As the conflict in the Middle East stretches into its second month, jeopardising global energy supplies and driving oil prices to new heights, China is stepping up its efforts to mediate. This strategic move coincides with US President Donald Trump’s assertion that military action against Iran could reach a conclusion within weeks, although the specifics of such a resolution remain unclear.
China and Pakistan Formulate a Peace Plan
In a surprising turn of events, Pakistan has emerged as an unlikely mediator alongside China in the ongoing hostilities between the US and Israel on one side, and Iran on the other. The two nations have put forth a five-point initiative aimed at establishing a ceasefire and facilitating the reopening of the crucial Strait of Hormuz, a vital artery for global oil shipments. This joint diplomatic effort was sparked by a visit from Pakistan’s Foreign Minister to Beijing, seeking Chinese support for their peace efforts.
Both nations emphasised that dialogue and diplomacy are essential for resolving the escalating tensions. The Chinese Foreign Ministry stated that they are committed to “advocating for peace,” underscoring the importance of protecting waterways that have been impacted by the conflict.
The Economic Stakes for China
While the focus may be on the immediate humanitarian and geopolitical implications of the conflict, the economic stakes are undeniably significant for China, which is the world’s largest importer of crude oil. With sufficient reserves to weather the upcoming months, Beijing’s decision to engage in mediating discussions reflects its desire for stability—an objective closely tied to its own economic health.
Matt Pottinger, Chairman of the Foundation for Defense of Democracy’s China Programme, expressed concerns over the potential economic repercussions of a prolonged conflict, suggesting that a global energy shock could severely affect China’s manufacturing sector. “If the rest of the world begins to slow down economically because of an energy shock, that’s going to be tough for China’s factories and exporters,” he noted.
The ripple effects of rising oil prices extend beyond energy costs. They threaten to disrupt supply chains across various industries, from manufacturing plastics to components for technology such as smartphones and electric vehicles.
China’s Diplomatic History in the Region
China’s recent diplomatic overtures are not without precedent. In 2023, it successfully brokered a rapprochement between Saudi Arabia and Iran, two nations that have historically been at odds. This diplomatic breakthrough was seen as a strategic move by Beijing to promote regional stability and reduce the likelihood of proxy conflicts.
Moreover, China has hosted discussions between Palestinian factions, working towards a national unity government. These efforts highlight Beijing’s potential role as a stabilising force in a region fraught with tension, despite its historical challenges in achieving lasting peace.
However, it is essential to note that China’s approach to international relations is primarily driven by economic interests rather than military capabilities. Its influence is rooted in economic interdependence rather than security guarantees, making it cautious about engaging in military conflicts.
The Limits of China’s Influence
Despite its ambitions, China lacks the military resources in the Middle East that would allow it to play a more assertive role. The United States maintains a significant military presence throughout the Gulf states, while China’s closest military base is located in Djibouti, primarily serving logistical purposes. During the previous Iran-Israel conflict in 2025, China opted for a passive stance, which revealed the constraints on its ability to act decisively.
While the peace initiative remains unaddressed by both the US and Iran, it positions Xi Jinping as a neutral broker in stark contrast to the more aggressive posturing of the United States.
Why it Matters
China’s push to mediate in the Iran conflict underscores its ambition to emerge as a leading global player in international diplomacy. While its credibility as a neutral mediator is often questioned due to its associations with authoritarian regimes, Beijing’s strategic economic interests compel it to seek stability in the Middle East. As the situation evolves, the effectiveness of China’s mediation efforts may not only impact regional dynamics but could reshape its global standing in the intricate dance of international relations.
