Chongqing's sponsors recently stated that they were "confident" of financing a move for the Spain international, who revealed in an emotional press conference last month that he is to quit Camp Nou this summer.
A statement released by club president Jiang Lizhang on Chinese social media site Weibo has left Iniesta's next career move in jeopardy, however, with the Far East outfit seemingly unable to afford his wages.
"Recently, the media reported that the Spanish star Iniesta will join the club on a high salary," the statement read. "There are many different opinions on this matter. I made the following three statements on this matter. My club will never violate the development prospects of Chinese football, and is determined to make due contributions to the healthy development of Chinese football.
"My club is firmly rooted in Chongqing, and has made every effort to increase the investment in the youth training system at all levels. It is our responsibility to provide excellent players for Chongqing football and Chinese football.
"Any violation of the policy of the Chinese Football Association and disruption of market order violates the development philosophy of our club. The other sports industry sections of our club's controlling shareholder have in-depth cooperation with Mr. Iniesta in sports brokerage, sports marketing, and youth education.
"Do not rule out that in the future, there could be more in-depth cooperation between the two parties in the Chinese market, but this does not mean that Mr. Iniesta will join the club as a player."
According to Catalunya Radio, Iniesta is now in talks over a possible move to Japanese J1 League outfit Vissel Kobe, whose owner has close ties to Barcelona.