Dr. Mehrdad Alipour
Introduction
One of the problems of the Islamic Republic of Iran is international banking sanctions, which make it difficult for Iranian merchants to make banking transactions. Even foreign investors face problems transferring their capital into the Iranian economy. In addition, under the dollar hegemony, Iran’s money is blocked in international banks. Naturally, the root of the problem is the hostility of the United States towards Iran and its use of tools such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT). The consequences of this issue are the reduction of Iran’s trade volume with the world and the pressure from the West to accept their demands.
Chinese Dream
In light of the 2008 financial crisis and inspired by it, the Chinese tried to secure themselves against it and stabilize their position. In 2012, after the coming to power of Mr. Xi, the fifth generation of Chinese leaders, in the framework of the 18th Congress of the Communist Party, decided to redesign the country’s economic approaches. From this perspective, the Chinese raised the issue of the “Chinese Dream”. The design of the Chinese Dream was based on China’s presence in international markets. The Chinese saw that in the contemporary world, one of the tools of US economic pressure is the issue of international sanctions. Therefore, the Chinese have been discussing the establishment of the “China Cross-Border Interbank Payment System” since 2012, which is abbreviated as CIPS. Until 2015, they tried to conduct the necessary studies and feasibility studies. At first, they evaluated the capacities within China; from this perspective, they increased the size of their economy and signed bilateral economic agreements with different countries. From this perspective, they tried to create a kind of desirability and reduce the sensitivity of their global competitors to some extent.
Scale
From 2012 to 2015, the feasibility work of this system was carried out and from 2015, this system started to recruit members. The members of this system are divided into two categories direct and indirect members. In 2015, initially 19 direct and 176 indirect members were able to enter the system use its services, and conduct their financial and banking transactions with China through this channel. According to statistics for the year 2023, this system has 1452 members, of which 89 are directly from different continents and about 1363 members are indirectly present. Indirect members can conduct their financial transactions in this system through branches and agents designated by China. Although in Iran in 2018, there were murmurs about membership in this system in the country, it has not been seriously pursued to this day.
Some solution for the Iran-China relationship
Based on the considerations and conditions that have been designed for membership in this system, scenarios can be described for Iran: First, joining through the SWIFT code. If any member wants to join this system, if it has a SWIFT code, it does not need to go through the long membership process and this way of membership becomes easier. Naturally, in a situation where we have been excluded from the SWIFT system and do not have any exchange through this channel, this scenario is invalid for us.
Second, membership without a SWIFT code. The banks that China has introduced in this system are located in the space of the Islamic Republic and inside the country, we also establish our representatives, and our merchants can deliver rials here and yuan there through these representatives that are created and the codes that we have, or vice versa.
Third, sovereign permission is a matter that the Chinese considered for North Korea. In the case of North Korea, this country is isolated by the West and has no dealings. China has given its banks permission, despite international pressure, to deal with North Korea. Suppose Iran can create the economic adhesion and relations that it needs. In that case, it can move forward with China and create desirability in its relations with Iran. Iran can also join this system through a government decree and conduct its financial transactions that are currently difficult to do through this channel.