Chinese President Xi Jinping invited Iranian President Ebrahim Raisi to Beijing for three days to sign economic and oil cooperation agreements. On the first day, China and Iran signed 20 agreements. The 25-year agreements will cover vast economic and security activities, including oil, mining, technology, science, industry, tourism, transportation, weapons, healthcare, and agriculture.
China is the largest buyer of Iranian crude, investor, and trade partner with Iran. Over the last ten months, Iran exported $12.6 billion to China and imported $12.7 billion.
China sent the invitation Sunday evening, and the Iranian president flew to China one day later. The details of the meeting are unusual. The trip is the first Iranian president state trip to China in 20 years, and it was planned in one day.
U.S. relations are strained with both nations. Tensions with Iran have been consistently high for decades but have escalated significantly over the last year. Multiple reports show Iran has provided ongoing drone support to Russia in Ukraine.
Iran also has been horrible on human rights violations. Iran has imprisoned or killed "tens of thousands" Iranian protesters about the brutal murder of Mahsa Amini for not wearing her hijab correctly in September.
The civilized world refuses to deal with the murderous butchers known as the Islamic Republic of Iran. The Iranian regime frequently cuts the internet for the nation and then uses machine guns to disperse protestors. However, China has a different opinion. He hailed Iran's efforts against "terrorism," a euphemism for the public protests across Iran. According to the Iranian press, Chinese President Xi Jinping also said, “no matter how the international and regional situation changes, China will unswervingly maintain its friendship and cooperation with Iran and advance China-Iran comprehensive strategic partnership.” Those words sound more like a military treaty than economic agreement.
Last week, the U.S. shot down a Chinese spy balloon that traversed the continental U.S., including several sensitive military installations. A few days before the balloon's emergence, a memo from four-star Air Force general Michael A. Minihan leaked on social media. The memo instructed his commanders to prepare for war with China before 2025. Since the memo’s release, China has made multiple new and unexpected security and economic agreements with Saudi Arabia, Brazil , and now Iran.
Iran also has been making deals. As of January 30, 2023, Iran has fully integrated its banking system with Russia to bypass strict economic sanctions. In 2014, Russia developed a competing international bank messaging system to the SWIFT called the SFPS. The SFPS is significantly smaller than the SWIFT network. Still, hundreds of banks joined the SFPS in 2022 after the massive Russian sanctions.
What does it mean?
Some stories have complicated facts and require some commentary, but the facts of this story are scary and straightforward. Iran’s first Presidential visit to China happened with less than 24 hours of planning. It looks more like an emergency meeting than a traditional diplomatic summit between nations. Iran is a staunch ally of Russia providing military support in Ukraine and is now fully integrated into the Russian banking network designed to bypass sanctions. China is Iran’s largest trading partner. China, India, Brazil, South Africa, and many other countries have integrated into the Russian SPFS. As discussed many times on this blog, the BRICS (Brazil, Russia, India, China, and South Africa) are committed to creating a basket of member nation currencies to overthrow the Dollar hegemony. In real-time, China and Iran are signing agreements to make that happen.
The Dollar's reserve currency status is one of the primary reasons for the U.S. global dominance. The powerful don't want to give up power. China, Russia, and Iran have unified to shift the power balance by overthrowing the Dollar. Anything denominated in Dollars, like stocks, bonds, and cash, is in harm's way of a global shift from the Dollar as the primary reserve currency. The BRICS represent 25% of global GDP and would have the loyalty of 8 of the ten largest oil producers on earth if the world fully splinters into two economies. How do you think the Dollar’s story unfolds over the next few months and years?
Gold. You may want to get some.