China, Iran, and the Gulf: What Beijing Seeks from the War

The world is watching the war in Iran — and so is Beijing. In this episode of What Comes Next?, Host and TAG Senior Advisor Mira Rapp-Hooper speaks with Michael Singh, managing director and Steven D. Levy senior fellow at The Washington Institute, about how China views the conflict through three lenses: core interests (especially energy and trade), connectivity ambitions, and strategic competition with the United States. They examine the limits of China-Iran alignment, what Iran may be seeking from China, and how sanctions and U.S.-China dynamics constrain Beijing’s choices ahead of the Trump-Xi summit. They also explore China’s expanding economic ties with Gulf states, questions about China’s credibility as a mediator in the U.S.-Iran war, and what the conflict means for global business risk — from chokepoints like the Strait of Hormuz to defense and energy diversification. 

What Comes Next with Mira Rapp-Hooper is produced by Rivan Dwiastono, executive produced by Lauren Dueck, with editorial input from Prashant Jha. It contains music by Cody Martin via Soundstripe. 

What Comes Next is a production of The Asia Group, and is powered by TAG AI, TAG's geopolitical decision engine for businesses.

Transcript

SPEAKER_02 0:00

China and Iran share that interest. They share some of those direct interests, but I think you're absolutely right. These are not allies. They come together from time to time when their interests converge. You don't really want to go to Beijing to talk about Iran if you can avoid it. There's enough issues on the agenda that to add one more very difficult issue where, frankly, the U.S. is uh in a tight spot and maybe could really use help from Beijing, that's not the position you want to put the president in for that visit.

SPEAKER_01 0:35

With the conflict with Iran continuing to draw on, although, of course, in a ceasefire with the Strait of Hermuz currently blockaded, eyes have increasingly turned to the question of what China's role has been in this conflict and what China's role will be in a post-conflict Middle Eastern world. China, of course, is a longtime partner of Iran, but has been very deliberately growing its relations with Gulf states in recent years. And this conflict takes place as President Xi Jinping of China is preparing to meet with President Trump in Beijing in mid-May. We've heard reports of China serving a mediating role alongside Pakistan, providing diplomatic support to Iran, potentially even providing military support for Iran. But its role in all of these recent events, I think, is poorly understood. And in particular, the role between China and Iran in this conflict is not nearly as well as understood as it could be. Given the importance of all of these dynamics and the fact that all eyes will be on Trump and Xi in just a few weeks, my next guest brings so much to the table for us to dig into. Michael Singh is the managing director and the Stephen Levy Senior Fellow at the Washington Institute and was formerly the senior director for Middle Eastern Affairs at the National Security Council during the Bush administration. Mike Singh was responsible for U.S. national security policy for all of Iran and previously also served as a special assistant for Secretary of State Condaleza Rice and Secretary of State Colin Powell. Let's give a listen. Mike Singh, thanks so much for joining us on what comes next.

SPEAKER_02 2:17

It's a pleasure to be with you, Mira.

SPEAKER_01 2:19

I've really been looking forward to chatting with you for several days now because, of course, the world has been watching, really kind of enraptured by the war over Iran in the last couple of months. And of course, at the Asia Group, we are always sifting through the Asia-facing dimensions of any major geopolitical development. But one of the themes, one of the threads of this conflict that I feel is growing kind of more interesting by the day is the question of what China's involvement and perspective on this conflict really is and how this conflict might actually contribute to the transformation of China's relationship both with Iran and with the Gulf, if in fact it does. And there's really no one better to kind of talk us through that huge basket of issues than you, Mike. You're second to none, obviously, when it comes to Middle East politics, but also China's relationship with the region and how it's been evolving in recent years. So again, really looking forward to the chat. I'll say for our listeners, given how quickly this conflict is evolving, that we're recording this podcast on Monday evening, Monday night, uh, on Mike's side, where he's very generously patching in from abroad. But this podcast will be released on Thursday. So please keep in mind that events may develop between the recording and the release. With that, all out of the way, I'd love to dive in. Mike, I think there's a kind of widespread assumption in the foreign policy community, although it's not ever very well tested, that Iran and China are strategic allies. Um, increasingly in Washington, we talk about China, Russia, Iran, and North Korea as kind of an unholy quad of sorts, right? Um, we hear lots of different acronyms bandied about for the four of them. Uh, but there's been this sentiment that strategic alignment between them all is growing. And yet, in practice, there are many aspects of the China-Iran relationship that look more like an uneasy partnership than anything that we in the United States would call a formal alliance. Along the way, Beijing, over the course of this last year, has been weighing the possibility of a rapprochement with the United States as President Xi prepares to meet with President Trump in just about a month's time. And China, in addition to its partnership with Iran, has been cultivating stronger ties with many Gulf states over recent years. So I wonder if we could start with you just giving us the lay of the land of China's relationship with this region as it stood before the conflict began. How you characterize that China-Iran relationship and how the China Gulf relationships have been evolving.

