This is widely deemed to be bad news for China, the world’s top importer of crude oil. Beijing sources around 40 per cent of its crude oil from the Middle East, with major suppliers including Saudi Arabia, Iran, Iraq, and the United Arab Emirates.
“China is the largest trading partner of the Middle East and the predominant importer of Gulf oil. It wants to promote its Belt and Road Initiative in the region,” said Sun from Fudan University.
A regional conflagration also risks spiking global oil prices, which would increase China’s import bill and strain an economy already feeling the heat from US tariffs, elevated local government debt and an ageing population.
Oil prices surged to their highest in three years on Friday in the wake of Israel’s attack on Iran, although rates have since fallen back.
A spillover of the conflict into more of the Middle East would also threaten the well-being of Chinese nationals in the region, alongside the millions of other foreigners.
According to reports, there are an estimated 1 million Chinese citizens in the Middle East, likely more when including the transient population of Chinese visitors, merchants, and contract workers.
China’s embassies in Israel and Iran have already urged Chinese citizens to leave the respective countries as soon as possible.
Even as the trajectory of the conflict remains in flux, analysts say there’s a chance the regional risks can be kept in check.
“Oil prices remain steady, regional players are sitting on their hands, and absent proxy escalation (means) the fallout may stay contained,” said FDD’s Singleton, calling it “early days”.
“Though a protracted fight could still redraw risk calculations across the Gulf and in the Indo-Pacific.”
A regional escalation would be a “nightmare scenario”, said the Atlantic Council’s Fulton.
“It really comes down to Israeli calculus – are they willing to go all in to achieve their goals, or will cooler heads prevail?”
https://www.channelnewsasia.com/east-asia/china-mediate-israel-iran-conflict-war-middle-east-risks-5188641
