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As tensions flare in the Middle East, China finds itself navigating a precarious landscape that could significantly impact its economic ambitions and geopolitical strategies. While Beijing currently enjoys a stable oil supply sufficient for several months, the ripple effects of prolonged conflict, particularly in Iran, could pose serious challenges to its long-term interests.
Economic Implications of Conflict
China’s economy is at a critical juncture. With Communist Party delegates convening in Beijing this week to discuss the future trajectory of the world’s second-largest economy, the spectre of low consumption, a lingering property crisis, and substantial local debt looms large. Notably, this marks the first time since 1991 that the Chinese government has revised its growth expectations downwards, despite advancements in high-tech and renewable sectors.
The geopolitical upheaval in the Middle East comes at a time when China is still grappling with the ramifications of a trade war with the United States. The ongoing conflict not only threatens its vital shipping routes but also jeopardises its energy imports from the region. Analysts warn that extended unrest could hinder not just China’s access to oil, particularly through the critical Strait of Hormuz, but also destabilise its investments in Africa and beyond, which have thrived on steady Gulf capital inflows.
“A prolonged period of turmoil and insecurity in the Middle East will disrupt other regions of importance for China,” cautions Philip Shetler-Jones from the Royal United Services Institute. He highlights the potential for wider instability that could undermine China’s broader economic interests worldwide.
A Complicated Relationship with Iran
Historically, Iran has been viewed as a key ally for Beijing, with their partnership deepening significantly in recent years. The relationship was solidified during Xi Jinping’s visit to Tehran in 2016, culminating in a 25-year strategic partnership agreement in 2021, which promised $400 billion (£300 billion) in investments from China in exchange for a steady flow of Iranian oil. Despite these commitments, only a fraction of the promised funds have materialised, while oil imports from Iran have remained substantial. In 2025, China imported approximately 1.38 million barrels of crude oil daily from Iran, accounting for about 12% of its total crude imports.
However, the relationship is more transactional than ideological, with Professor Kerry Brown from King’s College London noting that China’s engagement with Iran serves to irritate the United States rather than foster a robust alliance. “There’s no real ideological or cultural reason why China would get on with Iran,” he explains, emphasising that any cooperation is largely motivated by negative strategic calculations rather than a deep-seated camaraderie.
As tensions escalate, China is unlikely to rush to Iran’s defence. Unlike Western alliances that are often built on mutual defence agreements, China’s partnerships tend to be more pragmatic and focused on economic interests. Consequently, Beijing’s response to the conflict has been measured, issuing a call for a ceasefire while avoiding direct confrontation with the US.
Navigating Global Relations
China’s foreign policy is being scrutinised as it attempts to position itself as a stabilising force in the region amid rising tensions. While Beijing has issued calls for restraint, the reality is that it remains sidelined in the face of US actions in the Middle East, as demonstrated by its inability to assist allies like Iran effectively. “In terms of military balance, the US is demonstrating what being a superpower really means,” observes Shetler-Jones. “Beijing is not equipped to protect its friends against this kind of action, even if it wanted to.”
This complex dynamic has led China to explore diplomatic avenues, with Foreign Minister Wang Yi initiating discussions with counterparts in Oman and France, and announcing plans to send a special envoy to the region. China’s aim appears to be positioning itself as a responsible counterbalance to US influence, particularly as it prepares for a significant meeting with President Trump later this month.
The Uncertainties of US Leadership
As Beijing contemplates its next moves, the unpredictable nature of US foreign policy under President Trump adds a layer of complexity. Despite criticising US and Israeli strikes against Iran, China has refrained from directly targeting Trump, possibly to facilitate smoother diplomatic interactions during the upcoming meeting. “China may see this as a chance to look for cues on how Trump may respond to other flashpoints,” Shetler-Jones suggests.
As the situation evolves, some within China may view this crisis as an opportunity to critique Washington’s approach to international relations, portraying the US as a warmonger. However, the inherent instability of American foreign policy is a source of concern for Beijing, which prefers not to navigate a world dominated by an erratic superpower.
Why it Matters
The ongoing conflict in Iran poses significant implications not just for China, but for the broader global landscape. As Beijing grapples with the effects of regional instability on its economic ambitions and geopolitical strategies, the potential for disruptions in energy supplies and trade routes could reverberate well beyond the Middle East. For nations reliant on stability in these areas, the unfolding events could lead to serious economic ramifications, especially in the Global South, where food shortages and economic instability may soon manifest. As the situation continues to develop, China’s approach will be critical in shaping the future of international relations in this volatile region.
