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If the Chinese fail to captitulate on this point, Mrs. Clinton darkly hinted, the US would no longer restrain the Israelis, who might then launch their long-threatened air attack on Iran, which the US has emphatically vetoed over the past two years. At that point, the Iranians would try to interdict Gulf maritime traffic and close the strait of Hormuz, meaning that about a third of China’s oil could be cut off. (The other 20% comes from Saudi Arabia.)

Chinese firm agrees to develop Iranian gas reserve

China's state energy group CNPC has clinched a deal to develop phase 11 of Iran's South Pars gas project, and beef up its oil and gas operations in the Islamic Republic that holds one of the world's top oil and gas reserves, an industry official told Reuters.

CNPC will start drillings in the gas field as early as March to evaluate the reserves, after its initial overall development plan won Tehran's approval near the end of last year, pushing ahead the mega-project worth $4.7 billion after a preliminary pact was sealed last June.

"The real work will start as soon as after the Chinese New Year holiday," said the official familiar with CNPC's international operations.

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source[ /exnews]

Chinese New year is in four days. It doesn't appear that China has even considered to succumb from US pressure.

The admonishment from Clinton came on the same day the Pentagon announced more than $6 billion in arms sales to Taiwan, a move certain to infuriate Beijing and add a new complication to the U.S.-Chinese relationship.

Clinton, speaking at a leading French military academy in Paris, said that China and five other leading nations have been united to date in trying to dissuade Iran to halt uranium enrichment that they fear is aimed at acquiring nuclear weaponry know-how.

But now that China is balking at joining the others in a new round of United Nations sanctions, Clinton said, "China will be under a lot of pressure to recognize the destabilizing impact that a nuclear-armed Iran would have in the [Persian] Gulf, from which they receive a significant percentage of their own supplies."

She told an audience of military experts and officers at the Ecole Militaire that "we understand that right now it seems counterproductive to you to sanction a country from which you get so much of the natural resources your growing economy needs."

But she said Beijing "needs to think about the longer-term implications."

Clinton said an Iranian nuclear bomb would produce an arms race and would convince Israel that it faces an "existential threat. . . . All of that is incredibly dangerous."

But while many Chinese take delight in America's plight and would like to end the close embrace that has brought China such prosperity over the past two decades, they are falling prey to delusions of grandeur. The fact remains that as much as China may want to go it alone, it cannot. (See pictures of the global financial crisis.)

To begin with, it holds more than $1 trillion in U.S. assets, mainly in U.S. Treasuries. No other country or entity in the world could absorb those assets if China wanted to sell them, and with China's currency value pegged to the dollar, any massive sale would lead to a steep decline in the Chinese currency and economy. China's holding of U.S. debt is leverage only in a theoretical world where it could dump its U.S. assets or stop buying more. What's more, even a hobbled America is the world's largest economy and the most significant market for Chinese goods. In 2009, a supposedly bad year, Chinese exports to the U.S. were approximately $300 billion, about the same as in 2007. That is a vast source of income for China — and one that no other part of the world can provide.

The U.S., meanwhile, has been a source of billions of dollars in direct investment in China, from thousands of American companies big and small. While it's true that China doesn't need any one of these companies as much as each one needs China, China needs all of them and depends on them for everything from brand-name goods to know-how and capital. Beijing can't just snap its fingers and go it alone; its domestic economy is far too entwined with that of the U.S., its companies, its capital and its consumers.