China’s quiet harvest: As America fights, Asia turns to Beijing

More than a month into the US-Israeli war with Iran, the central question is no longer whether China can avoid the costs. It cannot. The more important question is whether others will emerge even less able to bear them.

China is not becoming the Gulf’s military stabiliser. It is emerging instead as the power best placed to cushion the downstream effects of instability for energy- and import-dependent Asian states — and to look steadier and more useful than the actor that helped trigger the crisis.

China’s exposure is substantial. It remains heavily dependent on Middle Eastern hydrocarbons, importing large volumes of crude oil and liquefied natural gas (LNG) from the region, while the war has disrupted the shipping corridor through which roughly one-fifth of global oil flows and a significant share of seaborne gas and fertiliser trade normally pass. Commercial traffic through the Strait of Hormuz has been heavily curtailed, insurers and shipowners have grown more cautious, and the International Maritime Organization (IMO) has called for a safe corridor to evacuate stranded seafarers. Even with the ceasefire announced on 8 April, shipping in the Strait of Hormuz remains at a trickle.

The consequences are visible across Asia. China’s own moves to preserve domestic stability have compounded the regional squeeze. Beijing’s ban on exports of diesel, gasoline and jet fuel is tightening already strained energy markets from the Philippines to Australia, while importers that had long relied on China as a swing supplier are being forced to scramble for alternatives. The immediate picture, then, is not one of Chinese immunity — it is one of Chinese vulnerability managed more effectively than that of its neighbours.

That exposure is increasingly visible at the firm level. Small and medium-sized enterprises — many operating on thin margins — are being squeezed by war-driven increases in input costs, from energy to transport. This is adding to policymakers’ challenges even as the National Development and Reform Commission moves to cap domestic gasoline prices to contain inflation and preserve social stability.

This gap in resilience reflects years of preparation. Strategic stockpiling, large-scale refining capacity, the state’s ability to redirect supply administratively, and sustained investment in renewables and electric vehicles have created buffers that many other Asian economies lack. These are not incidental advantages, but the cumulative result of a policy model long criticised as overbearing and interventionist, now partly vindicated by the crisis.

China is not insulated. But it is more insulated than others. And in regional politics, relative resilience can matter more than absolute strength.

The most revealing Chinese moves of the crisis may involve not oil, but fertiliser.

In recent days, Beijing has tightened restrictions on fertiliser exports, further constricting a market already squeezed by Gulf disruption. The measures reportedly affect a broad range of product lines and could leave only limited categories exportable, with potentially up to 40 million metric tons of Chinese fertiliser trade constrained. Global urea prices have already climbed sharply since the war began.

The official rationale is credible enough: protect domestic supply, shield Chinese farmers from input shocks and prevent food-price volatility at home. The export restrictions reflect tight domestic supply conditions and a policy preference for protecting food security and insulating the home market from wartime price swings.

But to leave the story there would be to miss the wider significance. In much of Asia, fertiliser is not simply an agricultural input. It is a transmission belt between international disruption and domestic political stability. Shortages push up food prices, strain subsidy systems, squeeze farmers, worsen fiscal pressures and heighten the risk of social discontent. Any country able to ease that pressure selectively acquires influence that extends well beyond trade.

This is what makes China’s fertiliser posture interesting — and strategically important. Beijing is not merely withholding supply. It is also deciding, implicitly or explicitly, who might continue to receive relief, on what terms, and through which channels. That matters especially because countries such as India have sought additional Chinese volumes as Gulf-related disruptions deepen. Even states actively trying to reduce strategic exposure to China may find themselves pulled back into dependence when regional shocks hit.

That dynamic is likely to matter across much of the developing world. Countries from Brazil and Indonesia to Thailand and Malaysia are exposed to the tightening market, and several have already come to rely on Chinese supply as a buffer against volatility elsewhere. Beijing’s ability to ration pain, selectively release volumes and frame those decisions as responsible stewardship rather than opportunistic profiteering gives it a form of leverage that is simultaneously economic, political and reputational.

There is a deeper structural possibility here as well. As demographic decline gradually reduces pressure on agricultural land and alters the logic of domestic food security, China’s fertiliser sector may come to be viewed in Beijing less as a purely commercial industry than as a strategic instrument embedded in a broader architecture of commodity resilience and geopolitical influence.

If fertiliser reveals one side of China’s emerging leverage, Southeast Asia reveals another.

Across the region, governments have been scrambling to manage the fallout from the war and the disruption of Hormuz. Energy shortages, emergency fuel purchases and conservation measures have become central features of the crisis response. China has moved quickly to present itself as ready to cooperate with Southeast Asian states on energy security, even as its own fuel export restrictions worsen the squeeze in some markets. That tension is important: Beijing is simultaneously part of the problem and, for many countries, still part of the solution.

