Photo taken on Sept. 18, 2019 shows US dollar banknotes in Washington D.C., the United States. US Federal Reserve on Wednesday lowered interest rates by 25 basis points amid growing risks and uncertainties stemming from trade tensions and a global economic slowdown, following a rate cut in July that was its first in more a decade. (Photo: Xinhua)

China on Tuesday extended praise to several European countries for ramping up efforts to establish a barter mechanism that is designed to circumvent the US' unilateral sanctions on Iran, billing the move as conducive to break US financial hegemony.

However, the Chinese Foreign Ministry also expressed hope that the Instrument in Support of Trade Exchanges (INSTEX), a European initiative to facilitate non-dollar transactions with Iran, will include more countries beyond the EU.

"We welcome the decision of the six European countries and support continuous progress of the INSTEX," Hua Chunying, a spokesperson for the Foreign Ministry, told a briefing on Tuesday, referring to the six European countries that have so far jumped on board on the initiative.

On Monday, Belgium, Denmark, Finland, Sweden and Norway announced that they would join France, Germany and the UK in the INSTEX, boosting the status of the mechanism and dealing a blow to the US, which unilaterally withdrew from an agreement reached by major countries, including China, and reinstated sanctions on Iran.

Hua said that the EU's move is an effort to safeguard the Iran nuclear agreement, support multilateralism and preserve a rules-based global order. This is conducive to breaking the US' financial hegemony, Hua said.

As the US continues to crack down on Chinese companies based on its domestic laws and sanctions, China has been pushing for alternatives to the current US dollar-dominated global clearing system for transactions, including setting up non-dollar settlement systems with trading partners.

On November 19, China and Russia signed a memorandum of understanding to boost the use of the yuan and the ruble in bilateral and international trade. Facing US sanctions, Venezuela has also offered to pay suppliers and contractors in yuan for oil transactions, Reuters reported on Thursday.

In a clear sign of China's interest in the INSTEX, the spokesperson for the Chinese Foreign Ministry said that China was expecting that the "mechanism will soon be expanded to have more operational scope and be open to third-party countries."