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Gulf states test China's economic leverage to rein in Iran
As the Iran war escalates, Gulf Arab states are testing the limits of China's influence over Tehran. They want Beijing to use its economic leverage, not the US, to secure the Strait of Hormuz and the Red Sea.
With the re-escalation of the Iran war, Gulf Arab states are relying on Beijing's economic influence to secure the critical sea lanes in the Strait of Hormuz and the Red Sea. Regional sources speaking to Reuters say that at a time when Washington's influence is showing its limits, China's willingness and ability to pressure Iran are being tested.
According to three separate regional sources, after Iran and its allies threatened the Bab el-Mandeb strait in the Red Sea and the Strait of Hormuz, Gulf countries sought help from Beijing. Chinese Foreign Minister Wang Yi held dozens of phone calls and meetings in search of a new ceasefire, while special envoy Zhai Jun held talks in Gulf capitals and Tehran.
In a statement on the matter, the Chinese Foreign Ministry said, "China has maintained close communication with all parties and has consistently worked to stop the fighting and promote peace."
China's limits amid great power competition
China holds significant economic leverage as a major oil buyer from both the Gulf and Iran, and as Tehran's largest trading partner. However, Beijing avoids openly questioning Tehran's threats to maritime shipping. This raises doubts about how far China is prepared to go to secure the Gulf and its own exports.
One Gulf source said, "There is great respect between the Gulf and China, and they are a major trading partner, so every issue is raised very quietly." A second Gulf source added, "The Chinese are trying to get more involved, trying to be more helpful," and said, "But it has turned out that China is not as effective as we thought. It seems that when America steps in, superpower calculations override everything."
Henry Tugendhat, a China expert at the Washington Institute, said Beijing's top priority is to preserve its relationships across the region rather than take diplomatic risks by openly taking sides. He noted that after Washington became directly involved, Beijing's calculations extended beyond the Gulf to encompass its broader ties and rivalry with the US.
Balancing interests and talks with the Houthis
China brokered a surprising diplomatic rapprochement between Saudi Arabia and Iran in 2023. That process is now being tested. Beijing is also pushing Pakistan to mediate the resumption of peace talks between Washington and Tehran.
Meanwhile, China held direct talks with the Houthis in Yemen to ensure its own tankers could pass through the southern Red Sea without being attacked, amid threats from the Iran-aligned Houthis to block access to Saudi ports. Six sources close to the matter confirmed this to Reuters this week; China's Ministry of Transport did not respond to a request for comment.
Anna Borshchevskaya of the Washington Institute said that narrow bilateral arrangements protecting China-linked shipping are the only visible outcome of diplomatic efforts so far, adding, "Beyond that, it is hard to see what else China has been able – or willing – to achieve."
Unlike the US, China has no defense commitment in the Gulf, no military mandate to protect regional waterways, and no appetite to take on such a role. Beijing says it is not prepared to use military force to reopen the Strait of Hormuz and does not believe other parties can do so either. Instead, it calls for diplomacy and dialogue for the security of international sea lanes.
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