Daily Israel Report

Timothy Geithner Attempts to Persuade China on Iran

Timothy Geithner is having a hard time persuading China to join oil sanctions. The Gulf States could provide China reassurance.
By Amiel Ungar
First Publish: 1/12/2012, 6:50 AM

When a US Secretary of the Treasury visits China, the items on the agenda are usually the balance of trade, and the artificially undervalued China's Chinese currency.

This time around, however, the focus of Treasury Secretary Timothy Geithner's visit to China and other industrializing southeastern countries was to beseech them to at least reduce their dependence on Iranian oil and conform somewhat to the projected sanctions on the purchase of Iranian oil.

A second purpose of his visit was to meet Chinese Vice president Xi Jinping and Vice Premiers Wang Qishan and Li Keqgian. Xi is being groomed to succeed Hu Jintao in the top posts of party secretary and president of China, while Wang and Li are contending for the post of prime minister and responsibility for the Chinese economy.

Iran figured on top of the agenda as the US Treasury is the point agency in directing the sanctions campaign against Iran. It is not easy to convince the Chinese, who purchase 22% of Iran's petroleum, to drop their supplier.

The Americans are, however, pressing on with China as well as Japan and South Korea. The Chinese acknowledge Iran's suspicious behavior but are still arguing that the crisis can only be overcome by a dialogue.

Chinese Foreign Minister Zhai Jun visited Iran at the close of December and now Chinese Premier Wen Jiabao will take Zhai with him this weekend when he visits Saudi Arabia, the United Arab Emirates and Qatar.

Wen will visit Abu Dhabi to deliver an address on Chinese energy policy, but there is already speculation that the real purpose behind the visits is to sound out his hosts about providing a replacement for Iranian energy if China agrees to join the sanctions regime.

China will also seek to establish what the policy of the Gulf states really is. Saudi Arabia, for example, has been the most openly hostile to Iran whereas Qatar has taken a friendlier approach.