Live updates: Follow the latest news on US-Iran war
In a crisis such as the current war in the Gulf, it seems natural that the second superpower would be deeply involved. Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi, made his first official visit to China last week. President Xi Jinping is scheduled for a summit with US President Donald Trump in mid-May.
But beyond restatements of routine positions, Beijing has said and done little publicly. Is the war a strategic threat or opportunity for China; an economic blow or windfall?
Varied views
The first view is that Mr Trump’s attack on Iran is some gambit of 4D chess, designed to confound China.
Today’s international situation has some similarities with that before both World Wars. The First World War was preceded by several limited conflicts as great powers weakened, such as the Ottoman Empire in the Middle East and Balkans, or rising powers challenged the status quo.
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Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi, is received by Xi Jinping, President of China, during an official visit to the country. All photos unless otherwise stated: Abu Dhabi Media Office -
Sheikh Khaled is in Beijing with a UAE delegation, the visit aimed at advancing bilateral ties between the allies -
Talks taking place between the Emirati and Chinese delegations -
Ways to strengthen deep-rooted ties across sectors, and expand economic and investment partnerships to encourage sustainable growth were discussed -
Sheikh Khaled leads the UAE delegation into the negotiations -
Sheikh Khaled and Li Qiang, Premier of the State Council of the China -
The meeting took place during an official reception hosted by the Premier of China for the Crown Prince of Abu Dhabi -
Sheikh Khaled during the meeting. Photo: Abu Dhabi Media Office -
Sheikh Khaled witnessed the signing of several preliminary agreements the previous day -
Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc -
Sheikh Khaled arrives in Beijing. Wam
The run-up to the Second World War involved autocratic forces on the march, including Japan’s megalomaniac attempt to conquer China. Free international trade broke down. Nazi Germany, Imperial Japan, fascist Italy, sought to carve out self-sufficient spheres of influence including critical resources of farmland, coal, iron ore and oil, in emulation of the US and the British Empire.
Today, the US overthrow of Venezuela’s President Nicolás Maduro in January was widely seen as a bid to control the country’s vast, if sticky, oil reserves. Before the raid, this was mostly sold to China at significant discounts.
Now comes the campaign against Iran, which is aligned with Moscow and, partially, Beijing. In this view, weakening Iran or replacing its regime with a more US-friendly one would further limit China’s energy supply options. Perhaps this is a counterweight to Beijing’s dominance of rare earths and other critical minerals.
But seeing Mr Trump as a latter-day Bismarck or Kissinger is overthinking by armchair geopolitical strategists. The American military presence in the Gulf was always capable of denying oil from Iran or other countries to China in the event of a conflict, for instance over Taiwan. The US let Iran keep exporting oil quite happily for the first month of this fight, before imposing a blockade.
The second view is that, even without a conscious US strategy, the war is still bad for China. Mr Trump said that China obtains 90 per cent of its oil through the Strait of Hormuz (it is actually about 47 per cent of its imports). Iran’s Islamic Revolutionary Guard Corps closed the waterway again on Saturday, firing on an Indian very large crude carrier (VLCC).
As the US is now a huge oil and gas exporter, the war and the blockade of Hormuz may do more damage to the Chinese economy. As neighbouring Asian countries suffer, China’s export industries will stall. A serious global recession will hit China worse than the more closed American economy.
The third interpretation is that China will gain, making the war a colossal US blunder which empowers its great rival. Washington has lost allies and credibility, and looks like a rogue state, beside the self-interested but at least predictable Beijing.
China’s energy security is much better than that of Europe or most of its Asian neighbours, including US partners such as South Korea, Taiwan and Japan. It has secure access to imports of Russian oil and gas by pipeline. It is a significant oil and gas producer in its own right, and it has squirrelled away oil stocks equivalent to at least 115 days of its seaborne imports.
It is not very dependent on buying liquefied natural gas, as it can turn to domestic coal, renewables and nuclear power. Its booming electric vehicle sector means its oil consumption is dropping anyway.
Even more importantly, through companies such as BYD and Jinko, it already dominates global manufacturing of batteries, solar and wind systems, and electric cars. These are already getting a huge boost as high petroleum prices and worries about energy security send consumers worldwide looking for alternatives.
A fourth view is that the conflict presents perils for China, but also a geopolitical opening. The relatively stable global economic and political architecture, in place since the end of the Cold War, has been shattered. Since China joined the World Trade Organisation in 2001, it has been happy to benefit from such institutions, even if it resented and sought to erode their domination by western interests.
Core interests for China
Freedom of trade and freedom of navigation are two other core interests for China, as the world’s leading exporter. It is reliant on colossal imports of raw materials: not just oil and gas, but also fertilisers, sulphur, iron ore and many more.
Consequently, China has played a diplomatic part behind the scenes, helping to cajole its ally Pakistan into fronting negotiations.
But it has not fulfilled the promise of its mediation of the 2019 Saudi-Iran rapprochement, now a faded memory, that Beijing would ensure both sides stuck to the bargain, and that it would restrain Tehran from further attacks against Riyadh.
China will not side overtly with Iran; its relations with the Gulf countries are ultimately much more important. As Sheikh Khaled’s visit shows, Abu Dhabi, as well as Riyadh and Doha, want deeper economic relations and ideally more diverse security partnerships. They want neither abandonment nor over-reliance on an erratic Washington.
Russia's gain
The US has accused China of supplying weapons and targeting information to Iran. However, the Russian role is much more overt, providing drones and lists of key energy sites in Israel. Moscow has benefitted greatly from the war: much higher oil and gas prices, and the relaxation of US sanctions on its petroleum sales.
This was the price Washington paid for eliminating Beijing’s ability to buy discounted Russian and Iranian oil. China has become a close partner of Russia’s, but it has very much the upper hand, especially since Moscow’s foolish invasion of Ukraine.
Perhaps a postwar regime in Tehran will embrace the Deng Xiaoping playbook: social loosening but tight political control at home, unleashing its people’s capitalist energies, and warming up relations with the outside world. That would present opportunities to China, but to the US and many other countries too, including the Gulf.
For now, China is not about to play a visible, active role in peacemaking or Gulf security. It may be quietly satisfied to see the US blunder, but chaos on the high seas is perilous for it, too. Better to bide its time, while VLCCs steadily become less important than BYD.
