US Treasury Secretary Seeks Chinese Support for Iran Oil Sanctions

Posted January 11th, 2012 at 5:35 am (UTC-5)
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U.S. Treasury Secretary Timothy Geithner met with Chinese officials in Beijing on Wednesday for talks that were expected to focus on improved economic ties and U.S. sanctions against Iran’s nuclear program.

During a meeting with Chinese Vice President Xi Jinping, Geithner said he looked forward to building on the “very strong, cooperative relationship” with China on global economic growth and nuclear non-proliferation.

China’s state-run Xinhua news agency said the two sides pledged to increase cooperation on boosting the recovery of the “very complex and grim” global economic situation.

But Geithner’s main task is convincing China to go along with U.S. sanctions against Iran’s oil industry. Progress on the issue seems unlikely, as China buys almost one-third of Iran’s oil exports and has repeatedly opposed U.S. sanctions as a tool to rein in Iran’s nuclear program.

Geithner also met Wednesday with Premier Wen Jiabao and and other Chinese officials. Later Wednesday, he is expected to head to Japan – another major consumer of Iranian oil.

Geithner is in Asia to lobby international support for recent U.S. legislation that aims to reduce Iran’s oil revenue by imposing sanctions against those who do business with Iran’s Central Bank.

Washington hopes the economic measures will convince Tehran to abandon its nuclear development program, which Western governments suspect is aimed at making nuclear weapons. Tehran denies the charge.

Some analysts say the effect of the sanctions will be severely weakened without the support of China – the world’s second largest economy.

Although China did not veto U.N. sanctions against Iran’s nuclear program, it opposes the much harsher U.S. measures, arguing that they are illegal and could lead lead to war.

U.S. officials say Geithner is also expected to urge Chinese officials to ease controls that Washington says keep its yuan currency undervalued. Analysts say a lower yuan gives Chinese exporters an unfair price advantage and has led to a wide U.S. trade deficit with China.