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Update: According to Haaretz:

Ahmadinejad said on Tuesday Iran was now prepared to send low-enriched uranium (LEU) abroad before getting reactor fuel back. Before, Tehran insisted on small swaps on its own soil.

That would defeat the draft plan's purpose of reducing Iran's total LEU reserve below the quantity required to set off an atomic bomb, if it were refined to high purity. As noted below, China is perhaps the only major power that Iran could rely upon to conduct an offshore swap. Wonder if China will rise to the bait. CH 2/09/10

Original post:

During a February 9, 2009 press briefing, a spokesperson for Iran’s Ministry of Foreign Affairs praised China’s ever more important role on the world stage.

He also stated, according to Phoenix TV’s correspondent on the scene:

If China was willing, Iran could consider conducting the nuclear fuel exchange through China.

The nuclear fuel exchange refers to a proposed confidence-building deal between Iran and the West that has basically turned into a confidence-demolition deal.

The IAEA proposed that Iran ship most of its declared low-enriched uranium (LEU) to Russia for enrichment to 20%; then the Russians would ship the fuel to France for fabrication into rods and return the rods to Iran so it could make medical isotopes in its Tehran Research Reactor.

Theory was that Iran would get out of the uranium enrichment business and the world could find something else to worry about.

However, U.S. engagement with Iran, like so many other nice things the Obama administration had planned, went off the tracks, thanks in part to the large anti-government demonstrations following last year’s dubious presidential election in Iran.

Understandably, the Iranians worried that, if they sent their uranium overseas to Russia (which has started to side with the U.S. on Iran issues) and France, they might never get it back, and they reportedly proposed some deal that would involve incremental exchanges of enriched material for their LEU.

The result was a lot of huffing and puffing from the West about Iranian bad faith and a concerted drive for new Iran sanctions.

China is the only member of the P5 (Security Council + Germany) clearly resistant to new sanctions.

The Iran offer can be seen as 1) an effort to get China involved on its side 2) a recognition that China is the one party that would reliably return their uranium.

The offer didn’t come up in China’s MOFA Feb. 9 presser. On the Iran issue, the Chinese spokesperson stated:

We hope and support that the concerned parties can achieve a unanimity of views on the IAEA’s draft agreement for supply of fuel to the Teheran Research Reactor. This would contribute to the favorable resolution of the Iran nuclear question.

The Chinese, like the rest of the world, are probably waiting to see if the Iranian government can keep the lid on the demonstrations everybody’s hyping for February 11.

If the Iranian government works its authoritarian magic on the demonstrators, I believe China will maintain its current position of negotiations and no sanctions. If the wheels come off and Iran heads for a period of serious political instability, China will simply keep its head down until the clear winner emerges.

China Matters tries to resist the urge to engage in fine de siecle woolgathering, but to me the Iran kafuffle represents the further poodleizing of France and Germany. Ever since the Suez crisis in 1956 the UK has recognized that its only hope of punching above its weight in world affairs was to cleave to the United States more closely and sincerely than any other power.

Now Germany and France see lining up with the US on Iran as a way to assert their claim to an outsized share of world political and moral leadership.

Problem for Merkel and Sarkozy is, it was one thing to line up with the US, the world’s dominant military and economic power at the height of the Cold War. It’s a different thing to for fading Western powers to try to ignore the shift of economic and military gravity away from the North Atlantic with an anti-Iran rave-up.

It seems to me that the lesson that China and India will draw from the Iranian uranium farce is that the world’s business is not being run properly by a politically stymied superpower abetted by second-rate Europowers struggling for relevance.

Coincidentally, the Guardian weighed in on Europe’s bleak prospects on February 8:

Since EU leaders last met in Brussels before Christmas, the mood has soured. For the Europeans who claimed for two years to be leading the world on climate change, the global warming summit in Copenhagen was the gamechanger, a moment when the global balance of power tilted and relegated the EU to the second division.

"What we saw in Copenhagen is that Europe does not count," Daniel Gros, director of the Centre for European Policy Studies, told a conference of Brussels thinktanks.

"For good or for ill," a senior European official told the Guardian, "the message that Copenhagen sent is that Europe is not at the table. The fact of the matter is that Europe's leaders were taking a coffee and [Barack] Obama visited them at the coffee break. But he negotiated with others."

The Europeans are struggling to recover from that blow.

For the past 18 months, the British foreign secretary, David Miliband, has been warning that Europe faces being sidelined in a "G2" world run by the US and China unless the EU steps up.

Miliband's worst fears materialised when Obama held his press conference at the end of Copenhagen and deleted Europe from the script.

"If the G2 world was approaching, suddenly there it was," said the diplomat. "A seminal and symbolic moment."

Perhaps pledging to be the US’s BFF on Iran is not going to extract Europe from its geopolitical cul de sac.