BEIJING, Sept 16 (Reuters) - China encourages Iran and the U.S. to remain rational, exercise restraint, return to the Islamabad memorandum and "engage in substantive consultations," Chinese Foreign Minister Wang Yi told his Iranian counterpart in Beijing on Wednesday.

"We urge all parties to take effective measures to reopen the Strait of Hormuz at an early date" to safeguard the stability of international energy transport and supply chains Wang said, according to China's foreign ministry, adding that China "does not want to see regional tensions to spill over further into Yemen and the Red Sea."

Tehran and Washington should "rebuild the negotiation mechanism based on the consensus reached so far," Wang told Iran's Araqchi, who is on a one-day visit to Beijing.

The talks between the two diplomats came a week ahead of an expected meeting between Chinese President Xi Jinping and U.S. President Donald Trump in Washington.

U.S. Treasury Secretary Scott Bessent on Tuesday said Trump and Xi would continue discussions on Iran and China's financial links to Tehran, which Washington has been seeking to shut out of western financial systems.

Beijing, the main buyer of Tehran's oil, had repeatedly stressed the need to restore normal and safe navigation through the Strait of Hormuz, but has largely refrained from directly challenging Tehran's threats to shipping.

"The current situation once again demonstrates that the existing security architecture in the Middle East is inadequate and needs to be reformed and strengthened," Wang said on Wednesday.

China stands ready to promote peace, fairness and justice in the region, and its policy toward Iran has remained consistent and stable, he added.

(Reporting by Xiuhao Chen, Yukun Zhang and Liz LeeEditing by Tomasz Janowski, Editing by Louise Heavens)