Geithner may discuss Iran sanctions on Beijing trip

NEW YORK / BEIJING - US Treasury Secretary Timothy Geithner will arrive in Beijing on Jan 10 for a two-day visit, the US Treasury Department said on Wednesday.

While in Beijing, Geithner will meet Vice-Premier Wang Qishan on Tuesday, and Premier Wen Jiabao, Vice-President Xi Jinping and Vice-Premier Li Keqiang on Wednesday to discuss measures to promote continued economic growth, the Treasury said.

The Treasury statement said Geithner would also discuss the possibility of increasing pressure on Iran, including financial measures targeting the Central Bank of Iran.

On Saturday, US President Barack Obama signed into law new sanctions against financial institutions dealing with Iran's central bank, the main conduit for the country's oil revenues.

On Wednesday, Foreign Ministry spokesman Hong Lei reiterated China's position on Iran, saying it prefers dialogue rather than sanctions.

Hong said China opposes one country placing its domestic law above international law and imposing unilateral sanctions on other countries.

The European Union and the United States on Wednesday tightened their sanctions on Iran, with diplomats in Brussels saying a preliminary agreement had been reached on an EU embargo of Iranian oil.

Washington hailed the agreement, saying it was "the result of lots of consultations" with its EU allies.

Fan Jishe, a researcher from the Institute of American Studies at the Chinese Academy of Social Sciences, said US sanctions on Iran may have a negative impact on other countries.

"It will not only harm the interests of China but also US allies including France and Japan's interests in Iran," he said.

"So Geithner's visit to Asia will try to balance these countries' interests in Iran."

He added that China would require the US to ensure its legal communication with Iran.

The meeting comes at a critical time because both the US Republican and Democratic parties have sent out signals of concern about China, said Yukon Huang, a senior associate at the Carnegie Endowment for International Peace, a foreign policy think tank in Washington.

"They (the Republicans and Democrats) are worrying that China has not been playing transparently in terms of trade and labor relations," Huang said.

There could be some "potential tension that both sides have to manage carefully", said Huang, a former country director for the World Bank in China.

Geithner's visit to Beijing comes ahead of Xi's visit to Washington, due to take place in February.

"Geithner has to figure out which messages can be mutually tolerable for both sides that will make it a success," said Huang.

A statement from the US Treasury Department said Geithner will "discuss the state of the global economy, policies to strengthen global growth and other economic issues of mutual importance".

Fan from the Chinese Academy of Social Sciences said it is natural for Geithner to visit China at such a time as Obama's successful re-election strongly relies on his economic policies.

"If the Republicans take over, it means the Democrats performed badly in terms of economic policy," he said, adding that better economic ties with China will help tackle current US economic problems.

Huang said the Chinese currency issue will likely be one of those raised during Geithner's visit.

"The two currencies that have not depreciated in the past year in Asia are China's yuan and the Japanese yen," said Huang.

After Beijing, Geithner will visit Tokyo on Jan 12 to meet Japanese Prime Minister Yoshihiko Noda and Finance Minister Jun Azumi to discuss similar issues.

"With the instability and volatility in Europe, it could actually be the case that China does not have a trade surplus in the coming year," Huang said.

Huang said tensions on government subsidies for renewable energy and solar panel companies could be a contentious issue for both sides.

"It has become an embarrassment for the US because its subsidies for these manufacturers did not prevent some of them from going bankrupt," Huang added.

China Daily