Executive Summary
This report analyses the strategic implications of the Israel–Iran conflict on China’s regional interests, focusing on the disruption of Beijing’s energy, logistical, and geopolitical investments.
It further examines the consequences of Israel’s declared intent to target Pakistan should Iran be defeated, highlighting the potential threat to China’s Belt and Road Initiative (BRI).
Additionally, the report assesses how the conflict—and the recent US strikes on Iranian territory—may align with Washington’s broader objective of containing Beijing’s influence across the Indo-Pacific and Eurasian corridors.
Key Takeaways
- The ongoing Israel–Iran conflict significantly threatens China’s strategic interests by endangering its energy imports, overland logistics corridor.
- Israeli intentions to target Pakistan following a potential defeat of Iran would critically destabilise the China–Pakistan Economic Corridor and disrupt China’s access to Central Asian markets.
- The conflict aligns with broader US objectives to contain Beijgin’s regional influence by undermining its key partnerships and logistical autonomy.
Information Background: the Israeli-Iranian Conflict
On 13 June 2025, Israel started a surprise air offensive targeting a series of Iranian military and nuclear installations, asserting that Tehran was on the cusp of achieving nuclear weapons capability. Iran retaliated with hundreds of rockets and drones against Israel after an operation targeting its nuclear infrastructure. The initial attacks escalated into a prolonged conflict in the following days.
On June 21,2025, President Trump announced that the US military had launched coordinated airstrikes on three major Iranian nuclear sites (Fordo, Natanz, and Isfahan). In response, Tehran launched a missile barrage targeting the US Al Udeid Air Base in Qatar. The strike caused no casualties; President Trump characterised it as a “weak response” and subsequently appealed for de-escalation as the confrontation entered its twelfth day.
On June 23, 2025, President Trump declared a ceasefire agreed between Israel and Iran is in effect, and urged both sides not to violate it. Twelve hours later, Israeli forces ceased hostilities, marking a phased beginning to a complete end to fighting, according to multiple news sources.
However, reports from Tehran and Jerusalem question the agreement’s strength; missile fire from Iran after the ceasefire deadline caused civilian casualties in Beersheba, triggering Israeli air raid alerts.
China-Iran Relations: Strategic Context
On June 24, 2020, China and Iran formalised a long-term strategic partnership through a 25-year agreement signed in Beijing. Under the terms of this accord, China committed to investing approximately US$400 billion in Iran’s economy over the duration of the agreement. In return, Tehran agreed to supply China with a stable and heavily discounted flow of oil—an arrangement that has gained further strategic relevance in light of the sanctions imposed on Iran’s hydrocarbon sector. As a result of this framework, China has emerged as the principal buyer of Iranian oil, effectively bypassing international restrictions.
Beyond the bilateral level, Iran and China maintain cooperation within broader multilateral platforms, notably as members of the Shanghai Cooperation Organisation (SCO) and BRICS.
In 2022, Tehran authorised the establishment of a Chinese Consulate General in Bandar Abbas, a key port city in the Southern province of Hormozgan. This region has become a focal point for Sino-Iranian cooperation, particularly in the maritime and shipbuilding sectors.
The growing presence of Chinese nationals in southern Iran—especially on Qeshm Island, where many reside and engage in business—further illustrates the expanding footprint of Chinese interests in the Persian Gulf. Conversely, Iran maintains consular offices in Shanghai, Guangzhou, and Hong Kong, facilitating bilateral engagement across economic and diplomatic channels.
The two countries have also completed several infrastructure projects aimed at enhancing connectivity. Among the most notable are the “Persian Bridge,” which links Qeshm Island to the Iranian mainland, and a freight railway line connecting Xi’an in China to Iran’s Aprin dry port, situated near Tehran. These projects are emblematic of China’s efforts to solidify overland corridors linking East Asia to the Middle East under the Belt and Road Initiative.
According to reporting from the Wall Street Journal, recent intelligence suggests that Tehran has ordered thousands of tons of missile components from China, reportedly as part of efforts to replenish its strategic arsenal and support allied militias aligned with the so-called “Axis of Resistance.”
Central to this claim is a reported contract for the acquisition of ammonium perchlorate—a key propellant for solid-fuel missiles—sufficient to produce up to 800 ballistic missile systems. The deal allegedly involves the Iranian firm Pishgaman Tejarat Rafi Novin Co. and Lion Commodities Holdings Ltd., a company registered in Hong Kong. While these transactions remain under scrutiny, they reflect a deeper dimension of Iran–China cooperation that extends into sensitive military-industrial domains.
