The Iran-US War a Win for China? Not So Fast.

Following the outbreak of the Iran-U.S. conflict on February 28, a prevailing view emerged in international discourse that China was the primary beneficiary of the crisis. This perception was reinforced after Washington and Tehran formally signed a ceasefire agreement and launched follow-on negotiations, prompting many observers to conclude that the United States had suffered a major strategic setback while China had secured significant diplomatic, economic, and geopolitical gains. 

However, a broader assessment of the evolving realities facing the United States, China, Iran, and the wider Middle East suggests that the situation cannot be simply characterized as a case of American failure and Chinese success. On the contrary, as the regional order enters a new phase of adjustment, China may confront a growing number of challenges, while the United States may discover new strategic opportunities.

The conflict undoubtedly imposed costs on the United States’ international image and diplomatic credibility. Despite committing substantial resources to the confrontation, Washington failed to achieve its primary strategic objectives. As the war continued, key U.S. partners in the Middle East, including Israel and several Gulf Arab states, remained exposed to Iranian military pressure and security threats, increasing the overall strategic burden on the United States.

Following the cessation of hostilities, Washington faced mounting pressure from different partners. On one hand, policy differences between the United States and Israel widened considerably, with Israel urging the U.S. to maintain or even intensify pressure on Iran. On the other hand, some Gulf Arab states became increasingly dissatisfied with the U.S. inability to provide effective security guarantees and began reassessing the U.S.-centered regional security architecture that had emerged after the Cold War. Collectively, these developments weakened Washington’s regional standing and international credibility to some extent.

China, by contrast, achieved notable diplomatic gains during the crisis. Economically, Beijing was largely insulated from the worst effects of oil-price volatility and imported inflation. Thanks to a diversified energy import strategy and relatively ample strategic reserves, China successfully mitigated the impact of turbulence in global energy markets and maintained overall domestic economic stability.

Diplomatically, China actively promoted dialogue and de-escalation after the outbreak of the conflict. Beijing maintained close communication with Gulf Arab states, Iran, and Pakistan, while also remaining engaged with the United States on relevant issues, demonstrating considerable diplomatic flexibility and coordination capacity. At the same time, countries such as Pakistan played a constructive role in facilitating contacts between Washington and Tehran and narrowing differences between the two sides. Through the efforts of multiple parties, the United States and Iran eventually reached a ceasefire agreement and launched a new negotiating process. Although China was not a direct participant in the negotiations, it contributed positively to creating a favorable diplomatic environment and reducing tensions. As a result, China’s regional influence and diplomatic reputation in the Middle East were further enhanced.

Nevertheless, characterizing the conflict simply as a Chinese victory and an American defeat risks overlooking the complex realities of the Middle East and the different opportunities and constraints facing both powers. While the United States incurred political and reputational costs in the short term, it continues to occupy a central position within the regional security architecture and retains substantial room for maneuver in security cooperation, technology partnerships, energy exports, and future participation in Iran’s economic reconstruction. 

China, meanwhile, has gained diplomatic prestige and influence but may face increasingly difficult policy choices as disputes surrounding the Strait of Hormuz, regional security arrangements, and the regional economic environment continue to evolve.

The United States: Strategic Damage Control and New Opportunities

For Washington, the end of the war did not produce the regime change in Iran that some policymakers initially envisioned, nor did it compel Tehran to make comprehensive concessions. However, after several months of conflict, the United States opted to limit further costs and adjust its approach on issues including Iran’s nuclear program, regional security, sanctions policy, and the governance of the Strait of Hormuz.

These adjustments ultimately enabled Washington and Tehran to reach a memorandum of understanding, terminate active hostilities, and initiate a new diplomatic process. Although there have been recurring clashes since then, as both sides accuse each other of failing to honor the deal, talks are continuing through intermediaries. While the U.S. failed to achieve all of its objectives, it has also avoided giving up major concessions to Iran.

From a regional security perspective, the war has not fundamentally weakened Washington’ influence in the Middle East. In some respects, it reinforced security cooperation between Washington and its regional partners. Although some Gulf Arab states have begun questioning the U.S. ability to provide long-term security guarantees and have expressed concern that close military cooperation with Washington may expose them to regional conflicts, countries such as the United Arab Emirates and Bahrain still lack a viable alternative security partner capable of replacing the United States.

Facing continued threats from Iranian missiles and unmanned systems, these states have expanded cooperation with Washington in areas such as air-defense systems, intelligence sharing, and military technology. As a result, the United States has largely preserved – and in some respects strengthened – its dominant security position in the Gulf.

This security relationship is also expanding into technology and infrastructure cooperation. Modern air defense networks, military applications of artificial intelligence, and digital security architectures require supporting infrastructure including data centers, computing capacity, and advanced communications systems. Consequently, Gulf Arab states are likely to deepen cooperation with the United States in artificial intelligence, big data applications, digital infrastructure, and network development while increasingly adopting American technological standards and regulatory frameworks.

This trend provides Washington with opportunities not only to maintain traditional security partnerships but also to generate new strategic and economic benefits through technology cooperation, digital infrastructure projects, and industrial collaboration, thereby reinforcing its long-term regional influence.

