China’s ambassador to Iran Chang Hua says the two countries have agreed on new banking mechanisms that could facilitate bilateral trade although he insists that the initiatives would remain confidential to avoid the American sanctions imposed on Iran.

Hua told semi-official ILNA news agency on Monday that officials from Iran and China have been holding "regular meetings" to coordinate efforts that could facilitate banking and trade relations in the face of the US sanctions on Tehran.

He said the two sides have reached “some agreements” which they could not reveal any details about because of the sanctions.

The ambassador said it was better for both Iran and China to keep their banking ties confidential while insisting that banking issues were still the key obstacle in the was to strengthen the economic relations between the two countries.

Unconfirmed reports have shown that China, the top buyer of Iran’s oil over the years, has continued to import crude from Iran despite an outright ban imposed by the US on such trade since May 2019.

A main issue, however, has been how the Chinese could pay for the Iranian oil as Washington tightly monitors any transfers made into the Iranian accounts in major international currencies.

Hua was appointed as China’s envoy to Tehran only six months ago. The seasoned diplomat has been seen actively attending events and meetings in Tehran and other Iranian cities that could symbolize China’s commitment to strong relations with Iran even at a time of increased American pressure on the country.

Speaking to a gathering of businesses in Tehran earlier this month, Hua said US sanctions had effectively failed to hamper trade between Iran and China as the bilateral trade between the two reached a total of $20 billion in the first eight months of the Iranian calendar year ending in late November.

Hua said his country would continue to support efforts to preserve a landmark nuclear deal between Iran and world powers despite Washington’s decision last year to pull out of the deal.