China's Leverage Over Iran Limited as Middle East Tensions Escalate

Iran reported seven deaths including two military commanders from the Damascus airstrike that triggered the retaliatory Iranian strikes.
China lacks real coercive power and remains primarily interested in trade
Analysts explain why Beijing's economic ties to Iran don't translate into political influence over Tehran's actions.

In the aftermath of Iran's unprecedented direct assault on Israeli territory — itself a response to the killing of Iranian commanders in Damascus — Beijing called for calm while revealing the quiet limits of its influence. China controls the lifeline of Iran's oil economy, yet analysts observe that wielding such power openly would fracture the very image of impartial partnership Beijing has spent years cultivating across the Global South. Rather than pressing Tehran, China has concluded that the wound requiring treatment is not Iranian retaliation but the unresolved war in Gaza — and that the hand capable of closing it belongs to Washington, not Beijing.

  • Iran's mass drone and missile barrage against Israel — the first ever launched directly from Iranian soil — transformed a shadow conflict into open warfare overnight, sending shockwaves through capitals from Washington to Tokyo.
  • The United States urgently sought China's help to restrain Tehran, but Beijing's repeated attempts to influence Iranian behavior, including over Houthi attacks on Red Sea shipping, have produced little measurable effect.
  • China holds enormous theoretical leverage — purchasing 90% of Iran's oil exports — yet deploying it as a weapon would contradict Beijing's carefully constructed identity as a non-coercive economic partner to the developing world.
  • Beijing's silence after Iran's strike on Israel, contrasted with its sharp condemnation of Israel's Damascus bombing, signals a deep structural sympathy rooted in China's own 1999 embassy bombing by NATO forces in Belgrade.
  • While Japan, India, and Southeast Asian nations issued urgent calls for de-escalation, the region edges closer to wider conflict with no clear actor possessing both the will and the leverage to pull it back from the brink.

The day after Iran launched hundreds of drones and missiles directly at Israel — the first such assault ever fired from Iranian soil — Beijing issued a measured appeal for restraint, urging "relevant parties" and influential nations to help stabilize the region. China framed the crisis as an extension of the Gaza war, one that needed to end as quickly as possible.

The strikes were Iran's retaliation for an April 1 airstrike on its diplomatic compound in Damascus, which killed seven people including two senior military commanders. That attack dragged a long-running shadow conflict into open warfare. Washington, alarmed, turned to Beijing for help — as it had before, pressing China to use its influence with Tehran to curb Houthi attacks on Red Sea shipping. Those efforts had yielded little.

On paper, China's leverage over Iran is formidable: Beijing is Iran's largest trading partner and buys 90 percent of its oil exports, a vital economic artery for a country under heavy American sanctions. But analysts warn that openly weaponizing that relationship would undermine China's broader strategy of positioning itself as a trusted, non-coercive partner across the Global South. Xi Jinping has invested heavily in that image — brokering a landmark Saudi-Iranian agreement last year and pledging "Chinese wisdom" to regional peace. Compelling Iran to stand down is a different matter entirely.

In practice, Beijing's relationship with Tehran is already strained by chronic underinvestment and broken promises. China is willing to participate in diplomacy but lacks genuine coercive power, and it is wary of overextending itself. Its conclusion is that the root cause of the crisis is not Iranian aggression but the unresolved war in Gaza — and that the United States must pressure Israel toward a negotiated settlement, including a two-state solution.

Beijing's refusal to condemn Iran's strikes, while having sharply condemned Israel's Damascus bombing, laid bare this asymmetry. Analysts trace it to a formative wound: in 1999, American pilots struck the Chinese Embassy in Belgrade during NATO's Yugoslavia campaign, killing three journalists. Beijing never fully accepted Washington's explanation, and that memory quietly shapes how China reads Iran's position today. As Japan, India, and Southeast Asian nations called urgently for de-escalation, China's willingness — and ability — to restrain Tehran remained deeply in doubt.

Beijing issued a carefully worded appeal for calm on Sunday, the day after Iran unleashed hundreds of drones and missiles directly at Israel—the first time Tehran had launched such an assault from its own territory. The Chinese Foreign Ministry urged "relevant parties" to show restraint and called on the international community, particularly influential nations, to help stabilize the region. The statement framed the crisis as an extension of the Gaza war, one that should end as soon as possible.

The Iranian strikes were retaliation for an airstrike on a diplomatic compound in Damascus on April 1, which Tehran said killed seven people, including two senior military commanders. That attack pushed the long-running shadow conflict between Iran and Israel into open warfare, alarming Western capitals and prompting the United States to seek Beijing's help in preventing a wider regional conflagration. Secretary of State Antony Blinken had already called China's top diplomat Wang Yi after the Damascus bombing, urging Beijing to pressure Iran not to escalate. This was not the first time Washington had asked China to use its influence with Tehran. In the months following the October outbreak of war between Israel and Hamas, American officials repeatedly pressed Beijing to convince Iran to rein in Houthi rebels, who were attacking commercial shipping in the Red Sea and are believed to receive training, funding, and equipment from Tehran.

