To Jump In Or Not: China On The Iran Conflict

Srikanth Kondapalli

The latest crisis in the Persian Gulf is not only testing regional stability but also great-power behaviour in an era of shifting influence. For China, whose economic and strategic interests are deeply tied to West Asia, the stakes are immediate and significant. Despite this, Beijing has opted for a calibrated, cautious approach rather than decisive leadership. Does this reflect a deliberate strategy, or structural limits to its power projection?

The conflict in the Persian Gulf since 28 February is unnerving China, as it is other countries. Unlike previous conflicts, however, the US–Israel military actions against Iran and the latter’s retaliation have led to spillover across the entire West Asian region, threatening to spread globally through disruptions to energy flows.

For China, the world’s largest crude oil importer, the conflict—and the shutdown of the Strait of Hormuz restricting energy flows—could trigger inflation and constrain outbound trade, thereby affecting its economic growth prospects, already reeling from pandemic-related disruptions and tariffs.

For a leadership that vowed to “accomplish something” (Xi Jinping’s fenfa youwei), recent conflicts in Ukraine, Gaza, India-Pakistan, Venezuela, and currently Iran suggest a pattern of passive responses rather than the prescribed active diplomacy or defence. China has engaged in these conflicts, but indirectly—through diplomatic overtures, arms transfers, and real-time data exchange.

Diplomatic Manoeuvring

Diplomatically, China has made its presence felt in the UN Security Council and its parleys with Russia, Iran, and others. Its foreign ministry spokesperson called for an immediate cessation of hostilities and a return to a negotiated settlement. Foreign Minister Wang Yi made 11 phone calls to concerned counterparts in the region, excluding the US. Special Envoy Zhai Jun also visited the UAE and Saudi Arabia.

Some in China argue that the Iranian conflict could lead to a new world order without US dominance

China’s Permanent Representative to the UN, Fu Cong, criticised US and Israeli actions as lacking “justification and legitimacy”, while also stating that China “does not go along with Iran’s attacks against Gulf Arab states and condemns all indiscriminate attacks against innocent civilians and non-military targets”.

China had coordinated with Russia on several Security Council resolutions over the past two decades concerning Palestine, Syria, North Korea, Venezuela, Zimbabwe, and Myanmar. Iran has also recently joined the SCO and BRICS. As a gesture, China donated $200,000 to the parents of victims of the Minab school attack in southern Iran. It has also advised its citizens to leave the war-torn region.

The Energy Factor

Most significantly, to fuel the world’s second-largest economy, China has become a net importer of energy resources. More than half of the nearly 570 million tonnes it imported in 2025 came from West Asia, with Saudi Arabia, Iran, Iraq, Qatar, and others contributing.

Iran became one of Beijing’s largest crude oil suppliers by exporting 10% of China’s needs in 2025, evading US sanctions. This constituted about 80% of Iran’s total oil exports. While China also imported oil from Russia, often at a discount, it seeks diversification to reduce dependency.

To mitigate energy disruptions, China had plans to develop eleven strategic oil reserves across the country, with four developed by 2008; it intensified efforts again in 2023 amid the Russia–Ukraine conflict. Today, it holds an estimated 1.2 billion barrels of reserves—enough to cushion the country for nearly three months.

As soon as oil flows through the Strait of Hormuz—through which a third of China’s energy passes—were disrupted, China suspended refined fuel exports. Nevertheless, it is bracing for increases in energy prices, insurance costs, and supply disruptions.

Wang Yi’s phone call to his Iranian counterpart on 2 March aimed to remove obstacles to oil flow and protect China’s investments in regional infrastructure. China has invested more than $200 billion in West Asia, with an estimated 47% directed towards the energy sector.

As part of its Belt and Road Initiative, China signed an estimated $350 billion, 25-year agreement with Iran in 2021 to construct infrastructure such as energy pipelines, roads, and high-speed railways, linking it to China via Central Asia.

This also facilitates two-way trade, which jumped from $36 billion in 2004 to over $400 billion in two decades with West Asia. China is the region’s largest trading partner. China-Iran trade stood at over $13 billion in 2024 but fell to under $10 billion in 2025, underscoring Iran’s relatively small share in China’s broader regional trade.

Regional Security

China’s relations with Iran have been solidified since the 1979 Islamic Revolution. Iran has also been useful to China in countering Western sanctions on the Xinjiang Uyghur issue. China has established “comprehensive strategic partnerships” with Iran, Saudi Arabia, and the UAE.

China’s perceived alignment with Tehran risks eroding its influence in the wider region, given the attacks on other West Asian countries

China also helped bring Saudi Arabia and Iran together in 2023 under its Global Security Initiative. However, the current conflict has undermined this reconciliation. Moreover, China’s perceived alignment with Tehran risks eroding its influence in the wider region, given the attacks on other West Asian countries.

US Decline

Some in China argue that the Iranian conflict could lead to a new world order without US dominance. Chinese analysts have long argued that the US is in decline due to its interventions in Iraq, Kosovo, Afghanistan, and elsewhere, alongside domestic debt and the weakening dollar. China aspires to replace the US in West Asia.

The barrage of interceptor missiles and other weapon systems used by the US and Israel to counter Iranian kamikaze drones and hypersonic missiles has strained US inventories. Chinese analysts observe that a distracted and depleted US could make a future invasion of Taiwan more feasible.

The redeployment of US radar systems from South Korea and the USS Tripoli from Japan to West Asia has not gone unnoticed by China—or its ally North Korea. While China briefly reduced military exercises in the Taiwan Strait in late February, it soon resumed them, flying 16 fighter aircraft. North Korea also launched missiles across the Sea of Japan, taking a cue from Beijing.

Chinese analysts observe that a distracted and depleted US could make a future invasion of Taiwan more feasible

Iran’s proposal to allow oil tankers through the Strait of Hormuz only if transactions are conducted in renminbi aligns with broader efforts to de-dollarize trade, fitting into China’s push within BRICS and its cross-border payment systems.

Arms Exports

Stockholm-based SIPRI and other sources indicate that China has strengthened Iran’s defences since the 1980s by supplying several squadrons of J-6 and J-7 fighter aircraft, Yun-12 transports, 21 types of missiles, YLC-8B radar systems, air defence systems and Wing Loong drones. Reports suggest China transported additional military equipment to Iran in January 2026 via 16 Y-20 flights.

While Chinese-supplied drones and missiles may have benefited Iran, China’s air defence systems performed miserably in this conflict, as in Operation Sindoor last year. Nevertheless, as in that case, China appears to use such situations to test its arsenal, compensating for its lack of real combat experience.

More significant is Iran’s shift from the US-based GPS to China’s BeiDou-3 Navigation Satellite System in June 2025. This helped Iran overcome jamming and improve targeting accuracy against US and Israeli installations, though strike accuracy data remains unavailable.

Additionally, China, Iran, and Russia conducted the “Maritime Security Belt” naval exercise last month in the Strait of Hormuz, continuing a series begun in 2019, focusing on counter-piracy and trade route protection.

China’s reluctance to openly support Iran in the current conflict reflects concerns that the US will redirect its ire towards Beijing once this crisis subsides, complicating its strategic rise and ambitions to invade Taiwan. For Beijing, Tehran is not a close ally but a minor trading partner and a useful instrument for showcasing “united front” tactics and cushioning its ascent. At the same time, Beijing is willing to experiment and expand controlled grey-zone warfare against the US, raising costs for its rival.