China Power | Diplomacy | East Asia

A Partnership of Convenience: Why China Isn’t Intervening On Iran’s Behalf  

The intense U.S. bombing of Iran reveals the limits of Beijing’s relationship with Tehran and the pragmatism of China’s Middle Eastern strategy

At the outset of the Israeli-U.S. attack, Iran’s ailing Supreme Leader Ayatollah Ali Khamenei, along with hundreds of Iranian civilians, was killed. China condemned the United States for “flagrantly violating” Iran’s sovereignty and territorial integrity, just as it did in the aftermath of the Venezuela operation. However, rhetoric aside, China has taken no concrete action.

Some observers contrast the United States’ projection of military power at muzzle velocity with China’s inaction. They argue that Beijing can do little but watch its friends fall one by one, seriously diminishing its global influence. However, this view overlooks key features of China’s regional strategy. The decapitation of Iran’s leadership does not drastically weaken China’s position in the Middle East because Beijing’s regional strategy is built on diversified partnerships rather than dependence on any single regime. Even if the current regime were to fall, China would have other partners in the region, and Beijing is flexible enough to work with any successor government.

A Partnership of Convenience

China’s restraint should not be mistaken for fecklessness; it reflects a carefully calibrated strategic choice. One reason China can afford such restraint is because Iran is not in China’s core national interest – it is a temporary resource partner rather than an ally. Besides limited defense cooperation and extending an economic lifeline to Iran, China is not willing to sacrifice much beyond that. Within China’s convoluted web of diplomatic relationship designations, Iran holds the less significant Comprehensive Strategic Partnership status – a category it shares with countries such as Poland, Rwanda, Togo, and 28 others. It falls short of the special relationships that Russia, Pakistan, Kazakhstan, and South Africa enjoy with China. Beyond diplomatic nomenclature, some Chinese scholars have noted that the Iranian regime’s confrontational posture to regional states, sanctions exposure, and wavering foreign policy complicate the development of long-term bilateral relations.

China is always looking to diversify its sources for critical energy supplies. Although China buys virtually all of Iran’s oil, Iranian crude oil accounts for 13-15 percent of China’s total imports – a sizable, but not indispensable, amount. The majority of China’s oil supply comes from Russia, Saudi Arabia, and Malaysia. China also has access to alternative suppliers who can provide flexibility in the event of disruption. According to energy experts, the impact on the Chinese economy would be minimal if there were an interruption of oil shipments from Iran.

But importing Iranian oil creates significant economic challenges to the Chinese government and Chinese companies. The main economic benefit to China in the bilateral relationship has been access to heavily discounted oil. On average, Iran offered China a discount of $10-20 per barrel below Brent crude oil prices, translating to at least a $5.8 billion in savings per year. 

Yet the transaction costs are high. To dodge U.S. secondary sanctions under the Iran Sanctions Act and other legislation, Chinese companies must rely on a clandestine network of vessels operating near Malaysia to engage in ship-in-ship transfer of Iranian oil. At times, Chinese funders have had to go as far as adopting a complex “barter-like” system in which the Chinese contractor builds infrastructure in Iran with oil sent to China as payment. Similarly, Chinese state-owned enterprises build infrastructure in Iran via Engineering, Procurement, Construction and Financing (EPCF) agreements, in which Chinese companies are the de jure borrowers of Chinese banks, instead of Iran. 

As the war continues, if the financial benefits from the Iranian discounts diminish due to intensifying sanctions, China will likely be inclined toward less politically fraught suppliers.

Pragmatism Over Instability

Although Iran is sometimes portrayed as an important pillar of Chinese diplomacy, it does not occupy a central position in China’s Middle Eastern strategy. While Beijing and Tehran signed a 25-year Comprehensive Cooperative Agreement in 2021, framed by both sides as a flagship program under the Belt and Road Initiative (BRI), much of the anticipated Chinese investment has failed to materialize. Due to U.S. sanctions, large-scale foreign capital transfers have been brought to a halt. 

