MNI EXCLUSIVE: Iran Sanctions May Boost Yuan Use:China Advisor

By Iris Ouyang

     BEIJING (MNI) - China is not about to accede to U.S. demands to stop

importing oil from Iran, but the issue is unlikely to spoil trade talks between

the two countries, two advisors for the Chinese government told MNI, with one

adding that U.S. sanctions aimed at Iranian crude could promote the use of the

yuan.

     "China is unlikely to make much of a concession on this," Yu Miaojie, a

veteran trade expert who advises the finance and commerce ministries, said this

week, shrugging off concerns the issue would cloud this week's trade talks in

Beijing.

     "The U.S. needs a trade deal more than China does. Trump has to conduct

trade negotiations with Japan after trade negotiations with us, and he needs to

finish that before the end of December."

     Waivers of U.S. sanctions allowing eight countries to import Iranian oil

end on Wednesday, the day after the start of the 10th round of China-U.S.

Negotiations. Chinese Premier Liu He will lead a delegation to Washington next

week.

     China is the world's largest oil importer and the main purchaser of Iranian

crude.

     Mei Xinyu, researcher at the Ministry-of-Commerce-managed Chinese Academy

of International Trade and Economic Cooperation, agreed that Iran sanctions

would be kept separate from the talks.

     "It would complicate the current negotiations. Both sides are trying to

limit the talks purely to trade," he told MNI.

     China was a big country and could not be pressured by U.S. attempts to

impose its rules on other nations, Mei said. U.S. sanctions on Iran could even

help with the internationalisation of the yuan, as the Chinese currency could be

used for "cross-border pricing and clearing," he said.

     China's Ministry of Foreign Affairs said last week that Beijing opposes the

sanctions and U.S. jurisdictional overreach, saying China's cooperation with

Iran is reasonable, legal and must be respected and protected.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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