BEIJING – China’s ties with countries like Iran and Russia have raised expectations of a larger diplomatic role, but Beijing remains focused on protecting its own domestic interests, including global exports.
That stance underpins Beijing’s cautious acknowledgment of reports that it pressured Iran into this week’s temporary ceasefire. A New York Times report quoted three Iranian officials saying China played a role, while AFP quoted US President Donald Trump.
China has made “active efforts” to end the conflict, Foreign Ministry spokesman Mao Ning said on Wednesday when asked by the press about the reports. She emphasized that Foreign Minister Wang Yi has held 26 telephone conversations with representatives of countries such as Russia, Saudi Arabia, Germany and Iran since the US-Israeli attacks on Iran began on February 28.
But Beijing refrained from confirming direct mediation.
China called for an “immediate halt” to military operations following US-Israeli strikes against Iran in late February. When asked about Iran’s counterattacks on March 3, the Chinese Foreign Ministry did not specifically mention Tehran and instead called on “all parties” to prevent the conflict from spreading.
“What Beijing has done is not really about direct mediation,” said Zongyuan Zoe Liu, senior fellow for China studies at the Council on Foreign Relations.
“What Beijing has done is, more accurately, a mediator[ed]facilitated the ceasefire,” she said on CNBC’s “The China Connection” on Friday. “From this perspective, there is nothing [that has] has changed in terms of Beijing’s foreign policy. This does not mean that Beijing is becoming more active.”
Instead, she noted that Beijing was worried about the risk of a global downturn from the war that would hurt its export-oriented economy.
Despite increased U.S. tariffs, net exports contributed about a third of China’s GDP last year, leaving the country’s economy exposed to disruptions in global trade.
IMF Managing Director Kristalina Georgieva warned on Thursday that global growth will slow even if the ceasefire continues, citing ongoing uncertainty around the Strait of Hormuz.
The strait handles about a fifth of the world’s oil supply and connects the Persian Gulf, off the coast of Saudi Arabia, to the rest of the world. While China is the main buyer of Iranian oil and relies on the waterway for almost half of its seaborne oil imports, this represents only 6.6% of China’s total energy consumption.
Still, China is “under enormous pressure due to rapidly rising energy costs and hopes that the Strait of Hormuz will be reopened soon,” said Hai Zhao, director of international policy studies at the Chinese Academy of Social Sciences, a state-affiliated think tank.
As of January, Beijing was estimated to have enough crude oil supplies to meet demand for three to four months. Data shows Iran has been sending oil across the strait to China since the war began.
However, gasoline prices in China rose 11% in March compared to the previous month, and authorities raised official domestic gasoline prices twice in six weeks, by a total of 1,580 yuan per ton, or about 60 cents per U.S. gallon. The average price in the U.S. has risen by more than $1 per gallon during that time.
Higher energy costs are also reducing factory margins and increasing price pressure across China’s manufacturing sector.
Globally traded Brent crude futures remained below $100 a barrel on Friday despite limited signs of a recovery in shipping through the Strait of Hormuz. Iran’s recent attacks on a key Saudi pipeline have also cut the kingdom’s oil production, Saudi Arabia’s state news agency said on Thursday.
The backdrop
China’s diplomatic positioning builds on its role in restoring diplomatic ties between Iran and Saudi Arabia three years ago, ending three decades of hostility. This move was notable given U.S. interests in the Middle East while also raising China’s profile in the region.
This history means Beijing can play the role of mediator once both sides are willing to reduce the conflict, Zhao said.
However, he noted that China has neither the ability nor the willingness to pressure both sides to negotiate. Instead, China’s support gives more weight to Pakistan’s mediation efforts, he said.
Pakistan, which borders China and Iran, will host Iranian and U.S. leaders for ceasefire talks in Islamabad this weekend. The extent of Beijing’s involvement in the summit remains unclear.
Weekly analysis and insights from Asia’s largest economy in your inbox
Subscribe now
“We support the mediation efforts of countries like Pakistan,” Chinese Foreign Ministry spokesman Mao said this week. She noted that Beijing has called on all parties to end hostilities as soon as possible to ensure peace in the region. “China has made active efforts in this regard.”
In late March, China and Pakistan released a plan to “restore peace and stability” in the Middle East, which included a ceasefire, peace talks and the restoration of normal shipping through the Strait of Hormuz.
Pakistan abstained from voting this week on a U.N. Security Council resolution that would have encouraged countries to coordinate their defense efforts to reopen the strait. Veto members China and Russia in the Security Council objected and planned to adopt an alternative resolution.
Iran has made it clear that ships must seek its approval to transit through the strait, Sultan Ahmed Al Jaber, CEO of Abu Dhabi National Oil Co., said in a social media post on Thursday. “The Strait of Hormuz is not open. Access will be restricted, conditioned and controlled.”
Before the war, Iran had occasionally harassed, attacked or seized ships transiting the strait as tensions with the United States escalated.
“China welcomes any chance to present itself as a constructive, responsible power while the Trump administration is seen as a source of instability,” CFR’s Liu said.
However, she warned that broader geopolitical dynamics remain unchanged.
“The underlying structural tension between Beijing’s dependence on a rules-based global order and Washington’s growing willingness to disrupt that order remains entirely unresolved,” she said.
“This is the story worth pursuing beyond the immediate ceasefire.”
—CNBC’s Asriel Chua contributed to this report.
Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.