At this critical juncture, some quasi-official Chinese military commentators circulated a Farsi-language video of the Iranian president on social media, claiming it showed frustration with China’s limited investment. The authenticity of the content is unverified. In China’s heavily managed internet, such opinions may reflect a degree of official tolerance of critical narratives about Tehran. 

Such skepticism extends beyond media commentary. Chinese academics question the consistency of Tehran’s China policy. Iran’s political structure enables alternating reformist and conservative administrations that produce different foreign policy priorities: “looking West” or “looking East” in Chinese analytical discourse. While moderate politicians tend to cooperate with the United States and Europe more, conservatives tend to favor stronger ties with China, complicating long-term planning for Chinese financiers that value predictability. 

More importantly, Beijing evaluates its relationships through a pragmatic, cost-benefit analysis. Hence, Iran’s sanctions exposure and small economic scale limit the depth of cooperation relative to other oil-rich Gulf Cooperation Council (GCC) states. Besides providing a substantial amount of oil, GCC states such as Saudi Arabia and the United Arab Emirates also trade with China significantly more than Iran does. According to World Integrated Trade Solution (WITS) data, while China’s total trade with Saudi Arabia and the UAE each exceeded $100 billion in 2024, its total trade with Iran was only $13.4 billion. Moreover, China exported goods worth over $65 billion to the UAE compared to approximately $9 billion to Iran. Unlike Iran, whose economic ties are constrained by international sanctions, the UAE is deeply integrated into China’s trade and logistics network through large-scale investments such as the Khalifa Port.

China’s broader regional diplomatic network also explains its restraint in the aftermath of the attack. Beijing maintains pragmatic relations with the Gulf states, and, to a lesser extent, Israel, avoiding overt alignment in regional conflicts. Escalation on Iran’s behalf, especially after Iran retaliated against GCC states for simply hosting U.S. bases, would jeopardize these relationships and risk confrontation with the United States. 

Iran’s confrontational stance toward other regional countries creates diplomatic liabilities for China. Close alignment with an increasingly isolated and disruptive government offers limited benefits. With this hierarchy in mind, policymakers in Beijing clearly prefer preserving ties with Washington and the GCC states. 

China’s Foreign Policy Does Not Hinge on Alliances

Some American observers project their own mindsets on China and puzzle over why Beijing refuses to intervene forcefully on Iran’s behalf, concluding that the lack of action signifies that China’s power is diminished. But China’s foreign policy is not structured around collective defense commitments. Unlike the United States, China does not maintain a global alliance network that is capable of defending partners in faraway places. Hence, direct military support in this context was never an option. 

What China is likely to do next is provide limited humanitarian assistance to Iran and mediate among the warring parties. Because of China’s non-interference foreign policy principle, however, Chinese-style mediation often provides the time and space for conversations without pressure for sustained development. China has tried to mediate the conflict in Myanmar, facilitated conversations among factions in Palestine, and, most notably, achieved a detente between Saudi Arabia and Iran in March 2023. Unfortunately, due to the Israeli-U.S. attacks and Iran’s counter-strikes, any attempt at peace between Iran and Saudi Arabia is back to the drawing board. Due to the intense environment, it is unlikely that China’s efforts can easily bring the parties to the negotiating table. 

Ultimately, while the killing of Khamenei, a familiar interlocutor for Beijing, is certainly unwelcome, the long-term impacts are not necessarily adverse to China. As long as the United States remains militarily engaged elsewhere, Beijing retains strategic time and space. 

Korean media recently have reported that Washington is considering moving the THAAD system, a premier ballistic missile defense shield, currently stationed in South Korea, and redeploying it to the Middle East to address the threats coming from Iran. Because the THAAD system has long been a diplomatic pain point between Seoul and Beijing, any shifts of U.S. military posture would mean a strategic victory for China. 

Longer term, a less confrontational and less ideologically extreme leadership in Iran could improve relations with other countries in the region and create an environment for economic development for the BRI. 

