As tensions escalate in the Middle East, China finds itself navigating a precarious landscape that could significantly impact its economic aspirations and geopolitical stability. With the conflict raising concerns about energy supplies and trade routes, Beijing is reassessing its position and alliances in the region.
Turbulent Waters: Energy and Trade Implications
Currently, China appears to be insulated from the immediate shocks of war, having secured enough oil reserves to last several months. Should the need arise, it could turn to Russia for additional support. However, the long-term implications of the Middle Eastern conflict could pose serious challenges for China’s economic strategy. The nation, already grappling with sluggish consumption, a protracted property crisis, and mounting local debt, recently adjusted its annual growth target to the lowest level seen since 1991.
Beijing had hoped to rejuvenate its economy through exports, yet ongoing trade tensions with the United States have undermined that goal. As the situation in the Middle East develops, any disruption to key shipping routes—especially through the Strait of Hormuz—could exacerbate China’s difficulties. Philip Shetler-Jones from the Royal United Services Institute warns, “A prolonged period of turmoil and insecurity in the Middle East will disrupt other regions of importance for China.”
A Fragile Alliance: China and Iran
Historically, Iran has been regarded as a close ally of China, with diplomatic ties deepening since Xi Jinping’s visit to Tehran in 2016. The two nations formalised a 25-year strategic partnership in 2021, with China pledging to invest $400 billion (£300 billion) in exchange for reliable oil supplies. Despite this commitment, analysts suggest that only a fraction of the promised investment has materialised, although oil imports from Iran remain significant—accounting for approximately 12% of China’s crude oil supply.
Reports indicate that China continues to import Iranian oil, often disguised as coming from other sources to bypass sanctions. In addition to energy ties, there have been allegations of military cooperation, with concerns that Chinese technology has been used to bolster Iran’s repressive measures. While the relationship between the two nations is often characterised as a strategic partnership, it is fundamentally transactional, lacking the ideological depth found in Western alliances.
Prof. Kerry Brown from King’s College London notes, “There’s no real ideological or cultural reason why China would get on with Iran… It’s a really fragile basis for a relationship.”
A Calculated Response to Global Uncertainty
China’s response to the ongoing conflict has been measured, with officials calling for a ceasefire while condemning the actions of the US and Israel. Foreign Minister Wang Yi described the strikes against Iran as “unacceptable,” highlighting Beijing’s concern about being sidelined in the region. This duality reflects a desire to position itself as a stabilising force while simultaneously avoiding direct involvement in the conflict.
Moreover, China’s foreign policy strategy appears to be evolving. With the US president’s upcoming visit to Beijing, there is speculation about how the current crisis might influence diplomatic relations. Shetler-Jones suggests that China may be looking for insights into US foreign policy shifts, particularly if the conflict becomes unpopular domestically for Washington.
Professor Brown adds, “I don’t think China wants a world that’s dominated by the US, but they don’t want a world where the US is such an unstable actor.”
Navigating a Volatile Landscape
As China grapples with the implications of the Middle East conflict, it is also considering its role as a mediator. Recent dialogues with counterparts in Oman and France, along with the announcement of a special envoy to the region, signal Beijing’s intent to engage constructively. However, it must tread carefully, balancing its strategic interests against the unpredictability of international relations.
Additionally, the ramifications of a prolonged conflict could be felt far beyond the Middle East. Economic disruptions, particularly in the Global South where many countries rely on stable energy supplies, could lead to food shortages and wider instability. As the situation evolves, China’s ability to adapt its foreign policy while safeguarding its interests remains to be seen.
Why it Matters
The ongoing turmoil in the Middle East presents a significant challenge for China, a nation that has built its global ambitions on stability and economic growth. As Beijing seeks to navigate this crisis, its responses will not only shape its relationship with Middle Eastern nations but also influence its standing on the global stage. The interplay of energy security, trade stability, and geopolitical alliances will be critical in determining how effectively China can assert its influence while avoiding entanglement in conflicts that threaten its long-term objectives.