SPEAKER_02 4:59

Well, sure, Mir, and it's great to be on this podcast with you. I mean, you obviously know China so well, and I'm actually really looking forward to hearing what you have to say about it too. You know, I'm you mentioned I'm sitting here in Europe actually right now, and this war has really sort of gripped the attention of the world, and it's affected the entire world because, especially the impact on energy markets, for example. And I imagine if I were sitting in a hotel room in Asia, you know, that my conversations with the with sort of local officials and so forth would show even more sort of concern and consternation because, you know, Asia, of course, is where all the energy from the Gulf is going for the most part. Uh, and a lot of it is going, has been going to China. And so the war, I think, really presents a conundrum, a mixed picture for the Chinese. I mean, I've always thought, Mira, that the way that the Chinese look at the Middle East is through sort of three different lenses. If you'll sort of uh excuse a little bit of an academic construct, I mean, one is just the lens of their interests. China has interests, obviously, around the world and in the Middle East, which are very powerful. And I think the first of those interests in the Middle East, of course, is energy. China, as you know, is heavily dependent on imported energy. Uh, and China has been looking in recent years to mitigate to some extent that dependency they have on the Middle East through building up a strategic petroleum reserve and through diversifying their energy sources, policies which I think right now in Beijing probably look very intelligent in light of the current crisis. And obviously, China has lots of other interests in the Middle East too, in trade and in sort of finding uh destinations for their investment capital, um, other sort of direct interests like freedom of navigation, which we're talking a lot right now, foundational for the global economy and foundational, frankly, for China's economy, even though sometimes they challenge it themselves in their own territorial, uh in their own neighborhood, I should say. So those direct interests are very much at play. And when you look at how those interests are implicated in the Middle East, I think it's clear that China's direct interests lie most strongly with the oil-producing states, which have not just the energy to offer China, but also obviously a tremendous amount of wealth, tremendous number of investment opportunities in tech and in infrastructure and all the places that China likes to invest. Iran, on the other hand, has a much more limited amount of all of that. China has, I mean, sorry, Iran has energy much more difficult to access because of Western sanctions over the years. Um, of course, China has on occasion, and we can talk about this more, been willing to flout those Western sanctions. You know, in reality, they're only willing to go so far on that, and their sort of interest in challenging the United States tends to ebb and flow. In terms of other opportunities, they're really just not there. So there isn't really an investment opportunity in Iran right now for China or frankly anybody else, though there may be in the future. Uh, the second lens, I think, has to do with um aspirations which may or may not be as relevant for China today as they were in the past. And that's this idea of connectivity, the, you know, the Belt and Road Initiative and things like this, where obviously Iran is sort of, you know, very much along the route, as it were, both in a maritime sense, you know, both in a land sense as well, for extending Chinese influence into Central Asia, into Europe, into Africa, and places like this. Um, and I think for a long time, a lot of us thought, well, maybe Iran, for example, would be a logical uh location for, say, a Chinese naval facility or a port facility. That hasn't happened yet. You know, and I think, you know, probably Amir, you know more than me about how China's interests in some of those areas have evolved a bit uh over the years. But the final interest, and I think the one that obviously most concerns, or the final lens, and the one that concerns folks in Washington the most, is really this sort of broader global strategic competition with the United States. And that's where all these sort of, you know, supposed axes come in, you know, whether you call it the axis of upheaval, uh, like, you know, my buddy Richard Fontaine, uh, or whether you call it krink, as some people do, um, this idea that, you know, China, along with Russia, Iran, North Korea, really has an interest in this almost zero-sum contest for prestige, influence, whatever you want to call it with the United States. I think that's absolutely true, but it's not the only thing which is going on. And I think that's what often makes Chinese policy difficult uh to interpret. China and Iran share that interest. They share some of those direct interests, but I think you're absolutely right. These are not allies, they come together from time to time when their interests converge. In a situation like this conflict, um, China has, just like the United States, in a sense, sort of um these interests pulling at each other often. You know, China may like, frankly, to see the United States take a blow to our prestige. On the other hand, they probably don't like to see the Gulf destabilized along the way and to see that threat to their energy interests. So the result is a pretty complicated sort of mess in a sense for China, as it is for so many other countries, I think. That, you know, yes, um, you know, are they helping Iran to some extent? Probably. Behind the scenes, we've seen some indications of that. But would they like the conflict to end and the strait of hormous to open and energy flows to resume? Absolutely. And I would just say, Mira, you know, sort of one extra layer for the Chinese, I think, is thinking about what US actions may mean for China in the future. Uh, and it's not entirely a sort of clear or altogether positive picture as seen from Beijing, I think.

