The Investigator | No. 05/2026
One casualty of the strikes on Iran should be the ugly acronym ‘CRINK’ to refer to the People’s Republic of China (PRC), Russia, Iran and North Korea. Although the four countries share an opposition to the United States (US) and its allies and partners, there is little that unites the PRC to the others beyond the Chinese Communist Party’s (CCP) solipsistic pursuit of its own interests.
To the extent that such descriptions matter, Beijing describes relations with Iran as at the lower level of ‘comprehensive’ rather than as an ‘all-weather’ strategic partnership. The CCP has no inclination to venture out into the current storm. Overall, the scorecard of war is always negative, but not uniformly so – there are both upsides and downsides for the PRC.
The upsides
There are upsides which are already visible, and there are potential upsides.
The former include:
A propaganda gift: In its efforts to gain international support in its ‘struggle’ with the US, particularly with so-called ‘Global South’ nations, the CCP presents itself as a force for peace in contrast with a disruptive America. If Venezuela was exhibit number one, Iran and the resultant wider conflict in the Middle East allows the CCP to point out the contrast even more strongly: the US’ destructiveness is not just a phenomenon confined to its own hemisphere.
A disruption of unity between the US and its allies: America’s allies fail to see the rationale for the strikes on Iran, and resent the lack of warning and economic fallout. The attacks made by Donald Trump, President of the US, on Sir Keir Starmer, Prime Minister of the United Kingdom (UK), are the most obvious symptom.
Potential benefits to the CCP include:
A possible reduction in attention towards the Indo-Pacific: As well as this, there is the possibility of reduced resources for America in the region.
A possible reduction in arms for Taiwan: If the US gets bogged down in the Middle East, this may reduce the availability of arms for Taiwan – as well as undermine the willingness of the American people and US Government to defend Taiwan in the event of a crisis.
Economic opportunities: When the conflict ends and reconstruction in Iran and the Middle East commences, Chinese companies will gain considerable business.
The downsides
Energy supplies and prices: The PRC imports around 13% of its oil from Iran. US sanctions have meant a cheaper price, and trade is conducted in Chinese yuan – both to the PRC’s benefit. Around 54% of the PRC’s oil and gas comes from the Middle East via the Straits of Hormuz. If Iran continues to block those shipments, Beijing will eventually face an energy crisis, even if it has been wise in building up reserves.
Decrease in exports: While the Iranian market for Chinese goods is not enormous, perhaps around the equivalent of US$9 billion (£6.7 billion) in 2025 (although given shipments via third countries and measures to get around American sanctions, the figure is likely to be higher than official statistics report), exports will be down in 2026.
Threats to investments: While Chinese investments in Iran are relatively small – between US$2-3 billion (£1.5-2.2 billion) out of a promised US$400 billion (£297.2 billion – those in Saudi Arabia and the Gulf states are not. Iran’s attacks on Gulf states threaten these investments.
Decline in international image: Since the commencement of strikes by the US and Israel, the PRC has been shown not to be the influential global player it likes to portray itself as.
Consequences yet to be determined
Longer-term consequences of the conflict will only emerge later. Beijing will be worried about:
Whether the conflict will weaken or strengthen American power in general: It must hope for the former, but cannot rule out the latter.
The possibility of revolution in Iran leading to the establishment of a pro-‘Western’ government: This seems unlikely, but again cannot be ruled out.
Two other effects
Two other potential long-term effects are worth noting:
The US-Israel-Iran conflict benefits Russia and hurts Ukraine: A rising price of oil helps the Russian economy to finance its war effort. Close though the alignment of Chinese and Russian interests are, who wins in the invasion of Ukraine is not of overwhelming importance to the CCP, although it would prefer that a Ukrainian victory does not lead to its acceptance into a more unified European Union (EU). What matters in the longer term is continued cheap energy from Russia; food, minerals and other resources from a peaceful Ukraine; and involvement in post-hostilities reconstruction on both sides.
Taiwan’s energy problem (it imports almost all of its oil and gas) and the effect on semiconductor and component manufacture is a potential longer-term worry: The PRC’s economy is still deeply dependent on these areas. A long blockade of the Straits of Hormuz by Iran could lead to a semiconductor crisis, affecting both the Chinese and the global economy.
Finally, it is worth stating that there is no evidence to suggest that the US began the conflict with Iran in order to hamper the PRC’s development. This may be an effect, but it was not the cause. Beijing hopes to win the long-term struggle with Washington by winning what it sees as the science and technology, economic systems, and ideology and global opinion wars. Current events in the Middle East may represent a setback in that aim, but not a big one for the CCP.
Charles Parton OBE is Chief Adviser to the China Observatory at the Council on Geostrategy.
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