China criticizes Iran sanctions as Merkel visits

[February 03, 2012]  BEIJING (AP) -- China's premier pledged to help Europe fight its debt crisis during a meeting Friday with German Chancellor Angela Merkel but a ruling party newspaper criticized sanctions on Iran and a human rights lawyer was blocked from meeting Merkel.

China is "willing to cooperate with Europe to fight the current crisis," said Premier Wen Jiabao at a meeting with Merkel and German businessmen in the southern business center of Guangzhou. The two leaders flew there Friday after talks in Beijing.

"Some people say this means China wants to buy Europe," Wen said. "China doesn't have this intention and doesn't have this ability."

On Thursday, Wen said Beijing might contribute to Europe's bailout funds, though he made no financial commitment. European leaders want China, with $3.2 trillion in foreign reserves, and other global investors to help expand the funds.

Merkel's visit was aimed at reassuring Chinese leaders about Europe's financial health, but she said her agenda also included human rights and other sensitive issues.

On Thursday, Merkel urged Beijing to help persuade Tehran to avoid developing nuclear weapons. The communist government has previously rejected sanctions.

The Communist Party newspaper People's Daily said Western efforts to pressure Iran with an oil embargo are "casting a shadow over the global economy." It appealed to other governments to "keep calm and restrained and not escalate tensions."

China gets about 10 percent of its oil imports from Iran and analysts say Beijing would be hard-pressed to replace them.

Also Friday, a lawyer who has defended dissidents, Mo Shaoping, said he was invited to a dinner Thursday with Merkel but police told him he could not attend. The dinner was to be followed by a private meeting with Merkel to discuss China's legal environment and lawyers who have been harassed by the government.

Mo said police cited the need to maintain stability ahead of a ruling party congress late this year. The event is a key part of a planned handover of power to younger leaders.

On Friday, Hu told Merkel that Beijing wants to develop a "strategic partnership" and economic ties with Germany, the official Xinhua News Agency reported. There was no word on whether they discussed Iran or human rights.

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.

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

In Guangzhou, Wen also tried to allay concern about Beijing's limits on exports of rare earths needed by makers of mobile phones and other high-tech goods, saying China "has no discrimination when it comes to foreign companies."

Businesspeople at the event included CEOs of Volkswagen AG and Siemens AG and the chairman of Chinese personal computer manufacturer Lenovo Group.

China produces the bulk of the world's rare earths and has alarmed manufacturers by limiting exports while it tries to build up a domestic industry of companies that use them to produce lightweight magnets and other goods.

It was unclear whether Wen's reference to foreign companies meant those abroad or foreign-financed operations in China.

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 United States 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 United States and Iran and the Strait of Hormuz were sealed off, China would be the first to suffer," Wang said.

[Associated Press; By JOE McDONALD]

AP researchers Zhao Liang and Yu Bing and AP writer Christopher Bodeen contributed.

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