SPEAKER_01 10:53

I think that all sounds absolutely right to me, Mike, and masterfully laid out. You know, we can't um help but assume that, you know, following on the operation that captured Nicholas Maduro and now um this war with Iran, where, you know, one can certainly question the strategic and political goals, the military operational execution has been pretty exquisite. Um, one has to imagine um that the Iranian regime is learning some real lessons from that. And exactly as you say, I see a huge amount of the stake for the PRC coming in the form of the global competition with the United States and doing its very darndest to try to bill this war as hugely problematic from the United States and towards the Gulf region for the sake of burnishing its own credibility with countries that themselves may be more uneasy. We've seen China over the course of the last year increasingly advertising itself as the better alternative to the United States, whether it's following, you know, the announcement of the Liberation Day tariffs or following major military operations. Beijing is never missing an opportunity to demonstrate to the world that it can portray itself as a status quo power amidst recent events. And that certainly speaks directly to what you're saying in terms of global competition. Uh, Richard Pontaine is also a former boss of mine, so I will happily adopt the term axes of upheaval for the remainder of this conversation, also because the acronym Crinks really doesn't work well with me for whatever reason. I just got back from the conference in South Korea, in which I was forced to say it by our wonderful host like a dozen times, and it just kind of gives me the heebie jeebies. Um but but I want to pull on a couple of these um nuggets a little bit further, Mike, because you just laid out so much there. Um, first, you mentioned the fact of the possibility of maybe China providing some very careful assistance to the Iranians and what form that could come in, despite the fact that the strategic interests may be a little bit more limited. Um, and for the purposes of our listeners, I just want to pull on that thread and remind folks that there uh was a report um, you know, by very credible journalists, although I haven't seen it confirmed elsewhere, um, that China uh had sent man pads, um the military system man pads to Iran um for the purposes of this conflict. I think um there are some reasons to think that Beijing would actually be pretty cautious about sending military equipment to Iran in this particular moment, but we can come to that. I want to get your views on what you think Iran may be asking from the PRC and what your kind of spidey sense is about how far that military relationship might uh be able to go. And then, second, just to dig in a little bit further on this evolving relationship between China and the Gulf, where clearly, as you say, there's so much strategic interest, um, a very kind of long runway to where this relationship can go. And in particular, as we talked about on this podcast last week, a lot of Chinese national economic goals that are really furthered by stronger partnership with the Gulf. Um, whether that comes with the ability to export semiconductors, build data centers, do more digital infrastructure, a really good case to be made that the Gulf is kind of a key lily pad for China from a strategic economic sense. Um, so I'd love to just ask you to expound on both of those ideas a little bit further. First, how far would you postulate Iran-China cooperation could go and kind of in the sensitive military space in this moment? And second, where do you see the China Gulf relationship headed? And does this conflict change that trajectory?

