China defends Iran oil imports, still opposed to unilateral sanctions

Iranian president Mahmoud Ahmadinejad / CBS

(CBS/AP) BEIJING - China defended its imports of Iranian oil but wouldn't say Tuesday whether it might reduce them to avoid U.S. sanctions against Chinese banks as the U.S. tries to squeeze Iran financially.

Beijing says it has normal economic relations with Iran, and Foreign Ministry spokesman Liu Weimin said Beijing remains opposed to unilateral sanctions such as those being pushed by the U.S. to pressure Tehran over its nuclear program.

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"China imports oil from Iran through normal channels, which are transparent and do not violate U.N. resolutions and do not hurt other countries' interests," Liu said at a daily news conference.

Still, China's oil imports from Saudi Arabia, Angola and Russia have risen this year in an indication it is shifting away from Iranian sources. Calls to top Chinese refiner Sinopec rang unanswered Tuesday and the government's main economic planning agency, the National Development and Reform Commission, did not immediately respond to faxed questions on oil imports.

The Obama administration on Monday exempted India and six other governments from U.S. economic sanctions after they significantly reduced their imports of Iranian oil. This is in addition to the 11 other countries that the U.S. previously had exempted after they reduced oil purchases. Secretary of State Hillary Rodham Clinton gave the waivers to Belgium, Britain, the Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland, Spain and Japan on March 20, ensuring that their banks and financial institutions would not be placed under any penalties for 180 days.

That leaves China alone among major importers of Iranian oil without a U.S. waiver. It has until June 28 to reduce its consumption of Iranian oil or face the penalties, unless it receives a national security waiver.

China has in past bought around 20 percent of Iran's oil exports, making it one of Tehran's biggest customers alongside Japan and India,

U.S. officials said Iran's oil exports have declined from about 2.5 million barrels a day last year to between 1.2 and 1.8 million barrels a day, choking a key source of revenue for Iran, which remains defiant of international demands to prove that its nuclear program is peaceful.

[ScottyKu]

I just spewed coffee all over my computer. American sanctions on chinese banks? That's hilarious. How does that work? Do we stop borrowing money from them? Do we stop making those 300 million dollars a day interest payments on our debt? The mericans are playing a dangerous game. If you think Greece has caused some wild market swings, just wait until China simply doesn't show up at the monthly treasury bill auction.

[sjc_1]

The Chinese were buying more bonds than they were allocated through indirect means recently. I don't worry about them buying our bonds, I worry about them selling them at a discount on the open market. That would really put a dent in the bond auction.

[lesserof2evil]

You reap what you sow. It is so true.

[jnostromo]

When you go to bed with your enemy..you have no one to blame but yourself..

[sjc_1]

You can see sides forming for Cold War II. Russia, China, Iran, Syria, North Korea and anyone else who opposes the U.S. This is not a good situation, we need allies and Bush did so much to anger the world that it is hard to count on anyone again.

[Ketwhat]

This is a dangerous game. They are not likely to blink. The Chinese have been looking for opportunities to displace the US Dollar as the world's reserve currency. This may by their opportunity to have at least part of the world start clearing payments for oil in Yuan instead of Dollars. "The US Dollar is unreliable as it is used to hold the world hostage to American political interests. China will never intervene in your country's independence through your reliance on the Yuan."

[ScottyKu]

The US has a unique talent for shooting itself in the foot.

[I_follower]

China is a sovereign country, therefore, they can do whatever they wish in the terms of business. We the USA do business with the Saudis, Russia and China constantly, yet, we keep bashing them in the media. So, my point is, business is business, we can't have it both ways just because some of us still live in the 1980's "Rambo era"