China Defends Iran Oil Trade Despite US Push

US Treasury Secretary Timothy Geithner and Chinese leaders pledged Wednesday to enhance cooperation to advance the global economic recovery, but still left the Iran sanctions dispute unresolved.

Geithner met Chinese Premier Wen Jiabao and Vice President Xi Jinping Wednesday amid escalating international tensions over Iran’s nuclear ambitions a day after the White House accused Tehran of ”blatant disregard for its responsibilities.”

Washington is ”in the early stages of a broad global diplomatic effort to take advantage of this new legislation to significantly intensify the pressure on Iran,” a senior US official told journalists in Beijing Wednesday.

However, China Wednesday said it was ”not reasonable” to expect it to comply with what it says are ”unilateral” sanctions imposed by the US. ”Iran is also an extremely big oil supplier to China, and we hope that China’s oil imports won’t be affected, because this is needed for our development,” Chinese Vice Foreign Minister Zhai Jun told a news conference.

Chinese foreign ministry spokesman Liu Weimin also defended China’s oil trade with Iran, saying Beijing’s energy needs do not have anything to do with the Tehran’s nuclear issue and should not be affected.

"On economic growth, on financial stability around the world, on non-proliferation, we have what we view as a very strong, cooperative relationship with your government and we are looking forward to building on that,” said Geithner as he met the vice president.

Xi said Geithner’s visit is ”significant” for the stability and development of bilateral relations in 2012, according to the Xinhua News Agency.

Jia Jinjing, an independent economist based in Beijing, told the Global Times that the main topics in Sino-US trade have not changed, such as currency and high-tech exports; but, the two countries need to discuss the old topics when faced with new situations, referring to US sanctions on Iran.

"The US dollar is the world’s default currency mainly because oil-rich countries use it as the currency in settlement. Once the unrest in Iran affects the crude and creates serious waves in the market, the US dollar can not escape suffering, which, of course, could have influence on Sino-US trade, even the world economy,” Jia said.

Han Xiaoping, chief information officer of Chinese energy website china5e.com, told the Global Times that sanctions imposed on Iran are happening too soon for China, which buys 20-22 percent of the Islamic state’s crude oil.

"China’s National Petroleum Reserve (NPR) can only cover for about a month while other countries’ NPR, such as Japan, would not find any difficulties in dealing with an oil-supply shortage for more than three months. China has to move fast to assure alternatives in case the unrest affects its oil trade with Iran,” Han said.

Han pointed out Premier Wen’s trip, starting on Saturday, to top oil supplier Saudi Arabia could be important if China turns elsewhere for crude. ”Reducing crude purchases from Iran could actually benefit China’s energy reform in the long run. We are too dependent on the overseas markets."