Here’s Why China Is A Quiet Force in the Israel-Iran Conflict

China has condemned Israel's attack on Iran, while offering to play a positive role in facilitating dialogue between the two countries. China's economic ties to the region add to its geopolitical heft - and it's the latest example of Beijing’s growing role as a global power-broker and diplomatic force. Bloomberg News's Senior Executive Editor for the Greater China Region joins host Stephen Carroll to discuss.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. I'm Stephen Carroll, and
this is Here's Why, where we take one new story
and explain it in just a few minutes with our
experts Here at Bloomberg.

Speaker 2 (00:20):
We've taken out top military commanders, senior nuclear scientists, the
Islamic regime's most significant enrichment facility, and a large portion
of its ballistic missile arsenal. More is on the way.

Speaker 1 (00:35):
The escalation in the conflict between Iran and Israel has
sent shockwaves across the Middle East and through global markets.
While much of the focus has been on the United
States role, there's another economic powerhouse that's watching closely. As
Middle East energy expert Alan Wald explains.

Speaker 3 (00:51):
China is a really big player. China is basically the
largest customer for these Persian golf producers that includes Iran
and Saudi Arabia and other And you don't want to
kick the nest when it comes to China. China is
not going to like it if their ships are disrupted,
if there are access to oil is disrupted.

Speaker 1 (01:09):
So here's why China is a key player in the
Israel Iran conflict. Our Greater China Executive editor John Lewell
joins us now for more John, First of all, how
important is Iran to China.

Speaker 4 (01:26):
China is the world's largest importer of oil and needs
that oil to power its economy. That economy has been weak.
It's been struggling with consumer prices, it's been struggling with
efficiency and productivity. Higher oil prices is not going to
help that. And volatility upheaval in the Middle East and

(01:48):
around the world is not going to help. It's not
going to mean people are going to buy more Chinese exports.
And so much of the oil that China needs comes
from the Middle East, And because of American sanctions, China
is substantially the biggest buyer of Iranian oil, and so
the sticks are high.

Speaker 1 (02:06):
So a strong economic link then between Iran and China.
But what about Beijing's relationship with Israel? How close are
those countries.

Speaker 4 (02:14):
The relationship with Israel is a difficult one at the moment,
and primarily that is because of how close a relationship
Israel has with the United States and the fact that
China and the United States are embroiled in this rivalry.
And so as part of that rivalry between the US
and China, China has wanted to present itself on the
global stage as being a champion of the global South,

(02:37):
and the Muslim world is a very important part of
that global South that China wants to get on its side.
And so whenever there's been a conflict Israel's conduct in Gaza,
in Lebanon, and now with Iran, China has on the
global stage stood with the Muslim countries as part of
this attempt to become this champion of the global South.

Speaker 1 (03:00):
What is Beijing said about this escalation between Iran and
Israel so far?

Speaker 4 (03:05):
So a day after the bombings in Iran started, a
Chinese Foreign Minister Wang You called both the foreign ministers
of Iran and the fore minister of Israel. He told
the Iranian foreign minister the China condemned the attacks, and
he told the Israeli foreign minister that China was very
opposed to the attacks. And so a few days after that,

(03:26):
President Sheijing Ping came out and said that China was
deeply worried about the situation in Iran. And in both instances,
President Chi and Foreign Minister Wang You have come out
to say that China wants to play a role in
diplomacy that they do not think diplomacy has been you know,
lost the way. They still think diplomacy is a way

(03:47):
that the nuclear issue can be resolved.

Speaker 1 (03:50):
China has been a mediator in the Middle East before
brokering a deal between Saudi Arabia and Iran and in
twenty twenty three. Is the region a strategic priority for Chinese?

Speaker 4 (04:00):
I wanna say it is a priority, although I think
in this instance it will be more difficult for China
to play the mediator than it was in twenty twenty
three with Iran and Saudi Arabia, because China has a
relatively good relationship with both Iran and Saudi Arabia, whereas
we are just discussing the relationship with Israel and by extension,

(04:21):
the United States has been much more difficult, and so
I think there would be much more suspicion on the
part of Israel and the United States on how fair
and unbiased the mediator China could be in the situation.

Speaker 1 (04:34):
What should we have learned from how China has responded
to previous episodes of violence and then at least to
understand how their response might play out from here.

Speaker 4 (04:44):
I think the response will be limited to rhetoric, and
I think you will hear a lot of rhetoric coming
out of Beijing condemning the Israeli attacks, also drawing a
line between Israel and the United States. But I think
it will stay at rhetoric because one China has actually

(05:06):
deeper economic ties with Saudi Arabia and the Gulf States.
China not only buys energy from those places, but it
also invests in those places. You have Chinese companies building
factories there, There's a Chinese self driving company, pony Ai,
who's putting driverless vehicles on the roads in those countries,
and so that economic relationship is much deeper than the

(05:27):
one that China has with Iran. And I think also
it's important to note that if this conflict results in
the United States being embroiled and yet another Middle East conflict,
Beijing's not going to be unhappy about that.

Speaker 1 (05:40):
What could provoke a greater reaction from China in terms
of defending its links to Iran.

Speaker 4 (05:47):
I think if there was some action directly against the regime,
that there was an effort to topple the regime, I
think that would be very sensitive to China, because there
is the suspicion in Beijing that ultimately that is what
the United States wants for China as well, regime change,

(06:07):
and so I think you would see an uptick in
the rhetoric. But again, I don't think it would go
beyond that. I don't think Beijing is ready to take
up arms for Iran.

Speaker 1 (06:17):
How does what's happening in the Middle East play into
where China's relationship is with the United States at the moment?
Will the trade issues become embroiled and influence how China
is going to act from here?

Speaker 4 (06:30):
I think China will use what's happening with Iran as
a propaganda tool. We've seen that with Gaza, We've seen
that with Lebanon. I think we will see it again.
We will see China try and paint Israel in the
United States as being co conspirators and conducting themselves poorly

(06:53):
on the global stage. I don't think China wants to
be embroiled any further than that. And I don't think
China is going to, let's say, offer rare earth magnets
of the United States, let's up on, you know, supporting Israel.
I don't think those cards are on the table.

Speaker 1 (07:11):
John lou Are, Greater China Executive Editor, thank you very much.
For more explanations like this from our team of three
thousand journalists and analysts around the world, go to bloomberg
dot com slash explainers. I'm Stephen Carroll. This is here's why.
I'll be back next week with more. Thanks for listening.