• Geopolitics
• China

June 23, 2025, 3:47 PM View Comments ()

The Trump administration’s strikes on Iran’s nuclear facilities may alter the trajectory of the Middle East moving forward. The United States has still not fully committed to Israel’s war with Iran, but it seems that U.S. officials are willing to expand the conflict if Iran attempts to retaliate at scale across the region.

The next steps will determine whether the worst-case scenarios become reality. States with major regional interests are bracing for the wider effects. Few stand to lose as much as China, which has been heavily involved in both Iran and the Persian Gulf states, but even facing the risk of losing billions of dollars in investment over the past decade, Beijing is still unlikely to come to Iran’s aid.

Iran’s retaliation has so far been limited to strikes, with advance warning, on a U.S. base in Qatar. On Sunday, Iran’s parliament voted to close the Strait of Hormuz, potentially shuttering one of the world’s most critical energy transit points. Iranian-backed militias are also likely to target U.S. forces and infrastructure in Iraq, Syria, and potentially Yemen.

The potential for further retaliation raises broader regional concerns—particularly for Chinese nationals and investments spread across the Middle East. China has evacuated thousands of its citizens from Israel and Iran, but its commitments go beyond the personal. For over a decade, China has tethered its Belt and Road Initiative to the development ambitions of the Arab Gulf countries.

Beijing has deepened political, economic, and social ties with the GCC as a whole, but especially with Saudi Arabia and the United Arab Emirates, as a means of anchoring its ambition for favorable long-term energy access and a stable environment for economic cooperation. Saudi Arabia and the UAE are China’s among the biggest trading partners, with investment flowing both ways. In 2022, China and Saudi Arabia agreed to over $50 billion in bilateral deals.

In contrast, Beijing has served as Tehran’s only economic lifeline. The two signed a 25-year comprehensive cooperation agreement in 2021, where China agreed to invest an estimated $400 billion in Tehran’s economy in exchange for privileged access to Iranian oil. That deal has not yet been implemented. Meanwhile, China-GCC ties have grown year over year, underscoring Beijing’s preference for GCC cooperation.

To cement Beijing’s development ambitions in the Persian Gulf, China poured considerable time and political investment into bridging relations between Saudi Arabia and Iran over the past three years, eventually producing the successful deal to restore full diplomatic ties in 2023. And, to the astonishment of many observers, Saudi-Iran ties have remained cordial, weathering close to two brutal years of regional escalation around wars in Gaza, Lebanon, Syria, Yemen, and now with Israel.

Now, Beijing is on the precipice of catastrophic economic loss and long-term damage to its energy access through the Gulf. Those ambitions hang from a very thin string of uncertainty, which will ultimately be shaped by Iran’s retaliation against Israel and, more importantly, the United States—whose legacy basing network in the GCC is a likely target for Iranian strikes.

The Strait of Hormuz is the most critical flashpoint. Roughly nearly 50 percent of China’s oil and 20 percent of the world’s oil passes through it. If Iran follows through on its parliamentary votes to disrupt maritime traffic or close the strait, it would immediately globalize the crisis, send oil prices soaring, and draw in additional military responses from the United States and its partners.

The region has seen this kind of brinkmanship before. In 2020, the U.S. military killed Iran’s leading military commander Qassem Suleimani, and Iran retaliated with strikes on U.S. bases in Iraq. Then, in 2024, Iranian-linked militias struck a U.S. military base inside Jordan, killing three U.S. soldiers, prompting U.S. retaliatory strikes in Iraq and Syria. The most recent strikes last week were the first U.S. attacks that targeted Iran’s nuclear facilities. The risk of miscalculation is high. Closing the Strait of Hormuz would directly violate China’s long-standing red line and pose an immediate threat to Beijing’s energy supply.

In recent years, China has emphasized in its Global Security Initiative and bilateral Gulf partnerships that the free flow of oil through the strait is not just a commercial concern but a strategic imperative. Beijing will not look kindly on any tampering with maritime access near Hormuz or the risk of being cut off from its energy lifeline.

