On Monday, Chinese President Xi Jinping weighed in on the crisis in the Strait of Hormuz, stating that normal passage through the waterway should be maintained -just as Iran’s reported seizure of ships brings new uncertainty.
This marks the first time that Beijing has commented on the issue since the US and Israel began their war with Iran and Lebanon in late February. In addition to calling for the Strait of Hormuz to be opened, Xi also stressed the importance of an immediate and comprehensive ceasefire to end the hostilities in Gulf.
Xi is clearly aiming to exercise greater influence and return to the status quo. For Beijing, any disruption to global trade or a global economic downturn would hurt its export-oriented economy. Net exports contributed to one-third of China’s GDP in 2025, with uncertainty around the Strait of Hormuz posing a huge challenge for China. But what kind of leverage does China have to compel a return to normal and why has the Middle East become so important to it?
China’s growing interdependence with the Middle East
Without a doubt, China’s interest in the Middle East has grown markedly in recent years. Following the China-US trade war that Trump initiated, Beijing moved quickly to diversify and accelerate its trade relationships, with the Middle East emerging as a key trade partner. Forging these relationships had already been in the works for several years, as China aimed to improve its ties with the Gulf states and beyond. Trade between China and MENA countries rose to $480.7 billion in value in 2024, with crude oil constituting China’s main import from the region.
Even before taking steps to reduce its economic interdependence with the US, China aimed to protect stable energy production in the Middle East and the safe transport of energy from the region to China. While 18% of China’s imported oil comes from Russia, 53% comes from the Middle East. China is the largest consumer of Middle East oil, and about 45% of China’s oil goes through the Strait of Hormuz.
China’s mediation role
Given China’s growing importance to the region, it was not surprising that Pakistan reached out to China to help broker the first ceasefire between the US and Iran. However, China had not been that active in peace building or direct mediation in the past, preferring to be a neutral broker and avoid costly commitments. Nevertheless, its role as a mediator and peacekeeper has grown over the years (By 2020, China contributed 2,249 peacekeepers to 25 operations, compared to only 20 in 1989), as China has worked to enhance its global image.
China’s mediation model contrasts sharply with the West. China’s diplomatic and mediation efforts are based on neutrality, pragmatism and non-interference, rarely using economic sanctions and choosing to rely on other sources of economic leverage. In practice, Beijing’s approach lacks transparency and is shaped by its own economic and strategic interests at the expense of other actors. But for some countries, this model may still be more attractive than the US model of coercive diplomacy and the selective promotion of democratic norms and the UN model which emphasizes multilateralism and international law but can be slowed down by bureaucratic delays.
For China, involvement in mediation is also part of its larger strategy to build an image of a stable, pragmatic power in comparison to the US. As China sees the US as its biggest competition in the Middle East, its mediation efforts are driven by a desire to increase its diplomatic influence and leverage and marginalize the US and US-led regional security mechanisms. Not surprisingly, China always declines to take part in any sort of security coalition formed by the US or the UK.
China elevated its status as a mediator in the region, using its economic ties with Saudi Arabia and Iran to support normalization in 2023 after seven years of proxy conflict. As both countries depended on China’s energy demands and investment, Beijing underscored the importance of regional stability to long-term economic cooperation. For China, dialogue between Riyadh and Tehran was critical for its global energy security and transportation projects.
China’s leverage over Iran
In the context of the war in Iran, China wants to maintain relations with both Iran and Saudi Arabia. While China’s relationship with Saudi Arabia has generally been less fraught with friction, more predictable and based on economic interdependence, China’s relationship with Iran has been far from smooth sailing.
This is in part because the relationship has been driven by Beijing’s desire to boost Iran mostly to serve as a counterpoint to US influence in the region. For that reason, it pursued economic ties with Iran, having helped Iran circumvent Western sanctions. The two countries also signed a 25-year strategic partnership to strengthen ties economically and technologically in 2021.
Though China has no formal defence agreements with Iran, more recently Beijing has offered Iran commercial reconnaissance satellites, to indicate the precise location of US military facilities. China may also be preparing a weapons shipment to Iran.
But Tehran does not have a deep diplomatic relationship with Beijing. Though China is Iran’s largest trading partner with 80-90% of its crude oil going to China, the two countries have little in common culturally or ideologically.
And it’s not clear how much weight China has with Iran. It may be able to push Iran to offer limited concessions, but not major ones. China engaged Iran in discussions to deter strikes by the Houthis on the Red Sea in January of 2024, but in the current conflict, it remains to be seen what influence China has. Case in point: Iran blocked Chinese ships from passing through the Strait of Hormuz, offering Beijing no special favors.
At best China may be able to secure a partial reopening of shipping lanes for vessels from states viewed by Tehran as neutral or friendly. But even with considerable economic leverage over Iran, Beijing is unlikely to compel a full reopening of the Strait, which Iran now treats as its most strategic bargaining tool. Additionally, any pressure from Beijing is tempered by Tehran’s confidence that China, will not get too involved or allow it to fail.
