TEHRAN- President Masoud Pezeshkian’s recent visit to China and participation in the 25th Shanghai Cooperation Organization (SCO) Summit marked a pivotal moment in Iran’s economic diplomacy. With over 20 cooperation agreements signed and the proposal of innovative financial initiatives, the visit represents a strategic step toward strengthening Iran’s regional and global economic standing. Amid ongoing sanctions, the visit focused on reducing reliance on the U.S. dollar and expanding transit infrastructure, offering a promising outlook for Iran’s economic future.

Pezeshkian’s attendance at the SCO Summit and the commemoration of the 80th anniversary of the end of World War II carried significance beyond politics and security, it was a major economic opportunity for Iran. At a time when Tehran faces unilateral sanctions and economic challenges, new avenues for regional and international cooperation are opening. But what impact could this visit have on Iran’s current economic trajectory?

Strengthening Economic Multilateralism Amid Sanctions

The SCO, comprising countries that represent over 40% of global GDP and a population of 3.4 billion, offers a unique platform for expanding economic cooperation. President Pezeshkian proposed the creation of a specialized initiative titled the “Accounts and Settlements of the Shanghai Cooperation Organization,” built on three key pillars:

* Settlement in national currencies: Aimed at reducing dependence on the U.S. dollar and mitigating the impact of American financial sanctions.

* Shared digital infrastructure: Leveraging central bank digital currencies for secure and rapid transactions.

* Multilateral currency swap fund: Designed to support member states facing sanctions or liquidity crises.

Implementing this initiative could enhance Iran’s economic resilience and contribute to a more equitable global financial order. Especially under current conditions, it offers Iran a pathway to reduce reliance on Western-dominated financial systems.

Expanding Transit Infrastructure and Iran’s Strategic Role

In his address, President Pezeshkian highlighted Iran’s unique geopolitical and transit position, expressing Tehran’s readiness to facilitate access for SCO members—particularly through the Chabahar Port. The imminent connection of Chabahar to Iran’s national railway network could revolutionize trade routes linking China, Central Asia, and Afghanistan to the Indian Ocean. This development not only boosts Iran’s transit revenues but also attracts foreign investment in logistics and infrastructure, strengthening the domestic economy.

Signing of 20 Multilateral Cooperation Agreements

During the summit, Iran signed more than 20 agreements and declarations across diverse sectors, including multilateral trade, sustainable energy development, green industry, artificial intelligence, and scientific and technological cooperation.

These agreements lay the groundwork for expanded economic collaboration with SCO members—especially China and Russia. Notably, the trade and energy accords are expected to boost Iran’s non-oil exports and diversify its revenue streams.

Deepening Economic Ties with Regional Partners

President Pezeshkian’s bilateral meetings with leaders from Pakistan, Tajikistan, Russia, and Turkey led to key economic understandings. In talks with Pakistan’s Prime Minister, both sides emphasized enhanced economic cooperation and climate challenge management. Meanwhile, discussions with Russia’s President focused on implementing the free trade agreement with the Eurasian Economic Union, which could significantly increase Iran’s trade volume.

These partnerships are particularly vital as Iran seeks new export markets and strategies to circumvent sanctions.

Strengthening Iran-China Relations: Presidential Meeting and Strategic Agreements

A highlight of the visit was President Pezeshkian’s meeting with Chinese President Xi Jinping in Beijing, where both leaders reaffirmed their commitment to deepening the comprehensive strategic partnership. They emphasized the active implementation of the 25-year cooperation agreement signed in 2020 and agreed to elevate bilateral relations to their highest potential.

Pezeshkian described China as a strong and determined ally, while Xi referred to Iran as a strategic partner with a forward-looking approach.

From an economic perspective, discussions centered on expanding cooperation in trade, investment, clean energy, infrastructure connectivity, and people-to-people interactions. These agreements could bolster Iran’s economy by providing access to advanced Chinese technologies and new markets.

The meeting not only deepened bilateral ties but also yielded strategic decisions crucial to Iran’s economic trajectory, including a joint stance against external efforts to undermine Iran-China relations.

The SCO’s Role in Overcoming US Unilateralism

As a key institution, the SCO serves as an effective counterweight to US unilateralism and Western hegemony. In his address at the SCO summit, Iranian president Masoud Pezeshkian urged member states to expand trade in national currencies and fortify financial mechanisms to resist sanctions. This strategy, aimed at reducing reliance on the dollar, could foster a multipolar financial system and enable Iran to withstand unilateral US pressures. As noted, the visit marks a historic inflection point in Iran’s economic development and will shape its future outlook.

Reducing Dependence on a Dollar-Based Economy

Iran’s proposal to conduct trade in national currencies and develop a shared digital infrastructure represents a significant step towards diminishing dollar dependence and establishing a multipolar financial order. If realized, the initiative could position Iran as a pioneer of a new regional and global financial architecture. This is particularly vital for Iran’s economic future, which hinges on diversifying trade partnerships and mitigating the impact of sanctions.

Strengthening Iran’s Role in Regional Transit Corridors

The development of Chabahar Port and its connection into the rail network will elevate Iran’s role in regional transit corridors. This will not only boost foreign exchange revenues but also generate employment and stimulate growth in underdeveloped areas such as Sistan and Baluchestan by attracting foreign investment. Moreover, collaboration with China on high-speed rail and highway construction could modernize Iran’s transport infrastructure and enhance its appeal to global investors.

Expanding Scientific and Technological Cooperation

The signing of cooperation agreements in fields such as artificial intelligence and green technologies could steer Iran towards a knowledge-based economy. Partnerships with countries like China and Russia, leaders in emerging technologies, may facilitate technology transfer and strengthen Iran’s domestic capabilities. Over time, this could reduce reliance on oil exports and foster the growth of advanced industries.

Strengthening Relations with Neighboring and Regional Countries

Bilateral meetings on the sidelines of the summit underscore Iran’s intent to deepen economic ties with neighboring and regional states. For instance, enhanced trade and transit cooperation with Tajikistan and Turkey could open new markets for Iranian goods. Additionally, increased cultural and tourism exchanges with Russia, particularly the rising number of Iranian students there, could invigorate the tourism sector and promote scientific collaboration.

Transforming Iran into a Key Player in the Regional Economy

President Pezeshkian’s visit to China and participation in SCO summit mark a pivotal moment in Iran’s foreign and economic policy. Amid current challenges, the visit has helped mitigate the effects of sanctions and diversify Iran’s trade partners through strengthened multilateral cooperation and innovative financial proposals. In the long run, it could usher in a more promising economic future by advancing transit infrastructure, enhancing scientific and technological partnerships, and expanding regional ties. The implementation of summit agreements, especially in transit, trade, and technology, could cement Iran’s status as a key factor in the regional and global economy and represent a significant stride towards sustainable development and economic resilience.