Beijing reacted furiously Wednesday to new US sanctions imposed on a Chinese bank over transactions with Iran, urging Washington to revoke them and saying it would lodge an official protest.
China's foreign ministry urged the United States to lift the sanctions on the Bank of Kunlun, which it said violated the "norms of international relations" and damaged relations between Beijing and Washington.
US President Barack Obama on Tuesday imposed new economic sanctions on Iran's oil export sector and on a pair of Chinese and Iraqi banks accused of doing business with Tehran.
Obama said the new measures underlined the United States' determination to force Tehran "to meet its international obligations" in nuclear negotiations, according to a statement released by the White House.
The US president accused the Bank of Kunlun and the Elaf Islamic Bank in Iraq of arranging transactions worth millions of dollars with Iranian banks already under sanctions because of alleged links to Tehran's weapons programme.
In a statement, China's foreign ministry expressed "strong dissatisfaction and firm opposition" to the US move, called it "groundless" and said it would officially protest the decision.
"Citing its domestic law, the US imposed sanctions on a Chinese financial institution, which seriously violates the norms of international relations and damages China's interests," the ministry said.
"China and Iran have normal state relations and carry out ordinary, open and transparent commercial cooperation in the energy and trade fields," it added.
"There is no connection with Iran's nuclear plans, no violations of United Nations' Security Council resolutions or other international norms and no damage to the interests of any third parties," the ministry said.
The banking dispute comes after Washington and Beijing clashed last month over proposed UN sanctions against Syria, which were vetoed by China and Russia, provoking criticism by the Obama administration.
The US has steadily worked to punish Iran over its nuclear development, which it has described as a key global security threat.
In Washington, State Department spokesman Patrick Ventrell emphasised the sanctions "taken were in response to the conduct of one financial institution. It was not taken against China, nor does it change the fundamental nature of our cooperation with China on Iran."
Ventrell added: "beforehand we were in discussion with the Chinese both here and in Beijing about this and we continue to coordinate directly."
Iran says it has a right to enrich uranium for civilian nuclear energy and research. Western powers, however, fear it is attempting to stockpile enough highly-enriched fuel to have a "break-out capability" to build a bomb.
China's statement also said that Beijing is cooperating with various parties, including the United States, to resolve the Iranian nuclear issue.
The latest sanctions came on the same day the US State Department branded Iran "an active state sponsor of terrorism" in its 2011 annual terrorism report.
Separately, the US Treasury Department said that Bank of Kunlun provided services to at least six Iranian banks that have been placed under US sanctions because of their alleged roles in Iran's weapons of mass destruction programs.
Bank of Kunlun declined to comment on the announcement to impose sanctions.