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At the outset of the Israeli-U.S. attack, Iran’s ailing Supreme Leader Ayatollah Ali Khamenei, along with hundreds of Iranian civilians, was killed. China condemned the United States for “flagrantly violating” Iran’s sovereignty and territorial integrity, just as it did in the aftermath of the Venezuela operation. However, rhetoric aside, China has taken no concrete action.

Some observers contrast the United States’ projection of military power at muzzle velocity with China’s inaction. They argue that Beijing can do little but watch its friends fall one by one, seriously diminishing its global influence. However, this view overlooks key features of China’s regional strategy. The decapitation of Iran’s leadership does not drastically weaken China’s position in the Middle East because Beijing’s regional strategy is built on diversified partnerships rather than dependence on any single regime. Even if the current regime were to fall, China would have other partners in the region, and Beijing is flexible enough to work with any successor government.

A Partnership of Convenience

China’s restraint should not be mistaken for fecklessness; it reflects a carefully calibrated strategic choice. One reason China can afford such restraint is because Iran is not in China’s core national interest – it is a temporary resource partner rather than an ally. Besides limited defense cooperation and extending an economic lifeline to Iran, China is not willing to sacrifice much beyond that. Within China’s convoluted web of diplomatic relationship designations, Iran holds the less significant Comprehensive Strategic Partnership status – a category it shares with countries such as Poland, Rwanda, Togo, and 28 others. It falls short of the special relationships that Russia, Pakistan, Kazakhstan, and South Africa enjoy with China. Beyond diplomatic nomenclature, some Chinese scholars have noted that the Iranian regime’s confrontational posture to regional states, sanctions exposure, and wavering foreign policy complicate the development of long-term bilateral relations.

China is always looking to diversify its sources for critical energy supplies. Although China buys virtually all of Iran’s oil, Iranian crude oil accounts for 13-15 percent of China’s total imports – a sizable, but not indispensable, amount. The majority of China’s oil supply comes from Russia, Saudi Arabia, and Malaysia. China also has access to alternative suppliers who can provide flexibility in the event of disruption. According to energy experts, the impact on the Chinese economy would be minimal if there were an interruption of oil shipments from Iran.

But importing Iranian oil creates significant economic challenges to the Chinese government and Chinese companies. The main economic benefit to China in the bilateral relationship has been access to heavily discounted oil. On average, Iran offered China a discount of $10-20 per barrel below Brent crude oil prices, translating to at least a $5.8 billion in savings per year. 

Yet the transaction costs are high. To dodge U.S. secondary sanctions under the Iran Sanctions Act and other legislation, Chinese companies must rely on a clandestine network of vessels operating near Malaysia to engage in ship-in-ship transfer of Iranian oil. At times, Chinese funders have had to go as far as adopting a complex “barter-like” system in which the Chinese contractor builds infrastructure in Iran with oil sent to China as payment. Similarly, Chinese state-owned enterprises build infrastructure in Iran via Engineering, Procurement, Construction and Financing (EPCF) agreements, in which Chinese companies are the de jure borrowers of Chinese banks, instead of Iran. 

As the war continues, if the financial benefits from the Iranian discounts diminish due to intensifying sanctions, China will likely be inclined toward less politically fraught suppliers.

Pragmatism Over Instability

Although Iran is sometimes portrayed as an important pillar of Chinese diplomacy, it does not occupy a central position in China’s Middle Eastern strategy. While Beijing and Tehran signed a 25-year Comprehensive Cooperative Agreement in 2021, framed by both sides as a flagship program under the Belt and Road Initiative (BRI), much of the anticipated Chinese investment has failed to materialize. Due to U.S. sanctions, large-scale foreign capital transfers have been brought to a halt. 

At this critical juncture, some quasi-official Chinese military commentators circulated a Farsi-language video of the Iranian president on social media, claiming it showed frustration with China’s limited investment. The authenticity of the content is unverified. In China’s heavily managed internet, such opinions may reflect a degree of official tolerance of critical narratives about Tehran. 

