China has urged the US to rescind sanctions against a Chinese bank over its transactions with Iran, saying the move damaged China-US relations.
Ministry spokesman Qin Gang said in a statement on Wednesday that China expressed its strong dissatisfaction and firm opposition and would lodge an official protest with Washington.
"We ask the US to correct the mistake, withdraw its sanctions against Bank of Kunlun - which is controlled by a major Chinese oil company - and stop harming Chinese interest and hurting bilateral relations," Qin said.
The White House on Tuesday announced penalties against China's Bank of Kunlun and an Iraqi bank that the Obama administration says have helped Iran evade international sanctions. Kunlun will be unable to do business with any US banks.
A bill that will impose new sanctions on Iran's energy, shipping and financial sectors also is gaining strong congressional support as politicians seek to boost economic pressure in hopes of halting Tehran's suspected nuclear weapons program.
Founded as a municipal commercial bank in the far western region of Xinjiang, Kunlun is now controlled by state-owned China National Petroleum Corp., which invested more than 5.8 billion yuan ($A880 million) in the bank between 2009 and 2010.
Qin said China and Iran maintain normal relations and have open and transparent collaborations in energy and trade, none of which has anything to do with Iran's nuclear program nor violates international rules.
Qin repeated China's stance against nuclear proliferation.
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