Geithner, In Beijing For Talks, Faces Struggle To Gain Chinese Cooperation In Iran Sanctions

U.S. Treasury Secretary Timothy Geithner is visiting Beijing this week looking for support for U.S. sanctions on Iran’s oil industry — but he is likely to be disappointed.

An oil worker at the oil separator facilities in Azadegan oil field in Iran, some 480 miles southwest of the capital, TehranBEIJING — U.S. Treasury Secretary Timothy Geithner is visiting Beijing this week looking for support for U.S. sanctions on Iran’s oil industry — but he is likely to be disappointed.

China buys almost one-third of Iran’s oil exports and has rejected the U.S. sanctions as a tool to rein in Tehran’s nuclear program. That sets Washington up for a public setback if the government of the world’s second-largest economy refuses to cooperate.

“China has no reason to go along with this,” said Wang Lian, an Iran expert at Peking University’s School of International Relations. “China does not want to be seen as helping the U.S. when China’s own interest is concerned.”

Geithner was due in Beijing for a dinner meeting Tuesday with Vice Premier Wang Qishan, his counterpart in a regular high-level U.S.-Chinese dialogue. Geithner is to meet Wednesday with Premier Wen Jiabao, Vice President Xi Jinping — in line to become China’s next leader — and Vice Premier Li Keqiang, another rising star.

U.S. officials say the talks also will touch on trade disputes and complaints about China’s currency controls that critics say keep its yuan undervalued and give its exporters an unfair advantage, distorting trade at a time when Washington and other governments are under pressure to bring down unemployment.

China’s trade surplus with the United States widened 24.2 percent to $17.4 billion in December, according to data released Tuesday.

Geithner also is due to visit Tokyo, another major buyer of Iranian oil, for talks after he leaves Beijing.

China has criticized U.S. sanctions on Iran, approved by President Barack Obama on New Year’s Eve, as improper and ineffective. Beijing supported U.N. sanctions on Iran’s nuclear program but says action should be multilateral.

The sanctions would target Tehran’s oil industry by barring financial institutions from the U.S. market if they do business with Iran’s central bank.

China’s oil imports “have nothing to do with the nuclear issue,” said a deputy foreign minister, Cui Tiankai, on Monday.

“We should not mix issues with different natures, and China’s legitimate concerns and demands should be respected,” Cui said.

Wang said Chinese opposition might be reinforced by Washington’s latest military strategy report published last week. It singles out Beijing as a power with the potential to affect the U.S. economy and security.

Industry analysts say that even if China agreed, it would face formidable challenges in trying to replace Iran as an oil source.

China’s fast-growing economy is the world’s biggest energy consumer and imports half its oil. Some 11 percent comes from Iran, or about 600,000 barrels per day in November, according to energy market analysts Argus Media.

Still, Geithner’s trip might not be wasted, because Washington is only starting a campaign to promote its sanctions, Wang said. He said China might face pressure to cooperate if other governments agree to comply.

“The U.S. is not wasting their efforts,” Wang said. “Pressuring China is what they can do, but it is fairly difficult to get China to stand on their side.”