What China thinks about the escalating Iran-Israel conflict

China’s Optimism in the Face of Middle East Tensions

Amidst the recent escalation of tensions in the Middle East, Chinese businesses remain optimistic about the opportunities present in the region. According to Bear Huo, the China general manager at FundPark, a fintech startup, Chinese shipments to Dubai’s logistics hub have increased by 20% this month compared to last year. This surge in shipments is attributed to local residents stocking up on batteries and daily necessities.

Huo noted that Chinese merchants are relatively optimistic about the region, citing the Middle East’s emergence as a fast-growing market in recent years. Chinese companies have been increasingly looking towards the Middle East as a viable market, especially amidst trade tensions with the United States. Additionally, Beijing played a role in helping restore diplomatic relations between Riyadh and Tehran in 2023.

Despite the ongoing tensions between Iran and Israel, Huo expressed confidence that the situation would likely be resolved soon. He pointed out that the recent U.S. strikes targeted specific strategic sites, and the conflict is not as widespread as other prolonged conflicts. However, risks remain high as the Dubai port is situated across the Strait of Hormuz from Iran.

Due to the current situation, there have been disruptions in shipping routes and reduced flight frequencies. While Chinese products are being shipped to Dubai, Huo clarified that his company does not engage in direct business with Iran due to sanctions.

China’s Ministry of Foreign Affairs has condemned the recent U.S. attacks on Iran and called for a ceasefire. Trade between China and Iran has declined over the past two years, with China being a significant buyer of Iranian crude oil. A stable Middle East is in China’s economic and strategic interests, according to Yue Su, a Beijing-based economist.

Chinese businesses are likely to approach Iran cautiously due to concerns about potential secondary sanctions. Despite the challenges, Chinese citizens have been able to visit Iran without a visa for tourism or business purposes.

Looking ahead, if the current tensions lead to a relaxation of U.S. sanctions on Iran, Qin Gang, the founder of a Beijing-based consultancy, believes that tens of thousands of Chinese businesses will flock to Iran to invest in tourism, real estate, and infrastructure. Gang, who visited Iran in 2013, sees great potential for Chinese businesses in the Middle Eastern country.

In conclusion, despite the uncertainties in the region, Chinese businesses remain hopeful about the opportunities in the Middle East and are closely monitoring the situation for potential investments and partnerships.