State Department spokesperson declined to comment when asked about bilateral Iran-China discussions on the issue.
A diplomat familiar with the matter said China had been talking to Iran about the issue but it was unclear how seriously Tehran was taking Beijing's advice.
Two officials in the Yemeni government, an enemy of the Houthis, said they were aware that several countries, including China, had sought to influence Iran to rein the Houthis in.
Analysts Gregory Brew of Eurasia Group and Ali Vaez of the International Crisis Group said China had potential leverage over Iran because of its oil purchases and because Iran was hoping to attract more Chinese direct investment in future.
However, both said China had so far been reluctant to use its leverage, for several reasons.
"China prefers to free-ride on the US safeguarding freedom of navigation in the Red Sea by bloodying the Houthis' nose," said Vaez, adding that Beijing was also aware that Iran did not have total control over its Yemeni allies.
INFLUENCE NOT ABSOLUTE
Houthi spokesman Mohammed Abdulsalam said on Thursday that Iran to date had not conveyed any message from China about scaling back attacks.
"They will not inform us of such a request, especially since Iran's stated position is to support Yemen. It condemned the American-British strikes on Yemen, and considered Yemen's position honorable and responsible," he said.
The four Iranian sources said it was unclear whether Iran would take any action following the discussions with Beijing.
The stakes are high for Iran as China is one of the few powers capable of providing the billions of dollars of investment Tehran needs to maintain the capacity of its oil sector and keep its economy afloat.
Yet while there are robust economic ties between China and Iran, Beijing's influence on Tehran's geopolitical decisions was not absolute, one of the Iranian insiders said.
Some within Iran's ruling establishment have questioned the value of the partnership with Beijing, pointing to relatively low non-oil trade and investment volumes since China and Iran signed a 25-year cooperation agreement in 2021.
Iranian state media says Chinese firms have only invested $185 million since then. State media also said last year that Iranian non-oil exports to China fell 68% in the first five months of 2023 while Iran's imports from China rose 40%.
Two of the Iranian insiders said while China could not be ignored, Tehran had other priorities to consider and its decisions were shaped by a complex interplay of factors.
"Regional alliances and priorities as well as ideological considerations contribute significantly to Tehran's decisions," one of the people said.
The second person said Iran's rulers had to adopt a nuanced strategy when it came to the Gaza war, as well as the Houthi attacks, and that Tehran would not abandon its allies.
Iran's role as leader of its "Axis of Resistance" - which includes the Houthis, Lebanon's Hezbollah, Hamas and militias in Iraq and Syria - had to be balanced against avoiding getting sucked into a regional war over Gaza, the Iranian sources said.
Tehran's messaging to - and about - the Houthis required a measure of deniability about the extent of its control over them - but also an ability to claim some credit for their anti-Israel actions, one of the people said.

Billionaire Elon Musk plunged on Tuesday into the congressional debate over President Donald Trump's sweeping tax and spending bill, calling it a "disgusting abomination" that will increase the federal deficit.

Several fiscally conservative Republicans in the US Senate supported the views Musk expressed in social media posts, which could complicate the bill's path to passage in that chamber.

"I'm sorry, but I just can't stand it anymore," Tesla and SpaceX CEO Musk wrote in a post on his social media platform X. "This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination."

He added: "Shame on those who voted for it: you know you did wrong. You know it."

Musk's comments hit a nerve. Republican deficit hawks have expressed concerns about the cost of the bill, which would extend the 2017 tax cuts that were Trump's main legislative accomplishment, while boosting spending on the military and border security.

The House of Representatives passed it by one vote last month, after the nonpartisan Congressional Budget Office said the measure would add $3.8 trillion to the federal government's $36.2 trillion in debt.

The Senate, also controlled by Trump's Republicans, aims to pass the "One Big Beautiful Bill Act" in the next month, though senators are expected to revise the House version.

Republicans on the Senate Finance Committee, which oversees tax policy, are due to meet with Trump at the White House on Wednesday afternoon to discuss making the bill's business-related tax breaks permanent, according to Senator Steve Daines, a panel member. Analysts have warned that such a move would greatly increase the measure's cost.

Republican Senate Majority Leader John Thune said he disagreed with Musk's assessment about the cost of the bill and stood by the goal of passage by July 4.

"We have a job to do - the American people elected us to do. We have an agenda that everybody campaigned on, most notably the president of the United States, and we're going to deliver on that agenda," the South Dakota lawmaker told reporters.

Republican House Speaker Mike Johnson also dismissed Musk's complaints, telling reporters, "my friend Elon is terribly wrong."

TEST OF INFLUENCE

Musk's loud opposition to a bill that Trump has urged Republicans to pass presents a test of his political influence a week after leaving his formal role in the administration as a special government employee with the Department of Government Efficiency came to an end. As DOGE chief, he upended several federal agencies but ultimately failed to deliver the massive savings he had sought.

The richest person in the world, Musk had spent nearly $300 million to back Trump's presidential campaign and other Republicans in last year's elections. But he has said he would cut his political spending substantially while returning to his role as Tesla CEO.

The White House dismissed Tuesday's attack, just as Trump dismissed earlier Musk complaints about the legislation.

"Look, the president already knows where Elon Musk stood on this bill," spokeswoman Karoline Leavitt said at a White House briefing. "It doesn't change the president's opinion. This is one big, beautiful bill, and he's sticking to it."

REPUBLICAN DISAGREEMENTS

Senate Republicans were divided about the bill even before Musk's missives. Deficit hawks are pushing for deeper spending cuts than the $1.6 trillion over a decade in the House version, while another coalition of rural-state Republicans are pushing to protect the Medicaid healthcare program for low-income Americans.

One of the hawks, Senator Mike Lee, called on party members to use the Trump bill and future spending measures to reduce the deficit.

"We must commit now to doing so, as this is what voters justifiably expect - and indeed deserve - from the GOP Congress," the Utah Republican said on X while reposting Musk's message.

Republicans have a 53-47 seat majority in the Senate and can afford to lose support from no more than three members, if they expect to pass the legislation with a tie-breaking vote from Vice President JD Vance by a July 4 deadline.

Another hardliner, Senator Ron Johnson, predicted that lawmakers would not be able to meet the deadline and secure an adequate number of cuts.

Lee and Johnson are among at least four Senate hardliners demanding that the bill be changed to restrict the growth of the debt and deficit.

The faction of party lawmakers determined to limit spending cuts to project Medicaid beneficiaries and business investments in green energy initiatives is of similar size.

"I certainly have an interest in making sure people with disabilities are not harmed. But also, there's the broad issue of how does it affect hospital reimbursements," Senator Jerry Moran told reporters.

"There's a set of my colleagues who are pushing to do more. And so, it turns on how do you get the votes to pass a bill," the Kansas Republican said.

Other Senate Republicans said lawmakers may have to look elsewhere to boost savings, including the possibility of leaving Trump's much touted tax break proposals for tips, overtime pay and Social Security benefits for later legislation.

"Those are all Democrat priorities. I'm not sure why we shouldn't be doing that in a potential bipartisan bill to create headspace for this bill," said Republican Senator Thom Tillis.

China Presses Iran to Rein in Houthi Attacks in Red Sea