A Chinese investor at a securities brokerage house on Feb. 3. A handful of Chinese companies and individuals are affected by U.S. sanctions against Iran. (Wu Hong/European Pressphoto Agency)

China said Monday it had lodged a formal protest with the United States over a decision to impose new sanctions targeting Iran, which affect a handful of Chinese companies and individuals. 

The state-run Xinhua news agency said the sanctions cast a shadow over the prospects for a peaceful settlement of the Iranian nuclear issue and called them a “ticking time bomb” for peace and stability in the entire Middle East.

At the same time, though, Beijing’s concerns about the new Trump administration appear to have been somewhat calmed by comments regarding the South China Sea made by Defense Secretary Jim Mattis.

After other Trump administration officials hinted at the possibility of a naval blockade of China’s artificial islands there, Mattis called for diplomatic efforts to resolve the dispute and played down the need for U.S. military maneuvers in the contested sea.

Mattis’s comments, during a tour of Japan and South Korea last week, were a “mind-soothing pill” that had “dispersed the clouds of war that many feared were gathering over the South China Sea,” the official English-language China Daily newspaper said in an editorial Monday.

“Mattis has inspired optimism here that things may not be as bad as previously portrayed,” the newspaper said.

While warning that the U.S. stance toward South Korea and Japan could jeopardize regional security, Chinese foreign ministry spokesman Lu Kang said the remarks about the South China Sea were “worthy of affirmation.”

The Iran-related sanctions were imposed Friday after Tehran conducted a ballistic missile test. They affect 25 people and entities allegedly involved in helping Iran develop its ballistic missile program or in supporting groups that the United States considers terrorist, such as Lebanon’s Shiite Hezbollah militant group.  

They include two Chinese companies and three Chinese individuals, who are now blocked from the U.S. financial system or dealings with U.S. companies. Foreign companies and individuals are also prohibited from dealing with them at risk of being blacklisted by the United States.

On Monday, Lu said that Beijing had lodged a formal protest.

“We have consistently opposed any unilateral sanctions,” Lu told a regular news conference. “The sanctions will not help in enhancing trust among the different parties involved and will not help in resolving international problems.”

China has close economic and diplomatic ties with Tehran but also played an important role in a landmark 2015 deal to curb the nation’s nuclear program.

Iran’s foreign ministry spokesman, Bahram Qasemi, described the Trump administration as “still in an unstable stage” but insisted that Iran did not conduct the recent missile launch to test the new White House.

“Iran’s missile test was not a message to the new U.S. government,” he was quoted as saying by the Tasnim news agency. “There is no need to test Mr. Trump as we have heard his views on different issues in recent days. . . . We know him quite well.”

Iran says its missile launches do not violate U.N. resolutions since the missiles are not designed to carry nuclear warheads. The Trump administration, however, views the launches as provocative and has vowed to curb Iran’s missile program.

Executives from the two Chinese companies included on the list denied doing anything wrong. 

Yue Yaodong, an executive at Cosailing Business Trading in the eastern city of Qingdao, said his firm was “collapsing,” with his account at the Agricultural Bank of China frozen, a shipping company refusing to accept his goods and clients abandoning him.

“We have not done any business with Iran for three to four years,” he said. “There have been some Iranian customers coming to us asking prices, but we have not conducted real business. Go search the customs record.”

He said his company sells items for everyday use, as well as porcelain, hydraulic parts, and motors for treadmills, but he said it was only a small, private firm.

“I am so lost. Both the United States and China are sanctioning me,” he said. “There is no way to do business now, I don’t know what our little company did wrong.”   

An export manager at Ningbo New Century Import and Export Co., based in the eastern city of Ningbo, told Reuters that the company had only carried out “normal” exports to Iran but did not elaborate.

U.S. relations with China have hit a distinctly rocky patch since President Trump took office, with the new president seeing the government in Beijing as more of a threat than a partner.

Indeed, since the inauguration, Trump has yet to speak to his Chinese counterpart, Xi Jinping, despite talking to at least 18 other world leaders.

Congcong Zhang in Beijing and Brian Murphy in Washington contributed to this report.