LEAD: US treasury chief to discuss economy, Iran in China

Jan 10, 2012, 6:02 GMT

Beijing - US Treasury Secretary Timothy Geithner planned to open talks in China on Tuesday on global economic problems and growing worries about Iran's nuclear programme.

Discussions about increasing pressure on Iran as well as economic issues were on the agenda. Measures aimed at Iran's central bank, which processes Iran's income from oil exports, would also be discussed, the Treasury Department said.

Geithner was to meet with Vice Premier Wang Qishan late Tuesday and with Premier Wen Jiabao and other economic officials on Wednesday.

The discussions were expected to include complaints that China's undervalued currency erodes the US manufacturing sector.

The official China Daily said Geithner's visit was 'unlikely to achieve big breakthroughs' in either bilateral economic differences or the push for stronger sanctions against Iran.

'The possibility is slim that there will be concrete progress,' the newspaper quoted Niu Xinchun of the China Institute of Contemporary International Relations, a government think-tank, as saying of Geithner's expected talks on China's trade surplus and economic rebalancing.

China opposed new US sanctions against Iran and favoured the resumption of international dialogue on Iran's nuclear programme, Foreign Ministry spokesman Liu Weimin said on Monday.

China defended Iran's right to peaceful use of nuclear technology but urged it to 'fulfil its due international obligations' on non-proliferation of nuclear weapons, Liu said in response to reports that Iran was preparing to use a new uranium enrichment facility.

He said China's extensive economic links with Iran were 'normal, open and transparent' and had not breached UN sanctions.

But Liu said this week's bilateral talks between China and the United States would help tackle the 'severe challenges' for the global economy.

'Further strengthening of China-US economic and trade cooperation will be helpful in meeting these challenges,' he said.

Geithner is scheduled to travel to Japan on Thursday to meet with Prime Minister Yoshihiko Noda and Finance Minister Jun Azumi.

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