The longer China holds out, the better treatment it gets from the West, which is hoping for sanctions that will likely do little to resolve the nuclear impasse anyway.

There are several reasons for Beijing not to impose meaningful sanctions.

Iran is China’s third-largest oil supplier and home to expanding Chinese energy and commercial enterprises. China and Iran also share a strong resentment of perceived American meddling in their domestic politics. The bond with Tehran helps counterbalance American interests in a region that some strategists in China consider part of its “grand periphery.”

Beijing has also led a charm offensive with Muslim countries since the Xinjiang riots in July 2009, partly in response to strong condemnations by top Iranian clerics of China’s administration of the restive western province.

Unlike the US and Europe, Beijing does not seem to see an urgent need to deal with the Iran nuclear issue. Trying to pressure Beijing by sharing Western intelligence on Iran is unlikely to have much effect.

Building an effective international coalition of countries – including Arab Gulf countries and those with Security Council membership – is a far better way to shape China’s Iran calculus.

Although Beijing would probably prefer to avoid an arms race in the Middle East, most Chinese analysts are unconvinced that Iran will be able to enrich uranium to weapons-grade quality anytime soon, or to weaponize it. Consider the fact that Chinese analysts questioned whether Pyongyang could make a nuclear bomb right up until North Korea’s first nuclear test in 2006.

Then there is the fact that Beijing does not appear to be afraid of an imminent Israeli airstrike on Iranian nuclear installations. Most Chinese analysts believe the US has both the motivation and strength to restrain its ally.

Finally, Beijing argues that sanctions on Iran are unlikely to work, and instead will backfire by inducing resistance instead of compliance. Beijing has indicated that it suspects that the West’s fixation on sanctions is part of a broader plan to promote a change of government in Tehran – regime change that China is loath to see anywhere.

Free Iran:  Not to mention the fact that it is to China’s (& Russia’s) interest that Iran continues to be a thorn in the side of the US.  So long as the US-Iran problems persist, China can negotiate better economic and political terms from both the US and Iran.