China has not yet felt the full shock of the war in the Middle East. However, the conflict is already creating ripple effects for the world’s second-largest economy.
In the short term, China has sufficient oil supplies to last for several months. If necessary, the country could also turn to its neighbour Russia for additional support.
Despite this buffer, Beijing is closely assessing the potential long-term consequences of the conflict. These concerns extend not only to China’s investments in the Middle East but also to its broader strategic ambitions.
This week, thousands of Communist Party delegates are gathering in Beijing to discuss a roadmap for China’s economy. The discussions come as the country continues to struggle with weak consumer spending, a prolonged property crisis, and mounting local government debt.
On Thursday, China lowered its annual economic growth target to its lowest level since 1991. This decision comes even as Beijing continues to accelerate the development of high-tech industries and renewable energy sectors.
China had hoped to rely on exports to help overcome its economic challenges. However, the country has already spent a year engaged in a trade war with the United States. Now, it also faces potential instability in the Middle East — a region that plays a crucial role in both its energy supply and major shipping routes.
Analysts warn that the longer the conflict continues, the more severe the consequences could become, particularly if shipping traffic through the Strait of Hormuz remains blocked.
“A prolonged period of turmoil and insecurity in the Middle East will disrupt other regions of importance for China,” said Philip Shetler-Jones of the Royal United Services Institute.
“African economies, for instance, have benefited from substantial and steady flows of Gulf capital. If that investment slows, it could create wider instability that threatens the sustainability of China’s broader and longer-term interests.”
Given China’s extensive global presence, its investments and markets beyond the Middle East could also be affected by a prolonged conflict. Like many other countries, China is wary of the growing uncertainty.
“I think China is thinking the same as everyone else,” said Professor Kerry Brown, director of the China Lau Institute at King’s College London.
“What is the game plan? Surely the Americans didn’t go into this with no strategy.”
However, he added that many observers may also be wondering whether the situation lacks a clear plan.
“Probably, like everyone else, they may be thinking: ‘Oh God, they really have gone into this with no plan at all.’ We don’t want to get dragged into this, just as we don’t want to get dragged into anything else — but at the same time, we may need to do something.”
