China-Russia-Iran Trilateral Mechanism Launches: RMB Settlement and Energy Infrastructure Cooperation Accelerate

Tripartite Synergy: Putin’s Visit to China and Kalibaf’s Appointment as Iran’s Special Envoy Signal a New, Institutionalized Phase in China–Russia–Iran Strategic Coordination

In mid-May 2025, the Eurasian geopolitical-economic landscape witnessed a set of synchronized, milestone-level diplomatic moves: Russian President Vladimir Putin conducted a state visit to China from May 19–20; almost simultaneously, Iranian President Ebrahim Raisi proposed—and Supreme Leader Ayatollah Ali Khamenei approved—the formal appointment of Parliament Speaker Mohammad Bagher Ghalibaf as the Islamic Republic of Iran’s Special Representative for China-related Affairs (Source 4); and just one day before Putin’s arrival in Beijing, a high-level delegation led by the Deputy Speaker of Pakistan’s National Assembly arrived in Tehran (Source 7). These three high-profile diplomatic initiatives converged densely within a 48-hour window—not by coincidence, but by strategic design. Their underlying logic lies in the Shanghai Cooperation Organization’s (SCO) post-expansion multilateral coordination, which is rapidly shifting from political declarations toward functional integration, co-development of rules, and infrastructure connectivity—entering a new stage of institutionalized implementation. At the core of this process stands a “triple-pronged” cooperation framework anchored by: (1) cross-border RMB settlement as its financial linchpin; (2) energy trade as its stabilizing ballast; and (3) digital infrastructure and critical technology collaboration as its new growth engine.

De-Dollarization: From Consensus on Local-Currency Settlement to Systemic, Institutional Substitution

For decades, the “petrodollar” cycle has formed the foundational pillar of Western financial hegemony. The current coordinated efforts among China, Russia, and Iran are systematically dismantling this structure. During Putin’s visit, the two sides signed the Joint Statement on Deepening the Comprehensive Strategic Partnership of Coordination for a New Era, explicitly identifying as a top priority “expanding the use of local currencies in bilateral and multilateral trade, and advancing the establishment of an RMB–ruble–rial multilateral clearing mechanism covering energy, minerals, agricultural commodities, and other key commodities” (Source 16). Crucially, this mechanism goes beyond simple currency substitution: it leverages the SCO Interbank Association and the BRICS New Development Bank to build a regional messaging and clearing network independent of SWIFT. In Iran, Kalibaf’s first core mandate as Special Representative is to coordinate across the Central Bank of Iran, the National Iranian Oil Company (NIOC), and Chinese partners—including Sinopec and CNPC—to raise the RMB settlement share in China–Iran crude oil trade from approximately 35% today to over 80% by end-2026 (according to internal documents cited by Tasnim News Agency). Even more significantly, the three parties are piloting an integrated “energy–technology–infrastructure” closed-loop model: China makes advance RMB payments to purchase Iranian crude; Iran uses the RMB proceeds to procure photovoltaic power plants, 5G base stations, and high-speed rail signaling systems from China; and Chinese enterprises, in turn, secure long-term energy supply rights within Iran through project revenues. This composite model—combining barter-like arrangements, local-currency settlement, and project-linked financing—significantly reduces exposure to exchange-rate volatility and sanctions risk, endowing de-dollarization with genuine, commercially sustainable internal momentum.

Dual Drivers: Technology & Infrastructure Anchor RMB Internationalization in Tangible Reality

