Gulf families face economic strain as governments seek new allies against Iran threat

Families across the Arabian Peninsula are watching their economic lifelines fray. Shipping routes that carry their energy exports sit under threat. Their territories remain exposed to potential Iranian retaliation. And the governments they depend on are scrambling for a diplomatic solution that, so far, no one has been able to deliver.

Following US and Israeli military strikes on Iran on February 28, Gulf Arab governments have shifted their diplomatic focus away from Washington and toward Beijing, hoping China can leverage its economic ties to pressure Tehran into reopening critical shipping routes and stepping back from regional conflict. Three regional sources describe a deepening frustration with American capacity to manage the crisis.

Additional reference context is available at https://www.timesofisrael.com/frustrated-with-the-us-gulf-states-look-to-china-for-help-reining-in-iran/.

China’s position in this equation is uniquely powerful. Beijing is simultaneously the Gulf’s largest trading partner and Iran’s biggest buyer of oil. Foreign Minister Wang Yi has conducted dozens of calls and meetings with regional counterparts in recent weeks, and special envoy Zhai Jun has traveled to Gulf capitals and Tehran. China’s foreign ministry stated that “China has maintained close communication with all parties, and has consistently worked to stop the fighting and promote peace.”

The reality on the ground tells a more complicated story.

Despite these diplomatic overtures, Beijing has refrained from publicly challenging Tehran’s threats to shipping. That silence has raised hard questions about China’s actual willingness to pressure its Iranian partner. One Gulf source with direct knowledge of the situation explained the delicate balance: “There’s huge respect between the Gulf and China and they are a big trading partner, so any issue is raised in a very quiet manner.” The same source acknowledged that Gulf governments hope Beijing will steer Tehran toward a negotiated settlement, while recognizing that China “often moves slowly and cautiously.”

A second Gulf source was more candid about Beijing’s limits. “The Chinese are trying to be more involved; they are trying to be more helpful,” the source said. “But China has turned out not to be as influential as we thought, whether that is a lack of will or a lack of capacity is debatable. What seems to happen when America enters the fray is that superpower calculations dominate over everything else.”

Henry Tugendhat, a China specialist at the Washington Institute, explained Beijing’s strategic calculus. Rather than openly siding with either camp, China’s overriding priority is preserving relationships across the region to avoid diplomatic fallout. Once Washington became directly involved in the conflict, Beijing’s calculations extended beyond the Gulf to encompass its wider rivalry with the United States. As one source with direct knowledge of China’s discussions put it: “Gulf governments can buy Chinese technology, investment and drones, but what they cannot buy is Chinese leverage that operates independently of its relations with Washington.”

China’s diplomatic footprint in the Middle East has expanded significantly since a 2022 summit with the six Gulf Cooperation Council states: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Another summit is planned for this year in Riyadh, though it has not yet been confirmed. Beijing brokered a surprise rapprochement between Saudi Arabia and Iran in 2023, a diplomatic achievement now being tested by current hostilities. More recently, China has pushed Pakistan to mediate between Washington and Tehran for a resumption of peace talks, according to three Pakistani sources who spoke to Reuters last week.

Meanwhile, China’s actual leverage remains constrained by structural realities. Anna Borshchevskaya, a senior fellow at the Washington Institute, observed that “narrow bilateral arrangements that helped shield Chinese-linked shipping were the only visible outcome of its diplomatic efforts so far. Beyond that, it’s hard to see what else China has been able, or willing, to achieve.” According to six sources with knowledge of the matter, China has held direct talks with Yemen’s Houthi movement to enable its tankers to sail through the southern Red Sea without being attacked after the Iran-aligned militia pledged to prevent access to Saudi ports. Chinese-linked ships have largely been kept out of harm’s way. No broader pressure has emerged to end attacks on other vessels.

The war has paradoxically served some of China’s interests. Beijing has benefited from steep discounts on Iranian oil resulting from international sanctions, and over the years it has increased support for Iranian security through dual-use components, chip equipment and satellite navigation systems. Since the conflict began, Beijing has consistently denied media reports that it offered chip equipment, intelligence support or defense systems to Iran, insisting its position was “above board and straightforward” and that it “never added fuel to the fire.”

China’s broader approach reflects a longstanding strategic preference. Unlike Washington, which rests its alliances on mutual defense obligations, Beijing builds partnerships around trade, investment and arms sales, with military involvement confined to its immediate vicinity. China has no defense commitments in the Gulf, no military mandate to safeguard regional waterways and little appetite to assume either. Beijing has explicitly stated it is not prepared to use military force to reopen the Strait of Hormuz. Instead, it calls for diplomacy, dialogue and the safety and free flow of international shipping routes.

For Gulf families and workers whose livelihoods depend on those routes staying open, the question of whether that call will ever be backed by real pressure remains unanswered. Gulf states recognize that a prolonged war may serve China’s interests by piling pressure on the United States, even as their own daily economic realities grow more precarious. What the Gulf ultimately cannot purchase from Beijing, as one source concluded, is leverage that operates independently of China’s broader geopolitical rivalry with Washington, and it is ordinary people in the region who are left waiting to see whether that gap ever closes.