Iran carmaker snubs China move

Tehran: Chinese moves to cut back banking business with Iran are affecting cooperation between China's Chery Automobile Co and Iran Khodro, the Middle East's biggest carmaker, its head was quoted as saying on Friday.

Due to US pressure over Tehran's disputed nuclear plans, Chinese banks have reduced cooperation with their counterparts in the Islamic Republic, an Iranian Foreign Ministry official reportedly said early this month.

The United States has urged international banks and companies to stop dealing with or investing in Iran.

Chery, a mid-sized but fast-growing Chinese car maker, said last August it had agreed to set up a $370 million assembly plant in Iran with two foreign partners, targeting Iran and neighbouring markets.

Asked whether Chinese sanctions on "some" Iranian banks were having a negative impact on cooperation with Chery, Iran Khodro President and Chief Executive Manouchehr Manteghi told the Isna news agency:

"This issue has had an impact because when you want to give a part of your market to another country, you expect more friendly behaviour from the other side and when they take such actions it creates some question marks for us."