The significance of this moment should not be overstated, but neither should it be missed. For years, many Southeast Asian governments tried to compartmentalise their external relations through deep economic interdependence with China alongside strategic reassurance from the US. The Iran war may not erase that formula, but it does expose its limits. The actor helping generate the security shock is not the same actor best placed to cushion its immediate economic consequences.

That creates an opening for Beijing, though not in the simplistic sense of producing instant geopolitical dividends. The more plausible outcome is subtler and arguably more durable, in the form of the reinforcement of a regional habit of turning to China when material stability is at stake, even while resisting Chinese power in the security domain. The crisis may help China convert commercial centrality into political capital, not by making its neighbours trust it more strategically, but by making it harder for them to function without it.

That may prove especially consequential in countries where political friction with Beijing had narrowed room for cooperation. Emergency dependence does not dissolve maritime disputes or erase hedging behaviour. But it can narrow political distance, normalise pragmatic engagement, and reinforce the perception that China is materially useful while Washington is materially costly.

One of the more persistent misconceptions in Western analysis is the tendency to treat China’s limited response to the war as evidence of passivity or weakness. In fact, Beijing’s restraint appears less like paralysis than calculation.

China’s ties with Iran are real but often exaggerated. The point is not that Tehran is unimportant to Beijing, but that the relationship has never amounted to a security commitment. China’s posture across the Middle East has long resembled portfolio diversification more than bloc politics, maintaining workable ties with Iran, Saudi Arabia, the UAE, and other regional actors while avoiding entanglements that would force a hard strategic choice among them.

Seen in that light, Beijing’s muted approach makes sense. China has little interest in sacrificing manageable relations with Washington, the Gulf monarchies, or major Asian trade partners in order to demonstrate solidarity with a weakened Iran. Its objective is not to rescue Tehran militarily. It is to preserve access and flexibility across a region in flux.

There is also a wider strategic logic. For Beijing, the war’s value lies not only in temporary American distraction, but in the renewed demonstration that US military primacy can itself generate the very instability it claims to contain. China does not need to outfight the US to gain from this. It needs only to let American activism reinforce an already familiar regional perception, namely that Washington remains indispensable in hard-security terms, but increasingly volatile in ways that impose heavy costs on others.

That reputational asymmetry works in China’s favour. The US is judged as the system’s security manager and therefore bears direct responsibility for the disorder it unleashes. China, by contrast, is judged by a lower bar. It need not secure the Gulf militarily to accrue political credit. It can do so simply by mitigating some of the economic fallout.

None of this adds up to an uncomplicated Chinese victory.

First, China cannot replace Gulf energy flows. However effective its stockpiles, crisis controls, and industrial buffers may be, Beijing remains deeply exposed to the region’s hydrocarbons. A prolonged disruption of Hormuz is not a scenario China can simply manipulate to its net benefit. It remains a structural vulnerability, as shown by the continuing market turmoil around the strait and the broader G7 push to protect energy supplies and maritime routes.

Second, selective relief can generate anxiety as well as gratitude. Countries that turn to China for fertiliser, fuel or emergency coordination may welcome the help while also drawing uncomfortable conclusions about the depth of their dependence. That can strengthen hedging behaviour rather than alignment. 

Third, Beijing’s domestic-first logic carries reputational costs of its own. China has worked hard to present itself to developing economies as a steadier alternative to an erratic Washington. But export restrictions, however rational at home, are being felt sharply in the very Global South markets whose goodwill China seeks. If governments conclude that Beijing is willing to tighten supplies at the first sign of serious stress, the image of China as an anchor of stability could fray.

The real question, then, is how Beijing manages the next phase. If it selectively releases supplies through bilateral state-to-state arrangements, it may bind recipients closer while preserving the appearance of responsible stewardship. If it simply lets markets absorb the shock, it risks undercutting its own narrative.

Three broad scenarios lie ahead. If the war winds down relatively soon and the region settles into something resembling the prewar order, China will likely emerge looking prudent while the US looks reckless — a diplomatic gain achieved without major Chinese sacrifice.

If the conflict deepens and attacks on energy infrastructure persist, China will suffer continued economic disruption, but it will also face sustained regional demand for exactly the kinds of buffers and coordination it is well placed to provide.

If, less likely, a post-Islamic Republic government eventually emerges in Tehran, China’s refusal to tie itself too closely to the old order may preserve its commercial access and reconstruction opportunities.

In each case, the pattern is similar. The war’s most significant consequence may not be who prevails on the battlefield, or even who shapes events in Iran, but that an American-led conflict has deepened Asia’s reliance on Chinese resilience, supply and coordination. Beijing did not choose this war, but it may be better positioned than Washington to shape its regional consequences.

That is the quiet harvest now coming into view, not Chinese primacy or a clean windfall, but a crisis deepening regional dependence in ways that favor Beijing. The war has reaffirmed China’s instincts on resilience, supply security, and strategic patience, without resolving its underlying dilemmas.

Related: China holds the cards: Fertiliser, fuel and the Middle East crisis | China’s quiet brokerage: Can Beijing make the US-Iran truce stick?