Such skepticism extends beyond media commentary. Chinese academics question the consistency of Tehran’s China policy. Iran’s political structure enables alternating reformist and conservative administrations that produce different foreign policy priorities: “looking West” or “looking East” in Chinese analytical discourse. While moderate politicians tend to cooperate with the United States and Europe more, conservatives tend to favor stronger ties with China, complicating long-term planning for Chinese financiers that value predictability. 

More importantly, Beijing evaluates its relationships through a pragmatic, cost-benefit analysis. Hence, Iran’s sanctions exposure and small economic scale limit the depth of cooperation relative to other oil-rich Gulf Cooperation Council (GCC) states. Besides providing a substantial amount of oil, GCC states such as Saudi Arabia and the United Arab Emirates also trade with China significantly more than Iran does. According to World Integrated Trade Solution (WITS) data, while China’s total trade with Saudi Arabia and the UAE each exceeded $100 billion in 2024, its total trade with Iran was only $13.4 billion. Moreover, China exported goods worth over $65 billion to the UAE compared to approximately $9 billion to Iran. Unlike Iran, whose economic ties are constrained by international sanctions, the UAE is deeply integrated into China’s trade and logistics network through large-scale investments such as the Khalifa Port.

China’s broader regional diplomatic network also explains its restraint in the aftermath of the attack. Beijing maintains pragmatic relations with the Gulf states, and, to a lesser extent, Israel, avoiding overt alignment in regional conflicts. Escalation on Iran’s behalf, especially after Iran retaliated against GCC states for simply hosting U.S. bases, would jeopardize these relationships and risk confrontation with the United States. 

Iran’s confrontational stance toward other regional countries creates diplomatic liabilities for China. Close alignment with an increasingly isolated and disruptive government offers limited benefits. With this hierarchy in mind, policymakers in Beijing clearly prefer preserving ties with Washington and the GCC states. 

China’s Foreign Policy Does Not Hinge on Alliances

Some American observers project their own mindsets on China and puzzle over why Beijing refuses to intervene forcefully on Iran’s behalf, concluding that the lack of action signifies that China’s power is diminished. But China’s foreign policy is not structured around collective defense commitments. Unlike the United States, China does not maintain a global alliance network that is capable of defending partners in faraway places. Hence, direct military support in this context was never an option. 

What China is likely to do next is provide limited humanitarian assistance to Iran and mediate among the warring parties. Because of China’s non-interference foreign policy principle, however, Chinese-style mediation often provides the time and space for conversations without pressure for sustained development. China has tried to mediate the conflict in Myanmar, facilitated conversations among factions in Palestine, and, most notably, achieved a detente between Saudi Arabia and Iran in March 2023. Unfortunately, due to the Israeli-U.S. attacks and Iran’s counter-strikes, any attempt at peace between Iran and Saudi Arabia is back to the drawing board. Due to the intense environment, it is unlikely that China’s efforts can easily bring the parties to the negotiating table. 

Ultimately, while the killing of Khamenei, a familiar interlocutor for Beijing, is certainly unwelcome, the long-term impacts are not necessarily adverse to China. As long as the United States remains militarily engaged elsewhere, Beijing retains strategic time and space. 

Korean media recently have reported that Washington is considering moving the THAAD system, a premier ballistic missile defense shield, currently stationed in South Korea, and redeploying it to the Middle East to address the threats coming from Iran. Because the THAAD system has long been a diplomatic pain point between Seoul and Beijing, any shifts of U.S. military posture would mean a strategic victory for China. 

Longer term, a less confrontational and less ideologically extreme leadership in Iran could improve relations with other countries in the region and create an environment for economic development for the BRI. 

Sailor Miao is a researcher affiliated with the Global Research Institute. A recent graduate of William & Mary, he also served as a fellow with the UNDP. He specializes in China's development finance as a policy tool, Chinese industrial policy, and health diplomacy in the Global South. The views expressed in this article are those of the author and do not necessarily reflect the views of his employer.

China in the Middle East

China Middle East policy

China reaction to U.S. strikes on Iran

China-Iran energy trade

China-Iran strategic partnership

Israel-U.S. strikes on Iran

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