SPEAKER_02 14:38

I mean, these are these are really great questions. And, you know, I think in terms of understanding sort of how the US-China relationship has unfolded in the Middle East and where it's likely to go, and where it's likely to go, maybe maybe even beyond the Middle East. I think they're so important. Look, China-Iran cooperation in the military or security sphere. There's not a lot of information out there. Obviously, we have seen China-Russia cooperation in a way that has really concerned Washington. Um, and you know, I think people uh have their views on why Beijing is so committed to this relationship with Russia. Uh, and I think there's multiple angles of it. And that's probably true here with respect to Iran as well. But I think the commitment by China to Iran is probably somewhat less, let's say, than the commitment to Russia in terms of scale. China had a historic role in helping Iran develop its nuclear program. China has had a historic role in supporting Iran's military program. So if you look at a lot of the Iranian missiles, for example, they're ultimately copies of Chinese systems, sometimes via North Korea, sometimes directly from China. Um, so for example, China, I'm sorry, Iran uses anti-ship cruise missiles, which are copies of Chinese missiles. There have been reports, not just of the shipment of, as you said, these sort of man portable air defense systems, man pads from China to Iran, but also reports that China has, both during this conflict as well as after the June 2025 conflict, helped Iran to reconstitute some of its missile capabilities by shipping chemicals or other sort of components of a missile program. You know, I think that to some extent, this gets to that question we were talking about earlier, which is there is this sort of strategic element to the China-Iran relationship where they both oppose the United States. There's an element where, you know, frankly, if you had a scenario of a US-China conflict, obviously it would be very useful for China to have a partner on the Persian Gulf littoral, uh, which otherwise would be a sort of American lake, uh, and an American lake that contains all of China, not all, but most of China's um energy resources. And so there is clearly a sort of desire by China to sort of keep this strategic partner going to some extent. And there may be, frankly, some other motivations as well, maybe some purely economic motivations. But I think they're balancing that to some extent with their relationship with the United States. In fact, I know I once had a Chinese official in my conference room at the Washington Institute, not recently, um, but some years ago, and I and I asked that official this very question about, you know, sort of would China do X, Y, and Z on Iran? And basically the answer was look, at the end of the day, we have bigger fish to fry with the United States than um than Iran. And so you get the sense that the commitment is it only goes so far. Um, and there may be times in the relationship where China backs off significantly overall to avoid sort of causing more problems in the relationship with the United States. That's fascinating to bear in mind, of course, with the Trump Xi summit coming up in mid-May. Um when it comes to China's relationship with the Gulf, I think here, you know, um we see a much more robust relationship, especially as I said, with countries like Saudi Arabia, um, the UAE, Qatar, um, even Iraq, for example, where there's just a lot more economic opportunity. And I think that's really what China is mostly looking to the Middle East for. Uh, and in places like Saudi Arabia, the UAE, and so forth, I don't think we see China, for example, trying to displace American influence. They're not competing with the United States to be, for example, a security partner for Saudi Arabia, even though they are trying to sell their military systems where they can. What we see is we see China trying to simply take advantage of economic opportunity and gain a strategic advantage by a different route, maybe. And that's the route you mentioned, Nira, which is um, you know, could you gain access to uh chips? Could you gain access to uh other technologies, either directly or, you know, sort of via the Gulf from the United States uh or from Europe? Um, and I think that China has seen the Gulf as really a very rich um uh sort of economic uh both destination for Chinese investment in capital and labor, but also vice versa. This has actually changed a lot in recent years because I think, especially under the Biden administration, Mira, there was there were some developments where you know the Gulf suddenly realized that actually the US had a lead in some of the technology areas that they were most interested in. And the U.S. basically put it to these Gulf states like the others that look, you know, it's it's us or them when it comes down to it. And when presented with that choice, uh, in areas where the US had an advantage, in contrast to, say, you know, for example, the whole business with Huawei and 5G networks and so forth, where China had much more of an advantage, the Gulf states showed a lot of um willingness to choose the U.S. over China. And I think that put China in, frankly, a bit of a difficult position. I I think you could exaggerate that, because still there are lots of areas like renewable energy where the Gulf was very interested in doing a lot. Um, and frankly, China was the only game out there. The U.S. was barely even playing uh in that area. You know, if you want to build a sort of you know clean hydrogen plant or something like that, um, China will send a delegation to you tomorrow. It's I think much harder to do that kind of business with the United States. So, so it's a very robust relationship. I think we have had in the United States some success in limiting to some extent that relationship in recent years. And I think there's a big question mark as to whether we'll continue to be able to do that going forward.

SPEAKER_01 20:30

It's a great set of points, Mike. Um, just for our sort of listeners' awareness, uh, the last exam set of examples that Mike uh is referring to from the Biden administration relates to um export controls on semiconductors and also is related to the debate over AI diffusion, um, you know, whether and what kind of AI diffusion rules the United States should adopt, which is a big difference between the Biden administration and this second Trump administration. Um, and as Mike indicated, there was a lot of indication from uh those golf partners early on that they will were willing to play ball with the United States precisely because we um appeared to be ahead in the race. So keeping that margin of advantage really critical to keeping those partnerships. I also think it'll be very interesting to see as China gets better and better and you know really starts to export some of its applications of AI, like AI-enabled robots, how that competition plays in the Gulf, because that's an area where they're likely to have a lot of advantage and certainly do over the United States right now. Um, and you could see the Gulf having an interest in diversifying and being able to play in both sandboxes as that AI competition plays out. I also um just wanted to sort of explain and and Mike get your thoughts on this caveat that I had provided. I said I was a little skeptical about um the single report that we've seen that China um was in discussions about providing those man pads to Iran, the man portable um air defense systems. The reason that I had a little bit of Skepticism at the time that I saw this report is precisely because, as you mentioned, President Chi is preparing to meet with President Trump in mid-April in Beijing. So while it seems to me, as someone who is not a golf expert, but does know China and Asia pretty well, that there's definite potential for China to provide defense industrial based support to Iran over the medium and long term. And things like you said, Mike, like chemicals that could help them reconstitute their missile program, seem to me like more of the sweet spot in which Beijing would be likely to operate. I actually would be surprised if they took a dramatic move in the next three or four weeks to supply Iran with wholesale systems, given that they do have an incentive in getting President Trump to Beijing to try to cut some sort of an arrangement that will have benefits for Beijing. But Mike, I'd be curious how you see that Trump Xi visit interacting in the calculus here.