Geopolitical Assessment
Tehran stands as China’s principal trading partner in the Middle East, supplying nearly half of Beijing’s imported oil. To preserve uninterrupted access to these hydrocarbons, China has consistently circumvented Western sanctions imposed on Tehran.
Chinese yuan (CNY) is reportedly the primary currency used in many of these transactions. There are also unconfirmed reports that barter mechanisms and gold-based exchanges have been used in some instances. This has undermined the dominance of the US dollar in bilateral trade transactions.
However, this strategic energy relationship is vulnerable to regional volatility. Any attempt by Iran to close the Strait of Hormuz—often invoked as a retaliatory measure—would not only disrupt its own export routes but also jeopardise China’s imports from other key energy suppliers. Saudi Arabia, China’s second-largest source of oil, as well as Qatar and the United Arab Emirates, which provide natural gas, all rely on safe passage through the Strait of Hormuz for maritime deliveries to East Asia.
In the event of heightened regional tensions, the Red Sea could emerge as another flashpoint. Should the Houthis intervene militarily in alignment with Iran, maritime security in the Bab el-Mandeb strait and surrounding corridors may deteriorate further. This scenario would severely impact international shipping lanes. Notably, during the Gaza conflict, Chinese vessels transiting the Red Sea reportedly enjoyed preferential treatment from the Houthis, in contrast to repeated attacks on commercial ships flagged or operated by the United States and the United Kingdom.
Given the strategic vulnerability of maritime routes, Beijing and Tehran have moved to establish an overland freight corridor intended to maintain trade continuity, reducing dependency on the Strait of Malacca, a chokepoint largely under US strategic influence in times of crisis. This infrastructure assumed heightened strategic importance following the Trump administration’s reintroduction of the ‘maximum pressure’ campaign, which aimed, among other objectives, to reduce Iran’s oil exports from 1.5 million barrels per day to zero by targeting key purchasers, notably China.
However, the utility of this corridor is contingent upon regional stability. Should Iran become embroiled in a direct military confrontation, particularly involving Israel or the United States, resulting strikes on its oil and gas infrastructure would likely render the corridor ineffective.
Further escalation threatens to destabilise the broader Gulf region, where China holds extensive economic interests and relies heavily on energy imports.
Recent statements from Israeli leadership suggest that military operations may not end with Iran. Indications have emerged that Pakistan could also become a target in the aftermath of a decisive Israeli campaign against Tehran. This prospect holds significant implications for China, given that Pakistan hosts the China–Pakistan Economic Corridor (CPEC), a cornerstone of the Belt and Road Initiative, anchored by the strategic Gwadar Port.
Destabilisation in Pakistan would severely undermine Chinese strategic investments and disrupt critical logistical links. Moreover, such instability would reverberate across Central Asia. Countries like Kazakhstan, Uzbekistan, and Turkmenistan depend on transport and trade corridors through both Iran and Pakistan to access global markets. If both states are compromised, China would face regional isolation west of its borders and the collapse of its western logistical axis.
Islamabad, aware of the existential risk posed by a nuclear strike on Iran, has warned Israel of potential retaliation. Simultaneously, Pakistan has made overtures toward former US President Donald Trump, including proposing him for the Nobel Peace Prize—an apparent attempt to secure political leverage or a potential ally in the event of a direct confrontation with Israel.
From a strategic perspective, Israeli military action targeting Iran—and potentially Pakistan—aligns with long-standing US objectives to constrain China’s geopolitical expansion by removing key regional partners critical to Beijing’s westward projection. With terrestrial corridors threatened and maritime alternatives such as the Strait of Malacca and largely under US influence, China’s strategic autonomy in both logistics and energy supply would be gravely compromised.
Such a development would advance the proposed India–Middle East–Europe Corridor (IMEC), positioning Israel as a key strategic hub along the route.
Ultimately, China risks losing the diplomatic credibility it earned by successfully mediating the normalisation of relations between Saudi Arabia and Iran.
Conclusion
The Israel–Iran conflict is serving not only national Israeli interests but also advancing US geopolitical aims by damaging Chinese-backed regional architectures.
The potential extension of Israeli hostility to Pakistan marks a significant escalation that could shatter Beijing’s continental strategy, weakening its connectivity through Central Asia.
Destabilising both Iran and Pakistan—two of the most invested corridors in the BRI—would leave China structurally vulnerable west of Xinjiang and expose its energy supply lines to adversarial control.
