China’s Fading Facade of Support for Iran

Chinese President Xi Jinping joined other non-Western leaders, including Iranian President Masoud Pezeshkian, at the Shanghai Cooperation Organisation (SCO) summit in Bishkek, Kyrgyzstan. While Tehran reported a brief meeting between the two on the sidelines, Beijing remained silent. This silence speaks volumes about China’s limits of support for its beleaguered ally in the face of escalating US pressure.

Beijing’s relationship with Tehran is lopsided, with Iran relying heavily on Chinese trade and investment to keep its economy afloat. Since the US and Israel launched their war in February, China has taken up to 90 percent of Iranian oil exports. However, this economic lifeline comes at a cost: Iranian crude accounts for only about 2 percent of China’s overall energy mix.

Chinese importers have been hesitant to engage with Tehran due to fears of exposure to US sanctions. The Trump administration’s “Operation Economic Outcast” has targeted the refiners facilitating Iranian oil purchases in China, but Washington has yet to directly target China’s financial system – a restraint some analysts attribute to Beijing’s diplomatic efforts to lower the temperature in its trade war with the US.

China’s investment in Iran has been meager at best. Since signing the comprehensive strategic partnership agreement in 2021, only about $185m has materialised – far short of the pledged $400bn over 25 years. Chinese firms have been reluctant to navigate the complexities of doing business in Iran under sanctions. As one analyst noted, “there is no point for Chinese companies to give up their ties with the international financial system to expand their business in Iran.”

In light of this ambivalence, it’s time to reevaluate China’s role as a champion of Iranian interests. Xi Jinping’s rhetoric on opposing external interference and promoting diplomatic resolution to the Iran conflict is welcome, but Beijing’s actions suggest a more pragmatic calculus at play. With its own economic interests and regional relationships in mind, China appears hesitant to risk antagonising the US further by fully committing to Tehran’s cause.

As tensions between Washington and Tehran continue to escalate, it remains unclear how far China will go in defending its Iranian ally. Will Beijing continue to facilitate Iranian oil purchases or take more overt steps to shield Tehran from US pressure? The answer lies in understanding that economic realities often dictate the contours of international relations.

The implications of this limbo are significant. For one, they underscore the complexities of great power politics and the limits of even the closest relationships. When push comes to shove, Beijing’s commitment to its own interests – and those of the SCO – will likely trump any perceived obligations to Iran. This reality should give pause to Tehran, which would do well to temper its expectations about China’s role in this conflict.

As we watch for signs of how China will navigate this treacherous landscape, one thing is clear: Beijing’s approach to supporting its allies is more nuanced than meets the eye. The façade of support for Iran may be crumbling, but beneath it lies a complex web of economic and diplomatic considerations that will continue to shape international relations in the coming months.

China’s response to this crisis has yet to be determined. Will Beijing choose to play the role of spoiler, using its economic clout to shield Iran from US pressure? Or will it opt for a more cautious approach, prioritising its own interests and regional relationships above those of its beleaguered ally? The world waits with bated breath for Xi Jinping’s next move – one that may hold the key to de-escalating this conflict or exacerbating it further.