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As China navigates the fallout from the US-Iran conflict, its diplomatic and economic balancing act grows increasingly complex.Washington TodayChina, the world’s largest energy importer, has weathered the global energy shock from the US-Iran conflict better than some neighbors. But as fuel prices rise and US sanctions impact Iranian oil exports, the economic stakes are growing for Beijing just as President Xi Jinping prepares to meet with President Trump.
Why it matters
China’s close ties to Iran and its reliance on Iranian oil imports put it in a delicate position as the US ratchets up pressure on Tehran. Beijing must balance its diplomatic support for Iran with the economic realities of rising energy costs and potential supply disruptions, all while navigating high-stakes negotiations with the US.
The details
China has built up significant oil reserves and diversified its supply to cushion the impact of the global energy crisis. However, rising fuel and transportation costs are starting to ripple through the Chinese economy, threatening to undermine growth. Beijing has intervened to stabilize prices, but the longer the conflict drags on, the greater the risk to China’s export-driven economy.
- In March, China’s factory-gate prices turned positive for the first time in over 3 years.
- Last month, the US removed certain sanctions on Iranian oil, sending global prices soaring.
- This week, the US launched a military blockade of Iranian ports, threatening to further disrupt oil exports.
The players
Donald Trump
The President of the United States, who is expected to visit China next month to meet with President Xi Jinping.
Xi Jinping
The President of China, who will host President Trump for high-stakes diplomatic talks.
Wang Yi
China’s top diplomat, who has been calling for peace in the US-Iran conflict.
Ishaq Dar
The Foreign Minister of Pakistan, where recent US-Iran peace talks were hosted.
Yun Sun
Director of the China Program at the Stimson Center think tank in Washington.
What they’re saying
“With more Chinese interests at stake, the US may be able to get China more involved in pushing Iran toward a negotiated solution.”
— Yun Sun, Director, China Program at Stimson Center
“China will resort to diplomatic pressure, including bilateral and multilateral to push for the speedy lifting of the blockade.”
— Yun Sun, Director, China Program at Stimson Center
What’s next
The outcome of President Trump’s expected visit to China next month will be closely watched, as Beijing seeks to balance its support for Iran with the economic realities of the global energy crisis.
The takeaway
China’s delicate diplomatic and economic balancing act in the face of the US-Iran conflict underscores the high stakes for Beijing as it navigates rising energy costs, potential supply disruptions, and complex geopolitical tensions with its top trading partner.
