As an economic power that has long occupied the world's hegemony, the United States has been actively maintaining its "dollar monetary system" and relying on "currency dilution policies" to exploit the rest of the world in disguise when fiscal constraints are strapped. However, at a time when China, Russia, China and Iran are deepening energy and economic cooperation, we may gradually get rid of the shackles of the dollar system. According to the latest news from Deutsche Welle (DW), on January 14 this year, Chinese State Councilor and Foreign Minister Wang Yi met with Iranian Foreign Minister Hossein Amir-Abdollahian in Wuxi, Jiangsu Province, and announced the launch of a 25-year comprehensive cooperation agreement, namely the Comprehensive Cooperation Plan between the People's Republic of China and the Islamic Republic of Iran. The agreement will further cover areas such as security, infrastructure and communications, and for the first time attempt to use the renminbi and digital yuan for future settlement of oil trade between the two countries, in order to get rid of the shackles of the U.S. "petrodollar" system. The same attempt has also been more and more reflected in the trade between China and Russia. The continuous acceleration of the de-dollarization process between China and Russia and China and Iran declares that the future world monetary system centered on the US dollar is expected to show a diversified development trend under the impetus of China and Russia and other countries.
1. The Implementation of the China-Iran Agreement has officially begun, and China will become a solid backing for Iran.
Just as there is oppression, there is resistance, and in the context of the United States' continuous implementation of "long-arm diplomacy" around the world, Iran lives in the shadow of US hegemonism and power politics like China and Russia, which makes China, Russia, and Iran naturally have the intention of pitying each other and hugging each other for warmth. Iran is similar to Russia, both are countries with relatively rich oil resources, but they have never been able to get rid of the economic blockade of the United States, resulting in their natural resources in a state of "no market", and China is the window for Iran and Russia to break the Western blockade, and will gradually help them open up the "second vein of the governor" of the economy by cooperating to promote development. On the 14th of this month, while announcing on the same day that Foreign Minister Wang Yi and Iranian Foreign Minister Amir Abdullahyan officially launched the implementation of the 25-year comprehensive cooperation plan between the two countries, they also reaffirmed China's firm position of resolutely opposing illegal unilateral sanctions against Iran, opposing political manipulation on issues such as human rights, and opposing gross interference in the internal affairs of Iran and other regional countries, and said: "The merits and demerits of the Iranian nuclear issue are clear at a glance. The Unilateral Withdrawal of the United States from the JCPOA has single-handedly created the current difficult situation, and it should bear the main responsibility and correct its mistakes as soon as possible. China will firmly support the resumption of the implementation of the JCPOA negotiations, continue to participate constructively in the follow-up negotiations, and hope that all parties will overcome difficulties and move in the same direction and persist in advancing the process of political and diplomatic settlement. Iranian Foreign Minister Abdullahyan said: "Developing relations with China is the highest decision of Iran. The Iranian side firmly supports China in safeguarding its core interests, firmly pursues the 'one-China policy', and is firmly committed to promoting Iran-China cooperation and firmly supporting the Beijing Winter Olympics." At the same time, the Iranian side will be committed to reaching a package of stable safeguard agreements through serious negotiations, thank China for its constructive role, and are willing to maintain close communication with China. ”
As a Middle Eastern country that has long been sanctioned by the Western world led by the United States, Iran has rich oil resources, but it has never been able to transform them into national economic strength and national defense strength. To get out of this situation, Iran reached a comprehensive nuclear deal with the United States, britain, France, Russia, China, and Germany in July 2015, pledging to limit its nuclear program in exchange for the lifting of sanctions by the international community. But as recently as May 2018, former U.S. President Donald Trump reimposed unilateral sanctions against Iran based on U.S. interests. Washington has since strictly enforced the ban, announcing the suspension of economic trade with countries with which Iran has any economic contacts. Iran, on the other hand, gradually suspended the implementation of some of the provisions of the JCPOA in 2019. Under the Iran nuclear deal, Iran should limit the enrichment of uranium to 3.67 percent. But as of December, Iran had increased the purity of its enriched uranium to 60 percent as a counter to unilateral economic sanctions imposed on Iran by U.S. authorities. Before the U.S. ban, China was one of the biggest buyers of Iranian oil. After the 25-year-long China-Iran Agreement is formally implemented, Iran will also ensure regular oil supplies to China and receive a full range of investment from China. Under the terms of the agreement, China will make $400 billion worth of long-term investments in Iran's energy and infrastructure sectors such as banking, telecommunications, ports, railways, healthcare and information technology over 25 years. In this regard, the Chinese Foreign Ministry pointed out in the statement that China and Iran agreed to strengthen cooperation in energy, infrastructure, production capacity, science and technology, medical and health care, expand agriculture and fisheries, network security, tripartite cooperation, deepen people-to-people exchanges such as education, film, and talent training, and create more tangible cooperation results. Iran's semi-state media, farsnews Agency, quoted Abdurahyan as saying: "We have agreed to use today as the launch date of the 25-year Comprehensive Cooperation Plan between Iran and China." ”