SPEAKER_02 22:56

You know, I mean, it's it's one of those things, Mir, where I think, you know, I you can argue it either way. And I've heard it argued uh sort of passionately in both directions. I mean, I think that there's an argument out there, which I think is a strong argument, that President Trump does not want to be going to Beijing with this Iran issue unresolved, and especially with Iran in control of the Strait of Hormuz, because you know, the thinking is that then he'll be in a position where really he needs to ask um Xi for his help. He needs to ask Xi Jinping, please pressure the Iranians to reopen the strait for all of our good. And, you know, I think there's an expectation that if if you want the Chinese to do that, they'll ask for something in return. And so suddenly, you know, you're sort of um losing some bargaining power in that visit to Beijing. What's fascinating, though, Mira, to me is when you read Chinese analysts and the things they're putting out, there is this current of thinking that the U.S. blockade of Iranian ports is actually somehow aimed at China. And they kind of turn this logic on their head that in fact, if President Trump comes to Beijing still blockading uh Iranian ports, then the pressure is on China because obviously China's getting its energy largely, as I said, from the Gulf. And, you know, he maybe he's expecting that China would ask the US um to be to lift that blockade or and so on and so forth. Could you insert in here this question of the man pads? And, you know, does China, for example, um want the United States to struggle a bit more to achieve its goals in Iran, to believe that military force can be effective in this kind of scenario? Um, you know, maybe. And I think we could speculate about that, and you could probably, as I said, have a sort of passionate argument on both sides. Or is it frankly just a matter of, as I said, sort of service to a partner in order to kind of keep that partnership um active and alive? I I think there are a lot of explanations, and I think that um the answer is really ultimately we don't know because China's not going to be forthcoming about its strategy with respect to Iran, um, and we can only rely upon the reports that we receive, which in the open source are very few. I think at the end of the day, in my view, if I think if I were sitting in the White House um and I don't know what you think, Mira, because obviously you've been there too, I would say you don't really want to go to Beijing to talk about Iran if you can avoid it. There's enough issues on the agenda that to add one more very difficult issue where frankly the U.S. is uh in a tight spot uh and maybe could really use help from Beijing. That's not the position you want to put the president in for that visit. And my guess is that's why the visit was delayed in the first place, um, is to is in the hopes of avoiding just that scenario.

SPEAKER_01 25:38

I I totally agree, Mike. You would always prefer not to send your boss abroad, not least to a very high consequence uh meeting uh with another major power if the United States is in a bit of a hole, which we clearly are in this moment with respect to this conflict. I think it's also the case, though, that we've seen plenty of evidence that President Trump would really like this visit to happen and really cares a great deal about the relationship with Xi Jinping and wants to be able to come home claiming some kind of a win. Um, so I continue to think that the probability is pretty high that the trip is going to go forward, but there's no question that the team would strongly prefer it to be under circumstances where not only was a ceasefire holding, but the Strait of Hormuz was no longer blocked. And hopefully they were well on their way to some kind of agreement that could be enduring where there wouldn't be asking the Chinese side for help than when they would rather be billing this as a victory. So we're in complete agreement.

SPEAKER_02 26:39

I I think that's right. And I think one thing that's interesting, Mira, and I I unfortunately I don't have it at my fingertips, is that Xi Jinping, for his part, has been, you know, talking to regional leaders. I think he met with Mama Bin Zaid of the UAE, and he's been putting forward this idea of a four-point plan uh for resolving this uh this crisis. And if you look at this four-point plan, it's not actually a plan to resolve the crisis at all. It's much more of a sort of marketing pitch for China because it talks about you know um supporting the international rules-based order. It all basically appears to be a big dig at the United States when it comes down to it, right? Saying, you know, look, um, the US is acting recklessly, lawlessly, even, um, and let's all agree that we're not gonna act this way. And so you can kind of see um the Chinese sort of posturing themselves in a way that frankly they have been doing in the Middle East for some time, criticizing sort of how the US acts, as they did with, say, supporting Israel and Gaza, as they did with supporting the Israeli and then actually conducting our own strikes in June of last year, um, and basically trying to have a bit of a sort of moral upper hand, as it were, as this summit approaches, um, and sort of as the world starts watching sort of how these two great powers interact with each other.

