In the past, the conventional wisdom was that a destabilising war in the oil-producing heart of West Asia could badly destabilise China, the world’s leading oil importer, and its already slowing economy. Those assumptions have proven outdated. China has weathered the US/Israeli war with Iran better than many of its neighbours and treading a cautious path forward as opportunities emerge to profit from the emerging situation.
As Xi Jinping watches Vladimir Putin and Donald Trump launch wars on overmatched opponents, only to face unwelcome surprises, China’s strongman has avoided unnecessary risks to position his country for long-term strength and stability. We saw Xi’s caution in his responses to both the Covid pandemic and China’s structural economic weaknesses of recent years. We also saw it in Xi’s unwillingness to directly support Russia’s war in Ukraine, or even to recognise President Putin’s territorial claims. Now we see it in Xi’s unwillingness to criticise Trump’s bombing campaign in Iran. The invitation remains open for the US president to visit Beijing next month.
Nor is China as damaged by this war, and the massing of firepower in and around the strategically vital Strait of Hormuz, as it would have been even a few years ago. Its oil stockpiles and strong refining capacity limit the risk of near-term fuel shortages. Its pipeline gas imports and domestic gas production now ease its need for LNG. Beijing can always get more energy from friendly countries, particularly Russia, and can turn to both its vast coal reserves and its renewables.
The war has even provided some advantages. China’s fully integrated supply chains make it better able than rival exporters to contain production costs. And the continuing disruptions to energy shipments through the Strait, which have sharply increased both oil prices and the cost of insurance for shipping, will boost demand for China’s clean tech exports, lifting long-term investment in electrification while diversifying away from oil and gas. These processes were well underway before this war, but the conflict’s destruction of energy infrastructure and fears of more to come will now accelerate them.
Strategically, China also benefits from a war that has weakened American firepower. The war has depleted US stockpiles of long-range cruise missiles and interceptors, and it will take years to rebuild them, creating shortages that deepen Washington’s already deep dependence on Beijing’s exports of the critical minerals needed for production of new weaponry and ammunition. Washington could find workarounds to China’s restrictions in the next three to five years, but a decade is a more realistic timeframe. In the meantime, this problem will leave President Trump with a weaker negotiating hand in interactions with his Chinese counterpart. Beijing also benefits from ongoing damage to America’s reputation as a reliable international actor as both wealthy and developing countries look to hedge their bets on Washington’s foreign policy future.
Not that China is ready to take on more risk. Not even a distracted superpower that’s currently short on available weaponry will persuade President Xi Jinping to invade or quarantine Taiwan in the coming months. The war in Iran allows China’s military leaders to study the US military’s newest uses of air and naval power, and even to understand how the Americans are now using Artificial Intelligence (AI) to make war. That might be useful in the future. But Xi is well aware that Chinese forces haven’t faced a shooting war since a 27-day border clash with Vietnam 47 years ago — and China has never fought a naval battle.
On April 3, Xi purged yet another senior member of his government, a politburo member involved directly in defence spending and procurement. Xi’s moves against Communist Party heavyweights with direct or indirect ties to the People’s Liberation Army (PLA) has produced the most extensive purge China has seen since the 1980s. It’s another sign that Xi believes the PLA isn’t ready for an ambitious military undertaking that would surely produce its own share of unwelcome surprises.
Nor did China feel any need to get involved in the war in West Asia. Its leaders appeared confident in a resilient Iran’s ability to raise the costs for an increasingly unpopular superpower, and they were confident that Trump will not get the regime change in Tehran he once said he expected. Xi also knows that every country in West Asia recognises the importance of good relations with Beijing for reconstruction and the region’s future stability — particularly, if as expected, China plays a role in the multinational policing force that ensures the post-war Strait of Hormuz remains open long-term.
China is still the region’s biggest oil customer. Trade between China and West Asia, which has tripled in the past two decades, will continue to grow. The region has also become an increasingly important market for Chinese exports, including green tech, and the deployment of Chinese cloud architecture, AI platforms, and smart city systems. Beijing’s diplomatic approach will remain unaligned and carefully balanced to preserve a commercially smart image of neutrality that protects it from getting caught up in the region’s various rivalries.
All that said, if the two-week ceasefire (which it helped broker, according to some reports) breaks down and the war continues longer than a few more weeks, China will become more vulnerable. Xi has to be nervous about President Trump’s continual willingness to use military force to get what he wants from governments he sees as unfriendly. Nor is Beijing happy to see a transactional president with whom many Chinese officials believe they can make deals to cede ground in Washington to a more hawkish posture.
They also know that medium-term economic disruptions, from further damage to energy infrastructure in West Asia, and the threat to the physical security of Chinese tech infrastructure remain a risk. Nor will it help China’s flagging economy if markets in Asia and Europe suffer the kind of slowdown that cuts into their imports of Chinese-made goods.
In short, China can (so far) count itself among the very few winners in this war.
Ian Bremmer is the founder and board president of Eurasia Group Foundation. The views expressed are personal