Furthermore, neither the Strait of Hormuz issue nor the Iranian nuclear question necessarily poses a direct challenge to Washington’s core strategic interests. The United States does not depend directly on Hormuz transit routes for domestic energy security. Since 2018, the U.S. has become one of the world’s leading energy producers and has significantly reduced its reliance on Middle Eastern energy supplies.

During the conflict, particularly when shipping through the Strait of Hormuz faced disruptions, several energy-importing countries sought more reliable suppliers. Japan, South Korea, and others consequently increased energy imports from the United States. The resulting volatility in energy markets enhanced the strategic value of American energy exports and strengthened U.S. influence within global energy markets.

In short, although the United States failed to fully resolve the Iran challenge through military means, it nonetheless secured a range of strategic benefits by maintaining its dominant security role, expanding technology and infrastructure partnerships, and strengthening its position in global energy markets.

China: Diplomatic Constraints and Economic Challenges

For China, the Iran-U.S. conflict and its subsequent political arrangements have created a new set of diplomatic and strategic challenges. The war not only deepened divisions among Gulf Arab states but also complicated China’s long-term multilateral diplomacy in the Middle East. As regional tensions intensified, the China-Arab States Summit originally planned for June was postponed indefinitely, reflecting the growing complexity of the regional political environment.

Among the emerging challenges, the Strait of Hormuz issue is likely to be one of the most sensitive. Following the conflict, Iranian domestic opinion shifted significantly, reinforcing political support for Tehran’s claims regarding the Strait of Hormuz and adjacent waters in the Persian Gulf. Since the 1950s, many of Iran’s claims concerning maritime rights and territorial issues in the Gulf have been codified through domestic legal instruments. Moreover, because Iran has not formally ratified the United Nations Convention on the Law of the Sea, international arguments regarding unrestricted freedom of navigation do not necessarily enjoy broad legal or political acceptance within Iran.

Under these circumstances, Tehran’s efforts to strengthen its control over the Strait of Hormuz and potentially institutionalize transit fees or passage charges could become a long-term policy trend. Such demands possess substantial domestic political support and are closely tied to Iran’s strategic and security calculations.

For China, this creates a difficult policy dilemma. As the world’s largest energy importer, a major shipbuilding nation, and a leading maritime trading power, China depends heavily on the stability and security of critical sea lanes such as the Strait of Hormuz. How Beijing responds to Iran’s evolving claims regarding Hormuz will become a major test of its Middle East policy.

Supporting Iranian demands could damage China’s relations with Gulf Arab states, particularly the UAE. Conversely, openly opposing Tehran’s position could negatively affect Sino-Iranian relations. Consequently, balancing energy security, freedom of navigation, and relations with both Iran and Gulf Arab states is likely to become an increasingly difficult diplomatic challenge for Beijing.

China may also face adjustments in the region’s economic and technological landscape. Growing cooperation between the United States and Gulf Arab states in military technology, military applications of artificial intelligence, and data infrastructure could gradually reduce opportunities for Chinese firms in advanced technology sectors. Given Washington’s tendency to promote exclusive cooperation arrangements in areas such as AI, big data, and digital infrastructure, the scope of China-Gulf technological cooperation may become increasingly constrained.

At the same time, if Iran and the United States reach a settlement that involves easing sanctions on Iran, substantial Western investment and commercial projects could enter the Iranian market. China’s long-standing economic advantages in Iran may therefore weaken. In sectors such as energy development, infrastructure construction, and financial services, Chinese companies could face significantly greater competition from American and European firms.

From a military perspective, although Gulf Arab states have sought to diversify aspects of their external security partnerships, no third-party power is currently capable of replacing the United States as the dominant military actor in the Middle East. The military equipment, command structures, logistics systems, and operational networks of Gulf Arab states remain deeply integrated with the United States. Any rapid transition toward alternative suppliers would create substantial disruptions and inefficiencies.

Neither Russia, China, nor Pakistan currently possesses the capacity to fill the strategic vacuum that would emerge if U.S. security commitments were substantially reduced. Consequently, while some Gulf Arab states may reassess their relationship with Washington, such reassessments are more likely to produce strategic adjustments than a fundamental rupture.

For China, limited overseas basing infrastructure and relatively untested long-range military projection capabilities constrain its ability to serve as a credible alternative security provider. As a result, despite China’s growing economic influence and diplomatic profile in the Middle East, it remains unlikely to replace the United States as the region’s primary external security partner in the foreseeable future.

Much like many other longstanding issues in the Middle East, questions involving Iran-U.S. relations, Gulf security, the Strait of Hormuz, and Iran’s nuclear program often possess strong zero-sum characteristics. Core interests among the parties diverge significantly, leaving limited room for compromise. External actors that take positions on these issues inevitably risk alienating one side or even multiple parties simultaneously.

China’s favorable image in the region has been partly attributable to its relatively limited involvement in the Middle East’s complex political and military affairs. However, as the post-conflict regional order evolves, Beijing will increasingly face pressure to articulate clearer positions on sensitive issues. This will require more careful balancing among Iran, Gulf Arab states, and other regional actors while simultaneously confronting intensified competition from the United States and Europe in regional markets.

Although the United States suffered reputational costs in the Iran-U.S. war, it successfully limited further losses, reinforced security and technological cooperation with key regional partners, and preserved opportunities for future economic engagement. China, while benefiting from enhanced diplomatic prestige and regional influence, may ultimately face a more complicated strategic environment characterized by greater political, security, and economic uncertainty.