SPEAKER_01 27:56

So this is exactly where I wanted to go next, Mike. I'm so glad that you raised it. Um, and that is to the question of what really is the nature of China's mediating role with respect to all of these Middle East powers as Iran and the United States continue to find a deal elusive. And, you know, we've seen lots of reports that the Chinese have been providing support to Pakistan in their mediating role. They've given counsel to the Iranian side, encouraging them to be flexible, to come to the table, to stay at the table. As you mentioned, there is a Chinese multi-point plan, which vaguely corresponds to the Pakistani five-point plan that was circulated back in March. Um, but it's hard to know what precise role the Chinese side appears to be playing. And exactly as you say, there's clearly kind of reputational burnishing that's going on as part of this supposed mediation backstopping. So give us a sense of what you understand the Chinese role to be in all this and any color you can share about how you think Gulf states in particular are receiving it.

SPEAKER_02 29:06

Yeah, you know, it's it's actually sort of fascinating because, you know, if you go back, say five years or so, Mira, I think there was a view that China was on the rise in the Middle East. Um, and if anything, we were approaching a time of greater direct U.S.-China competition in this region. And I would say actually that has waned a little bit in recent years. I think that there is a sense that this anticipated sort of Chinese rise as a Middle East power really didn't take off. And it was really after October 7th, 2023, the sort of uh heinous Hamas terrorist attacks on Israel, and then everything that followed that helped to sort of undercut China's position in the region, because you didn't see an active Chinese role in either mediating sort of peace or supporting allies. And in fact, you saw something very different, which was you saw China um basically basically throw Israel under the bus to put it my to put it sort of uh colloquially, let's say, um, in an effort to sort of dig at the United States, to win, to score sort of prestige points or or image points against the United States. Then we saw the Chinese basically cut a separate deal with the Houthis and Yemen uh to allow their shipping to pass. And so China, I think, came across as a pretty self-interested power that didn't really value necessarily its relationships in the Middle East, um, or at least didn't really come to the aid of its friends in the Middle East, and in fact, was willing to sacrifice one of its closest partners in the Middle East in Israel for the sake of scoring points against the United States. Um so I think that the the sort of sense of China as an alternative or as a kind of uh a new patron with whom you could hedge your bets against maybe a less reliable Washington, that waned in recent years. Um and then during this conflict, we also really just haven't seen a very active role by China. I mean, we've seen some reports that, yeah, maybe they've put some pressure on Iran to be reasonable in negotiations, but we've seen just as many reports that they've, as you said, sent Iran manned portable air defense systems. Um, but we really just really haven't seen China act as a mediator here. That mediation role, uh in fact, the same kind of role they played between Saudi Arabia and Iran to broker their normalization a number of years ago, has been taken up by Pakistan, and it's been taken up by Pakistan for some of the same reasons that China was able to negotiate or broker an agreement between Saudi Arabia and Iran, because Pakistan essentially has decent relations with both of the main belligerents in this conflict, the US and Iran, and can kind of play that convening role. Um, China can't play that convening role here because it doesn't have that kind of relationship with the United States. Um, and so, you know, what does all of that say about China? Um, I I think what it says basically is that China either right now doesn't have the ability or perhaps the interest or perhaps both to really play a major diplomatic role in a conflict like this.

SPEAKER_01 32:10

I completely agree with that conclusion, Mike. And I tend to think it's elements of all of the above. I think we see a lot of indicator that China would like to get credit for mediating, would like to sort of um get attributed the great power chops that come with the savvy mediation role and trying to broker something like this, claiming influence with all sides. But I think we've continued to see for many years, and this is not just the Trump-Shi relationship, but the China relationship in general, that on many issues, whether it's things like providing for peacekeeping or guaranteeing freedom of navigation or playing a conflict mediation role, the Chinese actually aren't that interested in getting on the hook for providing many forms of global public goods. And while I would never discount the fact that that could happen at some point in time, you do have to take on some risk and really get a little bit messy to perform a mediation role in a conflict that is this high stakes, where so much has already gone on. And I think we've generally seen Beijing shying away from opportunities like this one. So my assessment aligns with yours entirely that um this really is kind of mediation billing when a lot of the credit belongs to Pakistan. I'll be very curious to see how Beijing continues to bell its own role if the conflicts continues to dry on.

SPEAKER_02 33:40

I think that's right. And, you know, I think actually, if anything, Miri, it's an opportunity for the United States to try to put China on the spot on some of these issues. So for example, you know, if President Trump goes to Beijing and he and Xi Jinping can agree that, hey, freedom of navigation through international waterways is a bedrock, you know, sort of principle of the international order that we can both agree to. Well, let's put that in the UN Security Council resolution that says let's support freedom of navigation for all, you know, free and uninhibited through the Strait of Ormuz and other maritime choke points and see if China votes yes or no or abstains. Um I would like to see the United States uh do that sort of thing. Will we? I don't know, because of course our own approach right now to diplomacy is a little bit helterskelter. Um, but I think it's an opportunity, if nothing else, to do that.