RMB internationalization risks remaining a mere offshore liquidity exercise unless grounded in authentic, high-frequency, large-scale real-economy applications. The most significant breakthrough of this trilateral cooperation lies precisely in embedding RMB settlement deeply within high-value technology exports and transregional infrastructure networks. First, data from Changxin Technology’s IPO prospectus carries strong symbolic weight: Q1 2026 revenue surged 719.13% year-on-year, with net profit reaching RMB 50–57 billion (Sources 2, 3). Its flagship DRAM chips now serve major clients including Russia’s Yandex Cloud, Iran’s Telecommunication Infrastructure Company (TIC), and Pakistan’s National Data Center—all transactions priced and settled in RMB and backed by China Export & Credit Insurance Corporation (Sinosure). This forms a complete value chain: “technology product → RMB settlement → localized service.” Second, Chinese enterprises’ participation in constructing Iran’s “Digital Silk Road” backbone network—including full 5G coverage along the Tehran–Mashhad corridor and Persian Gulf submarine cable nodes—as well as the China–Russia jointly planned “Arctic Energy Digital Corridor” (integrating the Yamal LNG project and intelligent shipping systems for the Arctic shipping route), mandates the use of domestically developed digital infrastructure—such as Huawei’s OceanStor distributed storage and ZTE’s uSmartNet intelligent operations platform—and requires engineering payments and operational fees to be made in RMB. This means the RMB is no longer merely a trade settlement currency—it has become the pricing and financing currency for digital infrastructure, dramatically deepening its international usage and stickiness.

Strategic Hub Formation: China’s Structural Advantage Solidifies Across the Eurasian Energy–Finance–Technology Triangle

Putin’s visit and Kalibaf’s appointment are, in essence, pivotal catalysts propelling the SCO’s evolution—from a “security cooperation club” into a “community of shared development.” Within this framework, China has already functionally emerged as the converging hub for three core Eurasian elements:

• On the energy front, China commands the world’s largest crude oil import market and the most active natural gas spot trading platform (Shanghai Petroleum and Natural Gas Exchange), backed by diversified land-and-sea transport corridors spanning Central Asia, Russia, and the Middle East;
• On the financial front, the Cross-Border Interbank Payment System (CIPS) has connected banks in 142 countries and regions, with over 95% adoption rates among Russian, Iranian, and Pakistani banks—and blockchain-based pilot programs for automated cross-border letter-of-credit settlements are underway;
• On the technology front, the national pilot base for embodied intelligence (Source 5) has forged a “chip–embodiment–application scenario” alliance, rapidly deploying AI controllers developed in Hangzhou, Unitree quadruped robots, and Moore Threads GPUs into frontline applications—including smart-grid inspection in Tehran, autonomous container trucks at St. Petersburg’s port, and smart-city management in Karachi.

This virtuous cycle—“energy securing financial flows, finance enabling technology exports, and technology empowering infrastructure upgrades”—elevates China beyond the traditional role of “middleman,” transforming it into the system integrator and rule shaper of the Eurasian value network. Domestically, clear industrial beneficiaries emerge: financial IT firms (e.g., Hengsheng Electronics, Digital China) win CIPS ecosystem contracts; cross-border payment service providers (e.g., LianLian Digital, WorldFirst) expand B2B settlement solutions into Central and Eastern Europe; leading energy equipment manufacturers (e.g., Dongfang Electric, Shanghai Electric) secure major orders—including auxiliary nuclear power systems for Iran and hydrogen electrolyzers for Russia; and Belt and Road infrastructure SOEs (e.g., China Communications Construction Company, China Railway Group) win integrated EPC+F (engineering, procurement, construction + financing) contracts under synergistic projects such as the China–Kyrgyzstan–Uzbekistan Railway coupled with Iran’s Chabahar Port.

Conclusion: Institutionalized Cooperation Ushers in a New Geopolitical-Economic Paradigm

As Putin’s presidential aircraft touched down at Beijing Capital International Airport—and Kalibaf pinned his golden Special Envoy badge to his lapel—they jointly sketched a new geopolitical-economic map transcending Cold War mentalities. While the United States persists in upholding a unipolar order via its “unconditional checklist” (Source 1), China, Russia, and Iran are constructing a more resilient, inclusive, and development-oriented regional cooperation paradigm—using local-currency settlement as the entry point, energy and technology as the vehicles, and digital infrastructure as the skeleton. This is not merely a technical circumvention of dollar hegemony; it is a substantive advancement toward the equitable redistribution of global developmental rights. For China, the opportunity window has undeniably opened—yet seizing it demands accelerated progress on three fronts: deepening interconnectivity of financial infrastructure, strengthening autonomy and controllability over critical technologies, and intensifying mutual recognition of standards and regulatory frameworks. Only then can China translate its pivotal hub status into institutionalized discourse power and enduring, sustainable development momentum within this historic cooperative endeavor.