Following pressure from the U.S. and its allies, China is pulling back from its support for Iran. The Industrial and Commercial Bank of China has backed out of investing in a pipeline that would run from Iran through Pakistan, the Los Angeles Times reports:
Pakistani officials confirmed Wednesday that Industrial and Commercial Bank of China had withdrawn from plans to head a consortium that would finance the $1.6-billion Pakistani portion of the cross-border pipeline, apparently over concern that the bank could be excluded from the U.S. economy.
The move suggests that even Chinese companies, which have staunchly resisted U.S. and European efforts to punish Iran for its nuclear program, are beginning to bend to the sanctions on Tehran. China’s unwillingness to fully cooperate had been one of the greatest challenges to the international effort to put economic pressure on Iran.
China’s decision is a setback for the Pakistani government, which fears that dire energy shortages could lead to civil unrest as well as economic strain.
Pakistani officials said they would press ahead with the project, which would deliver more than 750 million cubic feet of natural gas per day from Iran’s South Pars field. They said they would find replacement financing.
A consortium led by the Industrial and Commercial Bank of China (ICBC) has ‘run away’ from providing financial advisory services for the Iran-Pakistan gas pipeline project apparently because of the US opposition to the plan and forced the government to look for alternative financing options.
“It is apprehended that a probable reason for not signing the agreement (to act as financial adviser for the project) till date could be geopolitical situation in the region,” a summary presented to the Economic Coordination Committee (ECC) of the cabinet on Tuesday said.
A meeting of the ECC presided over by Finance Minister Dr Abdul Hafeez Shaikh was informed by Petroleum Secretary Mohammad Ejaz Chaudhry that the Chinese consortium’s leader had “run away from the project”.