US presses China over Iran oil imports

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US officials have expressed optimism China is open to working with Washington in its efforts to get major oil importers to reduce dependence on supplies from Iran.

The officials spoke after US Treasury secretary Tim Geithner arrived in Beijing as part of a lobbying effort which Washington hopes will add to the pressure on Tehran to curb its expanding nuclear programme.

“We are in the early stages of a broad global diplomatic effort to take advantage of this new legislation to significantly intensify the pressure on Iran. We are telling the [Chinese] what’s important to us and they are listening,” said a senior US official in Beijing after Mr Geithner met with Chinese officials on Wednesday. “We have a reasonable shot at getting a number of countries to wean themselves off Iranian oil.”

Mr Geithner, who will fly on to Japan on Thursday, is trying to convince Beijing and Tokyo, two of the largest buyers of Iranian oil, to diversify their energy sources. Washington is laying the ground for the use of new sanctions against Iran passed by Congress in response to an expansion in Iran’s nuclear programme, which western governments see as a further step towards nuclear weapons.

The bill gives the US president the power to ban financial institutions that are found to have done business with the Central Bank of Iran from operating in the US. This would potentially apply to Japanese and Chinese banks as they handle payments for Iranian oil.

The US measures would come on top of UN sanctions that have been in place since 2010 which bar foreign firms from financing or building oil infrastructure in Iran.

Iran accounted for about 11 per cent of China’s crude oil imports last year, up from nine per cent in 2010. Media reports say that China’s booked cargoes from Iran for January indicate a temporary fall in imports amid a pricing dispute.

“On economic growth, on financial stability around the world, on non-proliferation, we have what we view as a very strong co-operative relationship with your government and we are looking forward to building on that,” Mr Geithner told Xi Jinping, China’s vice-president, who is expected to succeed Hu Jintao as president later this year.

The optimistic tone from the US comes as Wen Jiabao, China’s premier, is scheduled to visit the Middle East this weekend on a tour observers believe could give him the opportunity to explore alternative oil supplies.

However, Chinese official statements offered little evidence of a changed position. China’s state media on Wednesday reiterated Beijing’s long-held opposition to sanctions.

Beijing appealed to Iran and the International Atomic Energy Agency on Wednesday to emphasise co-operation and “clarify pending issues in the Iranian nuclear programme as soon as possible”, but also defended China’s oil trade with the country.

“China’s regular demand for energy does not have anything to do with the Iranian nuclear issue and should not be affected,” said Liu Weimin, foreign ministry spokesman. “To place one country’s domestic law above international law and press others to obey is not reasonable.”

The Global Times, a nationalist tabloid owned by People’s Daily, the Communist party’s mouthpiece, dismissed the US mission as a sign of Washington’s “Big Power mindset” and saying China should ignore it.

However, some minor changes in China’s ties with Iran may be afoot. Reuters has been reporting that Chinese oil imports from Iran have started sliding this month and could fall further in February due to a pricing dispute.

Sun Zhe, a US relations expert at Tsinghua University, said China might further reduce oil imports from Iran but the US should not place too high hopes on that.

In addition, experts believe that Beijing might agree to reduce oil payments to the Central Bank of Iran if pressured by Washington over Chinese state companies allegedly in violation of the UN sanctions.

Additional reporting, Leslie Hook in Beijing

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