China adopts a “cautious observer with strategic patience” approach to a potential US-Iran war, balancing its key foreign policy goals of managing relations with the US and expanding cooperation with Iran. Its strategy of “hedging” across the Persian Gulf region, evident in its balanced statements, aims to mitigate risks and maintain stability.
China’s Energy Lifeline: Hormuz Transit & Economic Vulnerability Amidst Conflict
While China prioritizes energy security through diversified imports and has built substantial oil reserves, the long-term economic stability and uninterrupted transit through the Strait of Hormuz remain crucial, as 54% of its oil imports pass through this critical waterway. The potential for increased oil prices and disruption to energy infrastructure in a conflict poses a significant threat to China’s economic growth, a primary target of US containment strategies.
However, an Iranian dominance over the Strait of Hormuz could undermine US hegemony and bolster China’s counter-hegemonic strategy, offering a paradoxical benefit for Beijing’s long-term global order aspirations. This inherent conflict of interests leads to China’s cautious stance, often expressed through general, UN-style statements.
Furthermore, China is hesitant to entangle its currency, the Yuan, in international conflicts, preferring to internationalize it through responsible, multilateral, and trade-focused mechanisms rather than through security-driven disputes. This aversion to weaponizing its currency further reinforces its non-committal approach.
Ultimately, China’s strategy reflects the complex paradoxes and operational realities of such a conflict for its foreign policy, suggesting a continued stance of “cautious observation with strategic patience.”
This policy note is written by Mohsen Keshvarian Azad in collaboration with Tianxia Think Tank in 2026.
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