Two months ago, China’s foreign minister, Wang Yi, promised it would be a “big year” for China-US relations. He was right, but perhaps not in the way he expected.
Wang was speaking before a planned visit by the US president to Beijing in March, which would have been Donald Trump’s first trip to China since 2017. But the trip, and a meeting with his Chinese counterpart, Xi Jinping, was kicked back by several weeks after Trump decided to launch strikes with Israel against Iran, starting a war in the Middle East that has caused a global energy crisis and roiled diplomatic relations across the board.
The storm unleashed by the conflict has disrupted the delicate relationship between the world’s two superpowers.
Wang said in March that the two sides should “treat each other with sincerity and good faith”. Now, China is accusing the US of “dangerous and irresponsible” behaviour regarding its blockade in the strait of Hormuz, and has vowed to retaliate against the threat of US tariffs. Meanwhile, the US treasury secretary, Scott Bessent, accused China on Tuesday of being an “unreliable global partner” for stockpiling oil.
China declined to elaborate on Wednesday on whether any of this would affect Trump’s visit, rescheduled for May. But a trip that was supposed to be about reaching a win-win trade deal now looks likely to be overshadowed by the war, with US intelligence briefing that China may have helped Iran militarily in the conflict. Beijing has denied such claims.
When the conflict started on 28 February, analysts forecast some short-term gains for China. Rising oil prices hurt the US more than China, the war damaged Trump’s credibility on the world stage, the conflict used up crucial US military resources and distracted political attention in Washington away from Beijing and security threats in the Asia Pacific. China’s fossil fuel stockpiles and diversified energy mix insulated it from the worst of the oil shock.
But those days now seem like a distant memory. There are two main risks to China from the current crisis. First, despite its energy stockpiles, there is the risk that it will start to feel the pain of shortages. Pump prices for drivers have already increased. That may not make much difference to day-to-day life in China, but it threatens Beijing’s longer-term planning.
Shen Dingli, a Shanghai-based scholar of international relations, said the conflict “deeply undermines China’s energy security” and this needed to be taken into account regarding its potential plans to invade Taiwan at some point in the future. “China needs to think: what are the consequences of a Taiwan contingency due to an energy cutoff?” Shen said.
Although oil accounts for less than one-fifth of China’s total energy mix, that share is much higher in sectors such as transportation and aviation, which are important to the military. China buys more than 80% of Iran’s oil, which, before the US counter-blockade of the strait of Hormuz started this week, had been reaching China in flows that were largely uninterrupted. Those Iranian imports make up about 12% of China’s oil supply.
Second, there is the risk that the war in the Middle East causes a global recession. Since China’s economy is heavily dependent on exports, which account for around one-fifth of GDP, this would be a blow to the country’s economic growth.
Andrea Ghiselli, a lecturer in international politics at the University of Exeter, said: “In the beginning, China had something to gain. But now I think they really want this to end. The Chinese don’t want any of this.”
Beijing may still be reaping some diplomatic benefit in being seen as a more stable global partner than the US. In the past 48 hours, Xi has met Spain’s prime minister, Vietnam’s president, Russia’s foreign minister and the crown prince of Abu Dhabi.
Read More: China Urges Banks to Use Blockchain for Lending, Tax Data Sharing
