Welcome to Foreign Policy’s China Brief. The highlights this week: Beijing could be poised to mediate in the Iran war if given the diplomatic space, the official GDP growth target announced at the annual two sessions is surprisingly modest, and another China spying scandal emerges in London.
Could Beijing Bring Tehran to the Table?
As the Iran war moves into a second week, China’s top diplomat Wang Yi is warning of a spreading conflict and calling for peace. But Beijing has avoided direct criticism of Donald Trump ahead of the U.S. president’s expected visit to China in early April.
Welcome to Foreign Policy’s China Brief. The highlights this week: Beijing could be poised to mediate in the Iran war if given the diplomatic space, the official GDP growth target announced at the annual two sessions is surprisingly modest, and another China spying scandal emerges in London.
Could Beijing Bring Tehran to the Table?
As the Iran war moves into a second week, China’s top diplomat Wang Yi is warning of a spreading conflict and calling for peace. But Beijing has avoided direct criticism of Donald Trump ahead of the U.S. president’s expected visit to China in early April.
That may point to a surprising diplomatic role for China in negotiations during the war, as Weilin Deng and Bernard Haykel write in Foreign Policy. China has interests in Iran, including investments of around $4 billion. (Claims of $400 billion worth of Chinese investments in the country refer only to the amount that Beijing pledged to invest over a 25-year period in 2021.)
It’s the Strait of Hormuz that is genuinely critical for China, which sources roughly 45 percent of its oil via the Persian Gulf. Beijing’s strategic oil reserves, which could last for around six months, give it some breathing room, but it’s already blocked diesel and gasoline exports. China has tried to negotiate passage for its ships through the strait with little success.
It might seem difficult to get Trump to back down, but the strait’s closure is sending shockwaves through the global economy, with oil prices spiking and markets falling (then responding positively when the president said that the war might be over soon). The White House could chicken out of an unpopular war, though the economic damage might already be done.
China might be a surprisingly appealing partner to help strike a deal in Iran. Trump is doing his best to court Beijing ahead of his upcoming meeting with Chinese President in Xi Jinping in April, hoping for a headline-making trade deal. China has plenty of potential leverage in Tehran—not least because when the strait reopens, China will likely be buying the majority of Iranian oil.
What would China want from this? Apart from the compelling need to reopen the Strait of Hormuz, Beijing wants continuity in Tehran—in other words, an autocracy that includes people that Chinese officials know and have dealt with before, whether led by the new supreme leader, Mojtaba Khamenei, or someone else.
However, that depends on such people being alive. Some figures who have dealt with Chinese officials before—such as Ali Shamkhani, Iran’s chief negotiator during the Beijing-brokered deal between Iran and Saudi Arabia—were killed during the first week of U.S.-Israeli attacks.
The top Iranian diplomats working with Beijing have so far survived, including Foreign Minister Abbas Araghchi and his deputy, Majid Takht-Ravanchi, as well as former diplomats with ties to China such as Mohammad Javad Zarif.
China’s priority in a post-conflict scenario in Iran is likely to be providing the regime with financial and security lifelines and encouraging it to continue the brutal suppression of internal revolt. In my talks with Chinese officials after Iran’s Green Movement, they saw the Iranian opposition as inspired by the CIA, blaming the uprising on U.S. plotting.
But any peace deal would also depend on skill and experience that may be in short supply in China. The country saw an exodus of Middle Eastern academic experts to universities in Gulf countries such as Qatar after 2017, as growing Islamophobia and political tensions over atrocities in Xinjiang made the study of Islamic societies dangerous and roles abroad more enticing.
Beijing’s diplomatic corps, meanwhile, are overstretched and under-resourced as a result of Xi’s ongoing purges. Since Foreign Minister Qin Gang was purged more than two years ago, he hasn’t been replaced; Yi, who held the job before he was appointed to the more senior post of director of foreign affairs, has been double-hatting his old role.
It’s possible that China might be able to bring a wounded but resistant Iran to the negotiating table for a cease-fire deal, but it might also be trying to keep too many balls in the air.
What We’re Following
Modest GDP ambitions. The two sessions, the annual meetings of China’s rubber-stamp parliament, are wrapping up in Beijing this week. It’s been a season of no surprises, save for a GDP growth target that is more modest than expected.
Rather than the post-COVID pandemic norm of 5 percent, the official target is set at between 4.5 and 5 percent. The shift seems to reflect an economy that—while still developing—has been sobered by problems including a severe real estate bubble, overproduction, and persistent unemployment.
Chinese GDP figures are notoriously unreliable, and depending on who you talk to, real Chinese GDP annual growth could be anywhere from around 5 percent to just 2.5 or 3 percent. There is vigorous debate among analysts as to whether this year’s target is too high and thus likely to worsen debt issues, or too low and likely to discourage investment.
British spy scandal. British politics are caught in yet another China spying scandal, following the mysterious collapse of the prosecution in a key case last year. This time, it has likely cost a Labour member of Parliament her career: Joani Reid resigned as the party whip after her husband, a Labour advisor, was arrested along with two other men under the National Security Act.
The details of the case are not clear yet, but it is hard to imagine that those arrested—experts in Welsh Labour politics—would be able to provide high-grade intelligence to Beijing unless it had an overriding interest in the Caerphilly by-election.
Chinese intelligence casts a very wide net, and that often means paying for information that could as easily be obtained during happy hour at a Westminster bar or subscribing to a political Substack.
FP’s Most Read This Week
Tech and Business
Mideast war lessons. The Iran war is a potential goldmine of data for China about U.S. capabilities and limitations. The Gulf War shocked Chinese experts into rethinking U.S. military strength, especially against a relatively large but under-equipped force—setting the Chinese armed forces on a course of modernization.
It’s unlikely that this conflict will have quite the same effect, despite the technical successes of the U.S.-Israeli operations, given the dismantlement of Iranian defenses in past air campaigns. Nevertheless, China is closely watching not only the United States’ use of technology but also the timescale of replenishment.
I polled some U.S. and Chinese defense experts and journalists about what Beijing would be looking for, and the chief answer was artificial intelligence capabilities and their integration into decision-making. That may spur Chinese efforts to do the same, but it could also produce caution: AI may have been behind the killing of approximately 175 people at a girls’ elementary school in Minab, Iran.
Extortion shift. Since 2023, China has been cracking down on cybercrime syndicates in Southeast Asia carrying out so-called pig butchering schemes, and it is shifting the nature of the region’s organized crime. Before the Chinese measures, the syndicates largely preyed on Chinese citizens, both as kidnapping victims to staff online scams and as targets for those scams.
The crackdown has altered those dynamics. The business is still largely run by Chinese organized crime groups, but the principal kidnapping victims now come from Africa, where governments have done little to protect their citizens. Pig butchering now overwhelmingly targets the West; the syndicates value English-language skills.