U.S. Secretary of State Marco Rubio urged China to stop Iran from closing the Strait of Hormuz, a step Beijing is likely already pressuring Tehran to avoid. Shutting the strait would cut off Iran’s own oil lifeline to Chinese buyers, income Tehran can’t afford to lose as it faces a long road to reconstruction. In such a case, China would likely be forced to turn to Russia for emergency energy imports—an option fraught with logistical, diplomatic, and reputational costs.

A regional war may also force the closure of Gulf ports and airspace due to missile threats or air defense saturation. Commercial flights could halt for an indefinite period. This would trap millions of foreign nationals and migrant workers in high-risk areas. Land evacuation through Saudi Arabia would become one of the few viable options. But border infrastructure is not designed for mass civilian movements, and this could create major transport bottlenecks. Saudi Red Sea ports such as Jeddah and Yanbu would be critical for onward evacuation, but these routes could also face risk if the conflict expands westward.

The risk of further escalation raises the specter of a broader regional evacuation if conflict expands beyond Israel and Iran. There are an estimated 400,000 Chinese nationals in the UAE alone. These include construction and logistics workers, tech entrepreneurs, oil and gas technicians, and small business operators. A large-scale evacuation from the Gulf would be one of the most complex and high-stakes noncombatant operations China has ever attempted—surpassing the scale of the Libyan operation in 2011 or the Sudanese one in 2023 and requiring deep cooperation with Gulf states already under stress.

China has also poured hundreds of billions of dollars into the Gulf’s development ambitions. Chinese state-linked companies and financial institutions have signed joint cooperation agreements and co-invested in sovereign wealth funds, clean energy ventures, and emerging technology sectors. A protracted war in the region risks collapsing years of economic diplomacy and forcing Gulf states to delay or freeze key projects—not out of political rupture, but due to sheer operational paralysis.

Despite these challenges, Beijing does not see much of a role for itself in a conflict that remains squarely in the domain of the United States. While Chinese President Xi Jinping has offered to mediate if there is a shared will, neither Israel nor Iran seems intent on de-escalating anytime soon. Unlike the Saudi-Iran negotiation, where there was a degree of mutual desire to reach an agreement, both Israel and Iran appear committed to undermining the other. This standoff is not simply about deterrence; it is about dominance. And that posture puts other regional actors in harm’s way and risks collateral damage to third parties, including China.

Beijing doesn’t want deeper Middle East entanglements because it knows there’s no clean exit. Unlike the United States, which has military assets and alliance infrastructure in the region, China lacks the tools—and the appetite—for direct intervention. Its strategy has been to build influence through infrastructure, trade, and diplomatic balancing. A broader war upends that model. If forced to choose sides or take coercive measures, China risks unraveling its hard-earned neutrality, jeopardizing relations not just with Iran but also with key Arab partners such as Saudi Arabia and the UAE.

Even if Beijing wanted to rein in Tehran, it has limited leverage. Iran values the relationship but is unlikely to take direction from China. There’s no defense pact, no military alliance, and no guaranteed oil-for-compliance bargain. China could threaten to curb its economic cooperation or delay investments, but doing so risks pushing Iran further into isolation or deeper into Russia’s orbit. Right now, China’s strongest card is quiet diplomacy, urging restraint behind closed doors, but publicly staying out of the line of fire. This means a posture of risk management, not risk taking. And it shows just how little control Beijing actually has over Iran when the missiles start flying. The United States remains in the driver’s seat.

Beijing will not come to Tehran’s aid. Xi may urge restraint, call for dialogue, and attempt quiet diplomacy behind the scenes. But China will not risk its broader standing in the Gulf—or its long-term strategic interests—by aligning itself with a partner it cannot control and a conflict it cannot shape. For Beijing, stability is strategic. Right now, Iran is not.