2. China, Russia and Iran will commit to de-dollarization of trade settlement, and the dollar system will be challenged.
The reason why the United States has been able to play a long-term role in the world is because it has controlled the international payment system SWIFT. SWIFT, whose full name is Society for Worldwide Interbank Financial Telecommunication, Chinese is the Association for Worldwide Banking Financial Telecommunication, is an international cooperation organization that operates a world-class network of financial messages through which banks and other financial institutions exchange messages with their peers through secure, standardized and trusted channels provided by the organization. As an interbank currency clearing system created to facilitate trade transactions, SWIFT's services have reached more than 11,000 banks and securities institutions, market infrastructure and corporate clients in more than 200 countries and regions around the world, processing 15 million messages per day. The U.S. dollar accounts for more than 40% of international payment settlements and more than 60% of international reserve currencies, which is the basis for the US control of the SWIFT system. This is like China's Alipay, WeChat, UnionPay and other payment systems, who can get the recognition of most users, who can occupy the largest market share, and get the ability to review user transaction flow, and even terminate user transactions. Taking the September 11 incident in 2001 as an opportunity, President George W. Bush of the United States promulgated the International Emergency Economic Rights Act on the pretext of assisting in counter-terrorism, authorizing the Office of Foreign Assets Control of the Treasury Department to retrieve financial transactions and capital circulation information "related to terrorist activities" from SWIFT, giving the United States the right to review international transaction flows and launch economic sanctions against any country or organization.
It is worth mentioning, however, that SWIFT is not a US-funded institution, but a neutral international organization based in Brussels, Belgium. It is also not a payment clearing institution, but a channel for financial information transmission between financial institutions, and a bridge connecting the payment systems of various countries. In fact, China, Russia and Iran do not lack payment systems, but the Americans control the bonds that connect the trading systems of other countries. This is also the fundamental reason why Iran has had oil for many years but has not been able to sell it, because they have never escaped the economic scrutiny and obstruction of the Americans.
In order to resist the long-term control of SWIFT by the United States, Russian Foreign Minister Sergei Lavrov, when he visited Guilin, China, as early as March 22, 2021, proposed to Chinese State Councilor and Foreign Minister Wang Yi that "China and Russia need to reduce their dependence on the West and reduce the risk of Western sanctions by increasing their technological independence and using their own currencies to replace the global currency payments of the US dollar" with the idea. Later, during a week-long trip to the Middle East, Wang Yi discussed with former Iranian Foreign Minister Mohammad Javad Zarif on the possibility of using rmb and digital yuan settlement in oil trade on the 27th of that month, and jointly signed the "Comprehensive Cooperation Plan between the People's Republic of China and the Islamic Republic of Iran", which for the first time turned Russian Foreign Minister Lavrov's idea of independent monetary payments into reality. The digital yuan (E-CNY), also known as digital currency electronic payment (DC/EP), is a legal tender issued by Chinese Bank, mainly for cash in circulation (M0). The currency is paid in electronic form and is worth the same amount as banknotes and coins in renminbi. Like the mainstream virtual currency currently on the market, it belongs to the decentralized currency and is therefore not affected by the US SWIFT system. With the increase in inflation and indebtedness of the US economy in recent years, China's rapid rise in the Asia-Pacific region has also increased its economic influence in the international community. Against this backdrop, Mikhail Belyaev, an expert at the Russian Institute for Strategic Studies, analyzed and pointed out: "The strengthening of the renminbi is the result of China's offensive on the global economic front and the decline in the economic status of the United States, which has led to the gradual withdrawal of the dollar from the international stage." Of course, the more the trade between China and Russia grows, and the higher the position of one of the parties in the trade, the more they want to make the national currency an international settlement tool. In fact, this kind of thing is happening now. At present, the position of the renminbi in Sino-Russian foreign trade services is not only important, it is clear that it will soon play a leading role, although the proportion of the renminbi in Sino-Russian trade settlement is now lower than that of the US dollar, but the process of narrowing this gap is getting faster and faster. ”
The agreement on the 25-year comprehensive cooperation plan between China and Iran was officially launched, and the de-dollarization of Sino-Russian trade has added new impetus. Under the pressure of the US authorities, the Iranian government has also been keen on digital currencies to support international trade and adjust the economic structure, and regards digital assets as a licensed sector of the economy. According to data from NBC News, quoted by online service provider TankerTrackers, Iran exports up to 600,000 barrels of crude oil a day and is rolling out more innovative technologies and methods to circumvent tough U.S. financial sanctions. Under the active leadership of the Chinese side, a new monetary system composed of countries in the world, including China, Russia and Iran, that does not rely on the US "petrodollar" is gradually taking shape, and the digital yuan actively issued by China will also become a good breakthrough. As the saying goes, many acts of injustice will kill themselves, and the United States continues to use "increasing the printing machine" to "suck blood" from countries around the world in disguise and reduce debt by diluting currencies, which has provoked China and Russia and also caused a strong backlash from Western allies. According to data from the International Monetary Fund (IMF), as early as the fourth quarter of 2020, the proportion of the US dollar in global foreign exchange reserves has fallen to 59.02%, the third consecutive quarter of decline, the lowest level in 25 years. In 2001, the dollar accounted for nearly 73 per cent, and the downward trend was very obvious. This is due to the competition between other currencies used by central banks in international transactions against the dollar, whose role in the global economy is declining. To a certain extent, this also provides an excellent opportunity for the implementation of the de-dollarization plan of China and Russia and China and Iran.