On the surface, China appears well-positioned to shape Iranian behavior. For the past decade, Beijing has been Iran's largest trading partner and purchases 90 percent of its oil exports—a critical lifeline for a nation strangled by American sanctions. Chinese firms also supply Iran with security and surveillance technology. Yet analysts say this theoretical leverage is far more difficult to deploy in practice. William Figueroa, an assistant professor at the University of Groningen, explained that weaponizing trade relationships in such a visible way would damage China's broader strategy of deepening economic ties throughout the Global South. China has invested heavily in expanding its political and economic footprint across the Middle East. Xi Jinping has pledged to contribute "Chinese wisdom" to regional peace as part of his Global Security Initiative, positioning Beijing as an alternative to Western-led security arrangements. Last year, China brokered a historic agreement between Saudi Arabia and Iran, two longtime adversaries. But compelling Iran to restrain itself in the current conflict presents a different challenge.

Relations between Beijing and Tehran are already strained. China has chronically underinvested in Iran despite making repeated promises, and previous efforts to influence Iranian policy regarding the Houthis have yielded limited results. Figueroa noted that while China is willing to participate in negotiations, it lacks genuine coercive power in the region and remains primarily focused on trade and diplomacy. Beijing recognizes this limitation and is reluctant to overextend itself the way it believes the United States has done. China is genuinely worried about the risks a broader conflict poses to its regional investments and energy deals, but it has concluded that the root problem lies not with Iran but with the Gaza war itself. From Beijing's perspective, the real solution requires the United States to restrain Israel and push toward a negotiated settlement that includes a two-state solution.

China's refusal to condemn Iran's retaliatory strikes—a stark contrast to the response from the United States and other Western allies—reveals much about how Beijing views the situation. When Israel struck the Iranian compound in Damascus, China issued a strong condemnation, with Foreign Ministry spokesperson Wang Wenbin declaring that "the security of diplomatic institutions must not be violated." But after Iran's direct attack on Israel, Beijing issued no such rebuke. Yun Sun, director of the China program at the Stimson Center in Washington, attributed this asymmetry to China's sympathy for Iran, rooted in Beijing's own traumatic history. In 1999, during a NATO bombing campaign in the former Yugoslavia, American pilots struck the Chinese Embassy in Belgrade, killing three Chinese journalists. President Bill Clinton called it a tragic accident caused by faulty intelligence, but Beijing denounced it as a "barbarian act," and angry protests erupted outside American diplomatic facilities across China. That memory shapes how China views Iran's position today. "It's unlikely, therefore, for China to apply pressure on Iran," Sun said. "For China, had the US applied enough pressure on Israel, neither the Israeli attack nor the Iranian retaliation would have taken place."

Across Asia, other nations responded with alarm. Japan's Prime Minister Kishida strongly condemned Iran's attack and pledged continued diplomatic efforts to prevent further deterioration. India expressed serious concern about the escalation and called for immediate de-escalation, restraint, and a return to diplomacy. India's External Affairs Minister spoke separately with both Israeli and Iranian counterparts to stress the importance of stepping back from violence. The Philippines, Malaysia, and Indonesia also urged restraint. Yet as the region teeters on the edge of wider conflict, China's ability—or willingness—to pull Iran back remains deeply uncertain.

Weaponizing these trade relations, especially in such a high-profile way, would undermine its greater regional strategy of developing close economic ties throughout the Global South.
— William Figueroa, assistant professor at the University of Groningen
For China, had the US applied enough pressure on Israel, neither the Israeli attack nor the Iranian retaliation would have taken place.
— Yun Sun, director of the China program at the Stimson Center
The Hearth Conversation Another angle on the story
Inventor

Why doesn't China just use its oil leverage? It buys 90 percent of Iran's exports. That seems like real power.

Model

It is real power, but only if you're willing to use it publicly. The moment China weaponizes that relationship to pressure Iran, it signals to every other country in the Global South that Beijing's economic ties come with political strings attached. That undermines everything China is trying to build—this image of being a partner without conditions.

Inventor

So China is choosing its long-term strategy over solving this immediate crisis?

Model

Exactly. And it's also convinced that solving the immediate crisis isn't really about restraining Iran anyway. From Beijing's view, Iran wouldn't have struck back if Israel hadn't hit the embassy first. So the real pressure should be on the US to control Israel, not on China to control Iran.

Inventor

That's interesting—China sees itself as the reasonable actor here?

Model

In a way, yes. China remembers 1999, when American pilots bombed its embassy in Belgrade and killed three journalists. That's not ancient history to Beijing. It's a wound. So when Iran retaliates for what it sees as an attack on its sovereignty, China understands that viscerally in a way the West doesn't.

Inventor

Does that sympathy actually matter if the region explodes?

Model

That's the real question. China cares deeply about stability because it has massive investments and energy deals at stake. But it's betting that the solution is political, not coercive—that if Gaza gets resolved, the whole chain reaction stops. It may be right. Or it may be a miscalculation about how much leverage it actually needs to exercise.

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