Gulf Leaders' Iran Gamble: Why Beijing's Economic Ties Haven't Curbed Regional Violence

The Gulf’s China Problem

Gulf Arab leaders spent years believing that China’s deepening economic ties to their region would eventually translate into a willingness to restrain Iran. The past three years of violence have demolished that expectation entirely.

The shift reflects a broader reassessment of what Beijing is willing and able to do. When the United States launched military operations that destabilized global energy markets, Arab governments grew increasingly frustrated with Washington’s failure to shield them from Iranian strikes. That frustration might have created space for China to step in. Instead, Beijing’s passivity and refusal to leverage its influence over Tehran made clear that such hopes were misplaced. China, Gulf leaders now understand, will remain focused on economic gain without accepting responsibility for regional security.

The roots of Gulf optimism ran deep. Over the past decade, Beijing’s presence in the region expanded dramatically. In 2023, Gulf Cooperation Council countries (Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman, and Bahrain) supplied approximately 36 percent of China’s total crude oil imports. By 2024, bilateral trade reached nearly 300 billion dollars, surpassing combined trade with the European Union and the United States. Chinese companies invested in renewable energy and space technology. Regional sovereign wealth funds opened offices in Beijing, Hong Kong, and Shanghai. The Chinese diaspora on the Arabian Peninsula grew to more than half a million people.

This economic integration seemed to offer strategic opportunity. China’s substantial leverage over Iran, cemented through a 25-year comprehensive cooperation agreement signed in 2021, suggested that Beijing might use that influence to moderate Tehran’s behavior. When Saudi Arabia and Iran restored diplomatic relations in 2023, China served as guarantor of the agreement. Subsequent trilateral meetings between China, Iran, and Saudi Arabia, most recently in Tehran in December 2025, appeared to signal a new era of diplomatic possibility. Gulf leaders believed that as Chinese interests deepened, Beijing would have incentive to protect them by ensuring stability.

Chinese officials reinforced these expectations. Xi Jinping attended the first China-Arab States Summit and China-Gulf Cooperation Council Summit in Riyadh in 2022, where he acknowledged the UAE’s territorial claims to three disputed islands controlled by Iran. Chinese analysts hailed the Saudi-Iranian détente as the beginning of a “tide of reconciliation.” Gulf governments also calculated that Chinese competition with Washington would benefit them, forcing the United States to work harder to maintain its regional position.

By contrast, the violence that followed the October 2023 Hamas attack on Israel revealed the limits of Beijing’s commitment. When Houthis began striking commercial and military vessels in the Red Sea in late 2023, China did not pressure Iran to restrain its proxy. Instead, Beijing negotiated a private agreement with the Houthis to protect Chinese-flagged ships. During the 2025 Iran war, China again refused to use its leverage over Tehran to prevent Iranian attacks on Gulf partners. Some Gulf states viewed China as complicit in Iranian aggression after Beijing vetoed a UN Security Council resolution calling for an international force to protect shipping in the Strait of Hormuz. Reports also suggested that Chinese companies may have provided geospatial intelligence to help Iran target regional objectives more accurately.

Beijing’s paralysis stemmed from both practical caution and strategic confusion. Since the Arab Spring of 2010-11 and the subsequent expansion of ISIS, Chinese policymakers had debated whether Beijing should expand its role in the Middle East. Critics argued that China needed to do more to protect its interests and stabilize the region. But they offered no clear vision of what that strategy would entail on the ground, when to deploy military force, or how to manage the costs of deeper partnerships with regional powers like Saudi Arabia. For a region marked by turbulence and a history of costly foreign interventions, Beijing concluded that restraint remained the safest course.

The fall of Bashar al-Assad in Syria in 2024 and the 12-day war in 2025 deepened that hesitancy. When the United States and Israel began bombing Iran in February, Beijing lacked a clearly articulated alternative plan to protect its economic assets and avoid being drawn into protracted conflict. Gulf concerns went unaddressed. Gulf states were left vulnerable.

The consequences are reshaping Gulf strategy. Energy cooperation between China and the Gulf will continue. As the world transitions toward renewable energy and electrification, China’s leadership in green technology makes it an essential partner for Gulf states pursuing their own energy transitions. Chinese companies will keep funding mining and construction projects. Sovereign wealth funds will expand their portfolios in Chinese markets. But the war has demonstrated that economic interests do not translate into security assistance.

This realization has fractured Gulf consensus. Oman and Saudi Arabia, wary of overreliance on Washington, are pursuing hedging strategies. In July, Omani Foreign Minister Sayyid Badr al-Busaidi published an article in Le Monde calling for a post-American security order that would include Gulf monarchies, Iran, and Iraq. Bahrain, Kuwait, and the UAE are moving in the opposite direction, deepening ties with Washington as the safest available option. Even those countries embracing the U.S. security umbrella are simultaneously investing in their own defenses, opening dialogues with Iran to reduce tensions, and building security partnerships with Turkey and Pakistan.

As Gulf Arab states search for alternatives, China’s interest in greater regional security involvement continues to decline. Beijing can maintain valuable economic relationships with minimal risk of security entanglement. The Gulf-Chinese relationship increasingly resembles the Iranian-Chinese relationship: a partnership sustained by necessity rather than rising expectations. Gulf Arab countries take some consolation in the fact that they have more to offer China economically than Iran does, which may position them more favorably with Beijing once the current conflict ends. Whether that economic leverage ever translates into genuine strategic weight remains the open question hanging over every calculation in the region. More analysis can be found at https://www.foreignaffairs.com/china/gulfs-china-problem.