US Secretary of the Treasury Timothy Geithner yesterday in Beijing appealed for Chinese cooperation on nuclear non-proliferation, as he sought Chinese help on the White House’s efforts to toughen sanctions on Iran.
Geithner met with Chinese Premier Wen Jiabao (溫家寶) later yesterday, ahead of Wen’s trip next week to top oil supplier Saudi Arabia, whose additional output would be crucial if China is to replace crude it normally sources from Iran.
Geithner emphasized Sino-US strategic as well as economic cooperation in a meeting yesterday with Chinese Vice President Xi Jinping (習近平), slated to become the next Chinese head of state.
“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,” he told a smiling Xi.
Geithner is in Asia to garner support for tougher US sanctions on revenues flowing to Tehran, which the US accuses of attempting to develop nuclear weapons. Iran says its nuclear program is for civilian uses.
US President Barack Obama authorized a law on New Year’s eve imposing sanctions on financial institutions that deal with Iran’s central bank, its main clearing house for oil export payments. The move would make it difficult for consumers to pay for Iranian oil.
China has backed UN Security Council resolutions calling on Iran to halt uranium enrichment activities, while working to ensure its energy ties are not threatened. As a permanent member of the council, China wields a veto.
However, it has said the US and the EU should not impose sanctions beyond the UN resolutions.
The EU is already committed to a ban on Iranian crude, but the US might face a tougher sell with China, Japan or India, the top three buyers of Iranian crude by country. Geithner heads to Tokyo after Beijing.
Chinese Foreign Ministry spokesman Liu Weimin (劉為民) repeated the country’s longstanding defense about its oil and trade ties with Iran.
“China is a major developing country and it has reasonable demand for energy,” Liu said at a regular news briefing. “Regarding this issue, we have repeatedly stated that China has normal and transparent energy cooperation with Iran, and that does not violate Security Council resolutions.”
“It is unreasonable for a country to impose its domestic laws as overriding international law and to demand that other countries enforce it. So China believes that normal energy cooperation and reasonable demand are unrelated to the Iran nuclear issue and should not be affected,” Liu said.
China, Iran’s largest oil customer taking about a fifth of its shipments, has already reduced crude purchases for this month and next month as it disputes contract pricing for Iranian crude shipments.
Japan will consider cutting back its Iranian oil purchases to secure a waiver from new US sanctions, a government source has said. Indeed, Japan has asked OPEC producers Saudi Arabia and the United Arab Emirates to supply it with more oil, Japanese Foreign Minister Koichiro Gemba said on Tuesday.
South Korea is also considering alternative supplies in case the US sanctions cut off Iranian shipments.
A boycott by other oil customers could potentially allow China to buy Iranian crude at a discount, reducing its payments to Tehran without forcing it to buy additional oil at a premium on world spot markets.