Chinese automaker Chery Automobile and metals giant Tongling Nonferrous Metals Group are reviving an old form of commerce: barter. Bloomberg reports that in recent years, the two Anhui province companies have exchanged semi-knocked down cars for containers of Iranian copper and zinc, bypassing traditional cash payments amid an escalating wave of Western sanctions on Tehran. The vehicles are shipped to Iran in parts, assembled locally, and sold under the Modiran Khodro (MVM) brand, while the metals are distributed to Chinese industrial firms, highlighting a rare modern instance of barter in global trade.
The arrangement stems from US and European sanctions that restrict the use of their currencies for transactions with Iran, creating difficulties for cash payments. Under Chinese law, however, trade with Iran remains legal, allowing Chery and Tongling to continue operations without breaching sanctions. Sources familiar with the deal told Bloomberg that the barter system has evolved over the past six to seven years, coinciding with tightened sanctions during the Trump administration, which curtailed Iran’s access to the global financial system.
Chery, which recently raised $1.2 billion in a Hong Kong IPO, does not deal directly with Iran but supplies parts and technology to a local Anhui intermediary that manages shipments to Tehran. Tongling, a leading copper and zinc producer, brokers the return flow of Iranian metals. Although the scale of these transactions is modest relative to China’s total exports to Iran, estimated at about $9 billion last year, the deals signal a resurgence of barter trade reminiscent of the Cold War era when hard currency was scarce. Over the decades, barter had largely fallen out of use, replaced by dollar-denominated global trade, but sanctions on countries such as Iran, Russia, and Venezuela are prompting a modern revival.
Chery’s trade with Iran is part of a broader strategy that propelled the company to become China’s largest exporter of passenger vehicles and the 11th-largest globally. Founded in 1997 in Wuhu, Anhui province, the automaker quickly expanded overseas, entering Iran in 2004 through a partnership with Modiran Khodro, and later extending sales to Cuba, Russia, and other markets. Despite these ventures, Chery disclosed in its IPO filings that revenue from Iran and Cuba accounted for no more than 0.5 percent of total income in recent years, while Russian operations, once a quarter of revenue, have been gradually scaled back.
The barter model reflects a growing trend in countries facing sanctions, from Iran trading metals and agricultural goods for Chinese vehicles to Sri Lanka exchanging tea for Iranian oil. Bloomberg notes that these unconventional trade flows illustrate how global commerce is adapting to a fragmented financial landscape, reviving centuries-old practices of barter in a modern, high-value context. For Chery and Tongling, it provides a creative solution to navigate political and financial obstacles while maintaining access to critical markets and raw materials.