SPEAKER_01 34:25

My South China Sea loving heart would love to see that UN resolution, Mike. So I'm I'm with you 100%. I kind of want to dig into the question of where this all goes from here and the role that China might be playing as as things drag on and in particular how it will be perceived. I think you've painted a really detailed, helpful picture for us over the course of this conversation in which you've articulated time and again that the incentives for China really cut both ways in this conflict. There's an opportunity to sort of bill oneself as a great power who is not directly entangled in this war. And there's also a lot of vulnerability and risk that comes along with energy dependency and all of the other factors that you've teased out. We've seen a lot of reporting, um, and I would say that it's sort of started to mount as the conflict drags on, that suggests from different angles that Beijing is likely to be a winner out of this US-Israel-Iran conflict. I've seen that framed in terms of the fact that Gulf states may increasingly tilt towards China because they didn't want this war to happen in the first place and may feel like they can more energetically pursue their economic interests with the PRC now. I've seen it framed in terms of the energy shock brought on by this war, incentivizing both Middle Eastern countries and countries in Southeast Asia to diversify their energy mix, which may inevitably lead them back to China, exactly as you've already indicated. And a number of other storylines that would suggest that by sort of standing to the side and making not too many sudden movements, the PRC may in the end benefit reputationally, economically, diplomatically. How does that feel to you, given the nuanced picture that you have painted for us thus far? Um, looking well beyond a Trump Xi summit, do you tend to think that a few years from now we'll look back on this war as having been an inflection point moment after which Gulf China relations shot up and China became much more of a benefactor in this region? Or is that far too simplistic a read?

SPEAKER_02 36:39

Well, look, I think obviously your listeners will know more than we do right now about uh what transpires this week and how how, if at all, this this conflict is brought to a conclusion or a diplomatic agreement. And obviously that's relevant to the question, how this conflict ends, and whether that is seen as a victory or a defeat for the United States or somewhere in between is obviously relevant to this question. I have to say, you know, um I doubt that any big power in the world, uh, or really maybe any power in the world, especially one which is dependent on energy imports, is going to look at this conflict and feel great, feel like, wow, what a victory for us. Um, I think everyone is going to look at this conflict and be a bit disturbed because we saw, for example, how Iran is able to assert control over the Strait of Four moves and not just on or off binary control, but is actually able to discriminate whose oil shipments can go through and whose can't, and how much they'll charge this country versus that country. Again, that's challenging a sort of bedrock principle of the international order. And any country which is a global trading economy, any country which is an energy importer, I think is going to look at this sort of thing with a lot of trepidation. So I think for China, it's going to contain um some positives. Um, you know, if they would like to see the U.S. taken down a peg, if they would like to see, for example, Gulf countries think that they need maybe better political relations with China because they think maybe China has influence in Iran. Um, there's some advantages there. If they're happy to see American military readiness eroded, for example, there may be some benefits there, as well as the ones that you mentioned, Mira. I think there's also, though, going to be some um sort of more cautionary aspects that come out of this for China. You've seen a brilliant operational performance by the U.S. military, as well as, frankly, um, a pretty successful missile and drone defense in these Gulf countries, um, which may challenge some of the military concepts that Iran has had. You may see, frankly, despite however this conflict ends, you may see closer security relationships between the Gulf states and the United States, and between the Gulf states and Israel. And then frankly, again, China is left a little bit on the sidelines. I mean, China is one of the most important consumers of Gulf energy, maybe the most important consumer of Gulf energy. But what ability have they shown to do anything to safeguard that interest? You have NATO talking about a maritime security mission in the Gulf. You have the U.S. Navy operating there. And where is China? I mean, China may be for now satisfied with this role as a free rider, but being a free rider also means that your interests are in the hands of others at the end of the day. Um, and you know, I wonder if when President Trump said, hey, countries that get their energy from the Gulf, it's time for you guys to step up. I wonder how that was received in China with um with gratitude and sort of pleasure or with a little bit of trepidation that, you know, we don't really want this role at this stage. It's not something we're looking for. So I I think the, you know, I would say the Chinese are neither winners or losers right now. They're learners in a sense. And I'm not sure everything they're learning uh is going to be pleasing to them.

