As the United States and its allies grapple with escalating conflicts, including the recent war with Iran following Israel’s strikes on June 13, 2025, China has positioned itself to reap significant economic advantages. Amid global instability, Beijing leverages its strategic neutrality, robust trade networks, and resource diversification to strengthen its economic dominance.
Economic Benefits for China During US-Led Wars
China’s economic strategy thrives on avoiding direct military engagement while capitalizing on the distractions of the US and its allies. The current Iran war, marked by US support for Israel’s airstrikes and Tehran’s retaliatory missile barrages, offers a prime example.
Energy Security and Oil Trade
China, the world’s second-largest oil consumer, benefits from its pragmatic energy policies. Despite official sanctions, China imported an estimated 10% of its oil from Iran in 2024 through unofficial channels, a figure likely to rise as Iran seeks alternative markets amid conflict. With Brent crude prices surging to $77 per barrel on June 22, 2025, due to disrupted Middle Eastern supplies, China’s stockpiling—refining less than it produces—ensures stability. Meanwhile, Russia, another key supplier, sees increased exports to China (up 30% in 2023), bolstering Beijing’s energy independence as US naval assets are diverted to the Persian Gulf.
Trade Diversification and Market Expansion
The US and European focus on Iran has weakened their trade oversight, allowing China to deepen ties with neutral or allied nations. Trade with the UAE and Saudi Arabia reached $99 billion and $87 billion respectively in 2022, outpacing Iran’s $16 billion, giving China leverage to secure favorable deals. The Belt and Road Initiative (BRI), with over $1 trillion invested globally, expands China’s influence, with new contracts likely emerging as Western attention wanes. Posts on social platforms suggest China quietly supports Iran and Russia with trade, enhancing its global clout without combat.
Currency and Financial Gains
Global uncertainty drives demand for safe-haven assets, boosting China’s push to internationalize the renminbi. As the US dollar faces pressure from war-related spending—estimated at billions weekly in the Iran conflict—China’s controlled financial markets (60% of GDP vs. the US’s 140%) shield it from volatility. Gold prices, a hedge against inflation, have risen, benefiting China’s substantial reserves. This stability contrasts with Wall Street’s 1.1% S&P 500 drop on June 21, 2025, highlighting China’s economic resilience.
Technological and Industrial Advantage
With the US reallocating resources—like the USS Ronald Reagan carrier group to the Middle East—China faces less pressure on its South China Sea claims. This allows uninterrupted production of semiconductors and rare earths, critical for its $19 trillion economy. The recent US-China trade war escalation, with 34% tariffs imposed on April 2, 2025, has pushed China to accelerate domestic innovation, with firms like DeepSeek challenging US AI leadership, further solidifying its tech edge.
Factors Propelling China to Economic Superpower Status
China’s rise as an economic superpower is driven by strategic foresight, leveraging both domestic strengths and global chaos. The Iran war amplifies these factors as of mid-2025.
Massive Investment in Infrastructure and Innovation
China’s net fixed capital formation, a key GDP growth driver, remains high, with 2024 investments exceeding $5 trillion. The BRI, including the new Iran overland corridor, mitigates naval risks, while R&D spending—though lagging G7 levels—grows, producing skilled researchers. This contrasts with the US, where military spending diverts funds from infrastructure, a trend exacerbated by the Iran conflict.
Strategic Neutrality and Diplomacy
China’s refusal to condemn Hamas or join US-led sanctions on Iran, as seen in Foreign Minister Wang Yi’s June 14 calls to Tehran and Tel Aviv, preserves trade ties. This neutrality, rooted in a noninterventionist stance since 1979, avoids the diplomatic isolation faced by the US, enhancing Beijing’s prestige in the Global South.
Resource Control and Diversification
With 54% of global aluminum production and significant rare earth reserves, China controls critical supply chains. The Iran war’s potential to disrupt the Strait of Hormuz benefits China’s diversified energy imports, reducing reliance on volatile regions. This contrasts with the US, which spends heavily to secure oil routes, straining its economy.
Population and Market Size
China’s 1.4 billion population, with a growing middle class, sustains domestic demand, cushioning external shocks. As US allies like Europe hesitate to join the Iran war due to economic risks, China captures their markets, with trade volumes rising 5% year-on-year in 2025 despite global tensions.
State-Driven Economic Model
Unlike the US’s market-driven approach, China’s statist economy—evident in state-owned enterprises dominating energy and tech—allows rapid policy shifts. This agility, seen in stockpiling ahead of the Iran conflict, contrasts with the US’s bureaucratic delays, giving China a competitive edge.
Implications of the Iran War on China’s Rise
The ongoing Iran war, now in its ninth day as of June 22, 2025, accelerates China’s economic ascent. US troop deployments (40,000-50,000 in the region) and naval commitments tie down resources, pulling focus from Asia. China’s dispatch of six warships to the Mediterranean, framed as a “friendly visit,” signals readiness to protect trade routes without direct conflict. Economists warn that a Strait of Hormuz blockade could push oil to $100 per barrel, benefiting China’s stockpiles while hurting US allies. Meanwhile, Iran’s economic reliance on China—via the 2021 $400 billion deal—deepens, positioning Beijing as Tehran’s lifeline amid sanctions, further isolating the US diplomatically.
China’s Silent Economic Victory
While the US and its allies combat Iran, China emerges as the silent victor, leveraging energy security, trade expansion, and technological prowess to solidify its economic superpower status. The Iran war, with its regional disruptions and US resource drain, amplifies China’s strategic advantages—neutrality, infrastructure, and market dominance. As global powers recalibrate, China’s calculated restraint ensures it thrives where others struggle, shaping a new economic order by 2030.
