Opinion: Opinion | One Crisis, 4 Wins: How China Might Just Have Hit A Geopolitical Jackpot

There is now a near-unanimous consensus that the Iran war has benefited China immensely. Against the sniggering commentaries of the initial days of the war, when it was believed that China would be hit hard, the more recent reports on how it has impacted China are far more sobering, if not outright envious. But China can hardly be blamed for accruing benefits from the shortsighted, ill-thought-out war.There are four broad areas in which China is reportedly benefiting.A Distracted AmericaThe first is military. The ongoing Iran war is being perceived as a gamechanger in the Indo-Pacific security architecture as the US continues to pivot to the Middle East, pulling out missile systems, long-range missiles, and interceptors from places like South Korea and Pacific Islands and transferring them to the Middle East to replenish depleting stockpiles there. This leaves China with greater military clout in the region and also helps it mount a narrative - especially around Taiwan - about the unreliability of the US as an ally. The war also helps China study American war manoeuvres, strike patterns, weapons systems, operational capabilities, etc., which are useful for any potential future conflict over Taiwan or in the Indo-Pacific.It's The Oil, SillySecondly, the closure of the Strait of Hormuz early into the war and the destruction of energy facilities have caused disruptions in energy supply chains on a scale hitherto unwitnessed. About 25% of crude oil and a fifth of LNG have disappeared from global energy markets. This has benefited China in two ways.One, the energy shortfall has accelerated the push for renewables. Countries such as Pakistan and Vietnam have increased the deployment of renewable energy and the use of electric vehicles. China is the largest manufacturer of electric vehicles, solar panels, and wind turbines, and is leading global clean energy chains, with exports soaring to $21.9 billion just by March 2026.On the other hand, China has judiciously engaged in building massive strategic energy reserves. Over the years, it has sourced sanctioned Iranian oil at massively discounted prices, especially after the 2021 agreement with Iran for an estimated $400 billion, which has been a lifeline for Iran, more so after the war began and a blockade was imposed on the country's ports. According to data from the US Energy Information Administration (EIA), China holds an estimated 1.2 to 1.4 billion barrels of total crude oil in combined commercial and strategic stockpiles. With decreasing demand and sustained pipeline LNG supplies, Chinese firms have been reselling LNG to countries facing severe shortfalls because of the war, like Vietnam, South Korea and the Philippines.Both these things increase China's strategic leverage regionally and globally.The Age Of The YuanA third reason, and one tied to the above, is the process of de-dollarisation and the promotion of the Chinese yuan. This process has been underway for a while now and is projected to only accelerate. Just like the sanctions on Russia accelerated the use of the yuan in Sino-Russian trade, so did the sanctions on Iran facilitate the use of the Chinese currency in settling cross-border trade.Sanctions aside, other countries, too, have tried to hedge their exposure. For instance, in 2023, China and Saudi Arabia signed a local currency swap agreement worth $7 billion as part of efforts to boost trade using their currencies and reduce reliance on the dollar. In 2024, Saudi Arabia signed on to the mBridge project, launched in 2021 between the central banks of China, Hong Kong, Thailand, and the UAE, to develop a new system for cross-border payments using central bank digital currencies. India, too, paid in yuan for Russian oil shipments earlier and for Iranian crude this year under a US sanctions waiver. Given how tied the Iranian economy is to China's, and in order to deliberately undermine the US dollar, Iran also announced that it would collect shipping "tolls" for passage through the Strait of Hormuz in yuan. China's Cross-Border Interbank Payment System (CIPS) has reportedly seen daily transactions increase by over 50%, from $85 billion to $130 billion during the war.Pulling Its Diplomatic WeightFourthly, the Iran war has seen China's diplomatic clout increase. In any case, much of the Global South, at least Africa and the Middle East, sees China as a natural leader and the only alternative to the US. The Iran war has helped project and promote that image. The war began on February 28, 2026. Soon after, China's Special Envoy to the Middle East, Zhai Jun, began engaging in shuttle diplomacy in the region to facilitate mediation and advance de-escalation efforts. This was just what Li Hui, the Chinese government's special representative for Eurasian affairs, had done during the Russia-Ukraine war. While nothing changed on the ground in the latter case, it did project and promote China's image as a peace-loving and peace-seeking country. China has also opposed a UNSC resolution to open the Strait of Hormuz. Earlier, too, China had facilitated a "truce", though short-lived, between Iran and Saudi Arabia.There are other ways as well in which China has been benefiting from the Iran war. The bombing of the Chabahar port tower or the strikes in Iran's northern region bordering the Caspian Sea - and on cargo vessels in there - have caused a setback to the International North-South Transport Corridor, which was, at least in part, meant to counter China's Belt and Road Initiative (BRI) and its expanding influence in Central Asia, Russia's traditional sphere of influence. Attacks on Chabahar and renewed sanctions on the port also complicate India's connectivity ambitions. But all this allows China to continue with its trade routes untouched. In fact, the China-Pakistan Economic Corridor (CPEC), the BRI'S flagship project in Pakistan, has actively benefited as countries like Kyrgyzstan and Uzbekistan reroute their trade routes away from Iran to the CPEC to reach the Arabian Sea.China also controls the global supply chain of rare earth elements, critical to the production of hi-tech and next-generation weapon systems. The US is estimated to have imported almost 70% of its rare earth metals from China between 2021 and 2024. China imposed export restrictions on these elements, given its trade war with the US. But with the rapid depletion of America's stockpiles in the war, the demand for these metals has increased, which plays directly into China's hands, offering it greater leverage over the US in trade negotiations.Who Can Blame Luck?Yet, can China be blamed for making use of opportunities that have presented themselves to it? In fact, sanctions on Iran, even preceding the Joint Comprehensive Plan of Action (JCPOA), offered China strategic avenues. It began importing large quantities of heavily discounted Iranian oil, even assigning one particular bank, the Bank of Kunlun, to process payments without the threat of Western sanctions. Where countries like India retreated, China opened up the large Iranian market to its products and engaged in building strategic infrastructure in the country. Iran became a major node in China's BRI and a useful tool to keep the US engaged in the region, distracted from the Indo-Pacific and Taiwan. Yet, given its energy dependence on the Gulf states, China adroitly balanced relations with the GCC, too, as well as with Israel, where it has also engaged in strategic infrastructure development. It opposes the acquisition of nuclear weapons by Iran but is alleged to have supplied dual-use technology to it.When the first Trump administration withdrew from the JCPOA in 2018, reimposing sanctions on Iran, China was the one to benefit from the pre-deal opportunities. Now, the Iran war is only compounding those opportunities. In fact, every US move against Iran has translated into an enabling factor for China. Meanwhile, those like Taiwan and South Korea will be warily wondering - as they had in Trump's last administration - how much they can depend on the US as a defense shield.So, why grudge China the advantages it has been handed almost on a platter?(The author is a senior journalist)Disclaimer: These are the personal opinions of the author