SPEAKER_01 39:53

Once again, incredibly well put. Um, and I do think that conflict is often a time for sort of extreme learning, highly revelatory of information. I should assume that that's true for Beijing as well. As we close up, Mike, what has been a really fascinating and useful conversation. I wonder if I could ask you to put on a slightly different hat for a moment and help us think through how businesses should be pondering this moment. You know, as was the case last year when the trade wars, the critical mineral standoff between the United States and China revealed so much by way of vulnerability and exposure. This conflict with Iran has taught the world, including much of the private sector, a great deal about where energy vulnerabilities lie, market vulnerabilities lie, the fact that Gulf countries uh were by no means immune to attacks from Iran. And the instinct amongst market participants is clearly to want to see some return to stability, um, some idea that whatever their thesis was about the Middle East, the Gulf before, that they're gonna be able to continue to drive forward with their presumptions about what this region will look like. When you talk to folks about how they should think about managing risk in this moment and in the moment after the conflict may have officially concluded, but so many of these political forces remain alive and well, what counsel do you give?

SPEAKER_02 41:26

Well, obviously, this is a really tough conflict when it comes to, you know, global, um, global risk, economic risk, uh political risk, and so forth, in part because it's just been so hard to read where it's going on a day-to-day and week-to-week basis. And yet, you know, something as basic as energy prices has been so implicated. Energy prices feed into so many other things, food, fertilizer, um, you know, transportation, and so forth. Look, I think that there is a worry in the Gulf, in the Middle East, that this is going to really harm the image of places like Dubai and Riyadh and so forth as safe havens for global business. And I think it's absolutely the case that global businesses are going to look at this situation and wonder about the vulnerabilities of um this region for their staff, for their investments, and for things, for example, like transportation and travel, um, given the sort of uh the role that some of these uh cities play as hubs for global air travel, for example. I think on a broader scale, there is going to be a lot of thought about how to diversify, maybe not um just away from oil. That's obviously pretty tough, um, and natural gas, although there will be perhaps increased interest in renewables. But how also to um, you know, sort of create alternate transportation routes. I've had a lot of questions about, you know, how do we decrease our reliance on the Strait of Hormuz? Very tough to do, frankly, because, you know, as however many pipelines you can build, they too are vulnerable and and uh nothing really beats sort of seaborne trade when it comes to to sort of volume and uh and safety. Um, and then frankly, I think there's gonna be uh a bonanza of uh defense startups, defense uh companies looking at questions of how do we more cheaply and effectively counter drones, especially, but also missiles and the types of threats that we've seen here. Uh, you know, you're gonna have, you already have around the world um defense budgets going up. And I think this conflict will help guide, frankly, how that money is spent. Um, is it spent on sort of legacy systems, which may not have been as useful uh in these conflicts, especially for the Gulf countries, US and Israel used them extensively, but the Gulf countries have kept their fighter jets, for example, mostly on the sidelines. Uh, or will it go to you know much cheaper, attritable uh types of systems, which which seem like they're more relevant in the modern context? And so I think look, there's any number of um Lessons that different industries are going to take from this. But I think the bottom line for all industries is that, you know, you may think that this area of the world or that area of the world is sort of, you know, the future of geopolitics, but stability in the Middle East and stability uh in these choke points, like the Strait of Hormuz, is still so important for the entire global economy. We've seen that. And so you just can't get away from making sure you understand the answers to these very basic geopolitical questions when you're sort of making any big business venture anywhere around the world, frankly. Uh I think this has reinforced that, and that'll continue to be true going forward.

SPEAKER_01 44:42

Incredibly wise counsel from you, Mike, saying not only helping us reflect on some of the likely lessons learned from this conflict, uh, but keeping listeners aware and on their toes of constantly being attuned to choke points and evaluating risk around them, which I dare say is a key lesson coming not just out of this conflict, but the last few years of geopolitics that I think is likely to be reverberating for some time. This has been a wonderful chat today. Mike, thanks so much again for joining us.

SPEAKER_02 45:11

Thanks a lot, Mira. Great to be with you.

SPEAKER_01 45:14

As I reflect on my conversation with Mike Singh I keep coming back to a phrase that he used at the end of our conversation. The idea that we shouldn't think about China as necessarily explicitly winning or explicitly losing this US-Israel war with Iran. And that's something that I'm going to really keep in mind. While there are some areas in which I do have real concerns that China may be benefiting, as in the vast US expenditure of valuable munitions that could have been used for defense and deterrence in an Indo-Pacific context if they weren't used in this conflict. It is also decidedly the case that China remains extremely uneasy about its energy security dependency and either unwilling or unable to fully step into and embody the mediating role that it's nonetheless claiming for itself. In any case, I'll be watching closely the dynamics of this conflict, the post-conflict world closely over the course of the coming weeks and months, because I think Mike made the case to us that the question of whether China wins or loses isn't nearly as straightforward as many observers would have us believe. Today's episode was produced by Refund Duyastino, an executive produced by Lauren Dewick with editorial input from Prashant Jia. It contains music by Cody Martin via Soundstripe. What comes next is a production of the Asia Group and is powered by Tag AI, Tag's geopolitical decision engine for business. We'll see you on the next episode.