Sanctions, China, and the Financialization Trap: Labor Exploitation and Resistance in Iran

This paper explores the impact of global economic sanctions and the rise of China as a geopolitical powerhouse on the deindustrialization and financialization of Iran’s manufacturing sector and how these factors contribute to intensified labor exploitation. The geopolitical pressures of the sanctions, alongside Iran’s growing reliance on an extractive economy, have shifted the country's industrial base toward speculative financial practices. This shift has undermined productive sectors, deepened worker precarity, and reshaped labor regimes. As financial actors increasingly dominate production processes, workers are subject to greater exploitation through wage suppression, informal contracts, and job insecurity.

This study employs a qualitative comparative analysis of four key industrial firms in Iran—Haft-Tappeh Sugar Cane Co., Iran National Steel Industrial Group (INSIG), Heavy Equipment Production Company (HEPCO), and Chadormalu Mining and Industrial Company (CMIC). These cases are significant because they exemplify the adverse effects of financialization and Chinese competition, leading to deindustrialization and the expansion of an economy centered on resource extraction. Furthermore, these cases represent some of the most robust labor resistance campaigns in response to such transformations, making them essential for understanding the interplay between exploitation and resistance.

Drawing on digital fieldwork and archival research, this paper provides a grounded analysis of how external pressures reshape national labor regimes and the strategies of worker resistance that emerge in response. It examines the role of financialization as a key mechanism of capital accumulation, driving wage suppression and job insecurity while prioritizing short-term profits over long-term productive investment.

By situating Iran's experience within broader geopolitical shifts in the Global South, this paper contributes to a deeper understanding of how global transformations in the production matrix of capitalism affect labor processes, regimes of exploitation, and class formation. Ultimately, it reflects on the potential for labor organizations to confront and challenge these evolving labor regimes.