01/04/2026

China’s delicate balancing act in the Middle East

The attacks by the United States and Israel against Iran affect Chinese interests in the Middle East across several highly sensitive dimensions for its economy and for its positioning as a global stabilizing power. The conflict compels Beijing to maintain a delicate balance so as not to further strain its relationship with Washington.

From Beijing’s perspective, the attacks on Iran and the broader conflict in the Middle East impact China’s interests in multiple ways. First, the war disrupts the fragile balance of power in a strategically sensitive region of global significance,an area that is critical for the projection of China’s external interests and for the deployment of an active diplomacy aimed at expanding its influence as an emerging power. It is also a key region for China’s “energy security,” given that Iran and other Gulf economies constitute its main oil suppliers.

Within this framework, Chinese leadership perceives a strong correlation between U.S. intervention in Venezuela and the attacks against a key regional partner such as Iran. The current scenario reinforces China’s perception of interlinked and concurrent disruptions generated by the United States in countries allied with and/or partnered with China, as part of a perceived broader strategy of “containment” of its global power. These tactical moves extend to Cuba, a historic regional ally of China and a key actor in its objectives regarding power projection, ideological influence, and support for anti-U.S. positions in Latin America and the Caribbean. For Chinese leadership, these maneuvers appear to revive the logic once articulated through the “domino theory.”

Second, beyond the geopolitical impacts generated by U.S. military actions, there is an adverse impact on the long-term interests of a China that has sought to position itself as a guarantor of regional stability. By adopting a non-interventionist stance, China sees its accumulated influence,largely built through the patient application of soft power over the past decade,gradually eroded.

Third, attacks on energy infrastructure cast doubt on the secure supply of Iranian oil and gas required to sustain China’s growing demand. At the same time, they compel a reconfiguration of logistical circuits to ensure continuity in crude flows destined for refineries and industrial complexes in China. These inputs are essential for fuel production, but also as raw materials for petrochemical industries producing fertilizers, lubricants, and plastics (polymers). These sectors are embedded in broader value chains extending to semiconductor manufacturing, the automotive industry, aerospace, and telecommunications, among others. This scenario is further compounded by risks faced by Chinese financial entities (for example, the Bank of Kunlun), which provide credit for infrastructure, services, and industrial projects and whose assets may become targets.

A COMPLEMENTARY RELATIONSHIP

Although over the past five years China has diversified its economic relations with other Gulf economies to mitigate supply risks, in 2025 Iran ranked as the third-largest exporter of oil to the Chinese market (13% of total imports), after Saudi Arabia and Iraq. Approximately 80% of Iran’s total crude exports are destined for Chinese refineries[i], a flow of goods, services, and energy inputs largely carried out through the so-called “shadow fleet,” composed of Chinese cargo vessels operating under third-country flags to evade international sanctions, whose passage through the Strait of Hormuz is not restricted.

This growing economic interdependence is grounded in a mutually beneficial and complementary relationship that serves the interests of both parties. China provides economic support to a vulnerable Iran under international sanctions through crude imports, the deployment of investments, technological cooperation, and defense ties. In turn, Iranian leadership regards China as a key partner in sustaining a “resistance economy” model aimed at enhancing resilience against recurrent external pressures.

Regarding Chinese investment in the region,and particularly in Iran,data from Eurasia Group indicates that between 2019 and 2024 Chinese firms invested USD 89 billion in Middle Eastern economies. Both state-owned and private Chinese companies operate in strategic sectors, integrating Iran into logistics corridors within the framework of the Belt and Road Initiative (BRI), including port infrastructure, highways, desalination plants, rail corridors, and facilities linking ports and terminals in both countries.

Iran’s resource-rich geography also enables access to strategic minerals. According to Iran’s Organization for Technical and Economic Assistance (2026), the country ranks sixth globally in zinc reserves, seventh in copper, ninth in iron ore, and fifth in gypsum and barite[ii]

Thus, despite direct and indirect impacts, such as rising transportation and insurance costs due to geopolitical risk, the effect on Sino-Iranian trade is partially mitigated. In order to circumvent international sanctions, bilateral trade is conducted largely in yuan (CNY/RMB). Moreover, Chinese shipping operators such as COSCO are not direct targets of Iranian restrictions in the Strait of Hormuz, while China’s “shadow fleet” continues to supply terminals, complemented by land-based logistics corridors,for example, between Tehran and the port of Yiwu in Shanghai.

A SOPHISTICATED DUAL-TRACK APPROACH

Chinese diplomacy seeks to play an active role in the Middle East as a stabilizing power, with the objective of ensuring the free flow of critical energy inputs for its demand-driven economy. Although the United States includes Iran (alongside China) within the so-called “axis of autocracies,” China will continue to maintain stable relations with Iran, regardless of changes in leadership, as part of its effort to counter attempts at international isolation led by Washington.

Iran will remain a key actor in China’s regional strategy, aimed at securing stability and energy supply, as well as a destination for Chinese exports of goods and services. It is a territory integrated into the BRI and attractive due to its endowment of mineral resources such as zinc, copper, uranium, and rare earth elements (REE).

In a dynamic environment, China navigates a delicate balance between its commitments in and with Iran and those undertaken with countries such as Saudi Arabia, the United Arab Emirates, Iraq, and Qatar. This sophisticated dual-track approach in Chinese strategic calculations seeks to avoid adding further strain to its relations with the United States and to preserve the rapprochement achieved with Israel.

With regard to Iran’s nuclear program, Beijing has expressed its opposition to the development of nuclear weapons, while continuing to support Iran’s right to utilize nuclear capabilities for peaceful purposes.

Sergio Cesarin is coordinator of the Center for Asia-Pacific and India Studies (CEAPI, UNTREF) and a researcher at CONICET.

[i] https://www.uscc.gov/sites/default/files/2026-03/China-Iran_Fact_Sheet_A_Short_Primer_on_the_Relationship.pdf

[ii] https://hagueresearch-org.translate.goog/rare-earth-elements-and-iran-a-new-geopolitical-front/?_x_tr_sl=en&_x_tr_tl=es&_x_tr_hl=es&_x_tr_pto=tc