Timothy Geithner, the US treasury secretary, is in China to press Beijing to support tougher sanctions against Iran over its nuclear programme.
"We don't how far the Chinese leaders will go with pressure from Obama. I doubt if they will fully obey Washington. Stopping Iran from selling its oil on international markets is something very serious and life will become extremely difficult for Iranians and for the regime, but no one must expect Iran to crumble and capitulate."
- Sadek Zibakalam, a professor of politics at Tehran University
He is urging the largest Asian economy, which imports 22 per cent of Iran's oil, to cut Iranian oil imports.
He is also seeking to narrow differences between Washington and Beijing over trade and currency disputes.
But Geithner will likely face resistance from China, which disagrees with the US claim that its currency is undervalued.
On the last day of 2011, Barack Obama, the US president, signed a law that included measures to penalise foreign companies that do business with Iran's central bank.
The law allows the US to stop any institution that does not comply from accessing US financial markets.
This could have a major effect on Iranian oil revenues because the country's central bank processes around half of all those sales.
"There are some very serious economic problems in Iran. We're talking about an inflation rate of close to 40 per cent, a sharp drop in production, a pullout of investors in Iran's oil and gas fields, including the Chinese, corruption in the banking sector … sanctions are just adding on to [those problems]."
- Scott Lucas, a professor of American studies at Birmingham University
Mahmoud Ahmadinejad, the Iranian president, has condemned the measure, saying Iran's central bank is strong enough to defeat "enemy plans".
Whether China will be convinced by the US remains to be seen. Geithner will also be going to Japan for a similar mission.
So will the US be able to convince China to toughen its stance on Iran? Will business-savvy China put politics before trade with its main oil supplier? And what would this all mean for the global market?
Inside Story, with presenter Sami Zeidan, discusses with guests: Mehrdad Khonsari, a former Iranian diplomat and analyst at the Centre for Arab and Iranian Studies; Scott Lucas, a professor of American studies at Birmingham University; and Sadek Zibakalam, a professor of politics at Tehran University.
"Due to the sanctions on banking transactions, the Iranian government and businessmen have to depend on money changers, which are not reliable and increase the cost by 20-30 per cent. That has had a profound effect in aggravating the internal economic situation. Iran in theory will always find some customer to buy some of its oil but a serious drop in the sale of its oil to the level that it must sell will have a tremendous effect. That is what the government cannot find any remedy to, and that's why it threatens to block the Strait of Hormuz, something that militarily it is incapable of doing."
Mehrdad Khonsari, a former Iranian diplomat
Source: Al Jazeera