China criticizes Iran sanctions as Merkel visits

Wen said Beijing might contribute to European bailout funds but made no financial commitment


BEIJING (AP) — China’s main ruling party newspaper criticized sanctions on Iran as German Chancellor Angela Merkel met Friday with President Hu Jintao after urging Beijing to press Tehran to avoid developing nuclear weapons.

Western efforts to pressure Iran with an oil embargo are “casting a shadow over the global economy,” said People’s Daily, the main Communist Party mouthpiece. It appealed to other governments to “keep calm and restrained and not escalate tensions.”

China has rejected sanctions. The world’s second-largest economy gets about 10 percent of its oil imports from Iran. Chinese analysts say an embargo could be damaging because Beijing would be hard-pressed to replace those supplies.

Merkel appealed Thursday to Beijing, the biggest buyer of Iranian crude, to help persuade Tehran to renounce the possible development of nuclear weapons. At an appearance with Premier Wen Jiabao, the German leader said sanctions were unavoidable.

Also Thursday, Wen said Beijing might contribute to European bailout funds but made no financial commitment.

On Friday, Hu told Merkel that Beijing wants to develop a “strategic partnership” and commercial relations with Germany, the official Xinhua News Agency reported. There was no mention of whether the leaders discussed Iran.

The European Union imposed an oil embargo on Iran last week and froze the assets of its central bank. In December, the United States said it would bar financial institutions from the U.S. market if they do business with Iran’s central bank.

The People‘s Daily commentary repeated previous Chinese arguments but the decision to publish it while Merkel was visiting suggested Beijing’s attitude might be hardening.

The message “is that China hopes the U.S. and Iran can sit down and talk, and try not to use military force to resolve the problem,” said Wang Lian, an Iran specialist at Peking University’s School of International Studies.

China depends on crude from Iran and other Gulf suppliers such as Saudi Arabia, so “if war broke out between the U.S. and Iran and the Strait of Hormuz were sealed off, China would be the first to suffer,” Wang said.

U.S. Treasury Secretary Timothy Geithner visited Beijing in January to lobby China to buy less Iranian oil. Chinese leaders did not respond publicly but officials said energy relations with Iran had no connection to its nuclear program.

On Thursday, Merkel appealed to Beijing to “make Iran understand that the world should not have another nuclear power.”

Merkel’s visit also is aimed at reassuring Beijing about Europe’s financial health following agreement this week on a treaty on government spending that its leaders hope will end their debt crisis and revive economic growth.

The 27-nation European Union is China’s biggest export market and Beijing’s stake in its financial health is growing as Chinese companies expand there. China’s biggest producer of construction equipment announced this week it was buying Germany’s Putzmeister, a maker of concrete pumps.

Merkel is the first of several European leaders to visit China this month for talks expected largely to focus on the economic crisis.

Wen said Thursday a resolution of Europe’s debt crisis is “urgent” and China might play a bigger role by contributing to the European Financial Stability Fund and the 500 billion euro ($650 billion) ESM, due to begin operation in July.

European leaders want China, with $3.2 trillion in foreign reserves, and other global investors help expand the bailout funds.

Merkel said her agenda also included “more sensitive topics” such as human rights and the rule of law but gave no details. She said she planned to raise complaints about Chinese market barriers to foreign companies.