Barca captain Iniesta, 33, said in April he would leave the club he joined as a 12-year-old in the summer, with media reports suggesting he would be moving to Chongqing.
In a statement on social network Weibo on Friday, the Chinese side's president Jiang Lizhang said they are working with Iniesta in areas including marketing and youth education, but there is no deal for him to play.
Chongqing said they would adhere to rational investment and follow rules set by the government-controlled Chinese Football Association, which includes a salary cap.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Spanish reports had indicated Iniesta was close to agreeing a three-year deal with Chongqing, worth 81 million euros ($97 million).
($1 = 0.8386 euros)
(Reporting by Rik Sharma, editing by Pritha Sarkar)
