China's Gaza calculus
Hi readers,
President Donald Trump and Israeli Prime Minister Benjamin Netanyahu announced Monday that they had reached an agreement to end the war in Gaza and secure the release of remaining hostages.
Implementation could calm the region, protecting shipping routes and China’s economic interests, but the deal also introduces a diplomatic dynamic that may push Beijing to the sidelines.
Let's unpack,
Rosaleen Carroll (@roscarroll_)
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Leading this week
As reported by Al-Monitor’s Elizabeth Hagedorn, the plan includes:
➡️ An immediate ceasefire and the release of all hostages within 72 hours of Israel’s acceptance.
➡️ The release of 250 Palestinians serving life sentences, 1,700 detainees from Gaza and the remains of 15 Gazans for each deceased Israeli hostage returned.
➡️ Amnesty for Hamas members who disarm, with safe passage offered to those leaving Gaza.
➡️ Temporary administration of Gaza by a technocratic Palestinian committee that would be overseen by a “Board of Peace” chaired by Trump and other heads of state until Palestinian Authority reforms are completed.
Hamas has not yet publicly given its response to the deal.
China’s reaction
China welcomed the announcement by the White House of the new Gaza peace plan backed by many Arab and Muslim majority states. At a press briefing on Tuesday, Chinese Foreign Ministry spokesperson Guo Jiakun said Beijing “supports all efforts conducive to easing the tensions between Palestine and Israel and calls on relevant parties to implement relevant UN resolutions, realize a full ceasefire in Gaza and release all those held captive at once, and alleviate the humanitarian crisis as soon as possible.”
He added that China “advocates upholding the principle of ‘Palestinians governing Palestine’ and pursuing the two-state solution.”
Beijing’s calculus
As the Gaza conflict nears its two-year mark, China’s regional interests in the Middle East are coming under increasing strain. The war has exacerbated instability and disrupted trade routes for Beijing.
The Red Sea, a critical artery for global trade, has faced significant disruption due to attacks by Iran-backed Houthi militants on commercial shipping vessels, which the group says are in solidarity with Palestinians. In 2024, container vessel traffic dropped by approximately 75% compared with 2023, and these reduced levels have persisted into 2025, according to Project 44.
Egypt’s Suez Canal has seen its transit revenues plummet as well. The roughly 120-mile-long waterway linking the Red Sea to the Mediterranean handles around 10% to 15% of global trade and around 30% of container traffic. It is a key route for China’s westbound trade, accounting for roughly 60% of its exports to Europe in 2023, according to the Middle East Institute.
Houthi attacks have driven up shipping costs dramatically: The price to ship a standard 40-foot container from China to northern Europe jumped from $1,500 to $4,000 between 2023 and 2024, according to Germany's Kiel Institute.
While Chinese ships themselves have remained somewhat insulated — some benefiting from China’s close relationship with Iran, a backer of the Houthis, and with the Houthis reportedly assuring Beijing they would avoid attacking Chinese vessels — many have been forced to divert around South Africa's Cape of Good Hope, adding roughly 11,000 nautical miles and 10 days of travel onto each journey and increasing fuel costs by around $1 million for each voyage.
Container ships are berthed at the port in Lianyungang, in China's eastern Jiangsu province on August 10, 2025. (Photo by STR/AFP via Getty Images)
China’s diplomacy
Given China's economic interests, a ceasefire and hostage-release deal that leads to a general cool-down in the region would likely be welcomed by the country.
Yet the latest ceasefire plan also raises important concerns for China’s diplomatic ambitions.
In July 2024, China hosted a major summit in Beijing, convening 14 Palestinian factions, including Hamas and Fatah. According to the Beijing Declaration published after the meeting, the factions agreed to work toward “a comprehensive Palestinian national unity that includes all Palestinian factions under the PLO [Palestine Liberation Organization] framework, and to commit to the establishment of an independent Palestinian state with Jerusalem as its capital … with the help of Egypt, Algeria, China and Russia.” While Hamas did not formally endorse the PLO, a major rival, it agreed to participate in the outlined unity framework. The declaration also envisioned a temporary national unity government.
By contrast, the Trump ceasefire plan envisions Gaza being temporarily administered by a “technocratic, apolitical Palestinian committee” of local and international specialists, with oversight from a “Board of Peace” chaired by Trump and other foreign leaders until the Palestinian Authority completes reforms.
The plan does not explicitly restore or prioritize the PLO framework or a Palestinian national unity government, nor does it seem to give China any formal supervisory or leadership role.
If the US plan is implemented, China's efforts to assert itself as a key mediator — and counterbalance the United States in the region — may be for naught. The deal shows the enduring nature of US ties not just with Israel but also with the deal's regional backers, including the United Arab Emirates, Saudi Arabia, Qatar, Egypt and Turkey, among others.
Beijing has capitalized on both former President Joe Biden's and President Trump's unwavering support of Israel over Gaza, viewing it as an opening to cast itself as the more balanced mediator and a friend to the Arab world. But with the ceasefire deal and Wednesday's US-Qatar security deal announcement, it is clear that Washington continues to maintain deep structural influence across Arab capitals, undercutting China's attempt to assert itself as a more reliable regional partner.
Photo of the week
China's president, Xi Jinping, offers a toast to guests during a reception at the Great Hall of the People to mark Martyrs' Day, on the eve of China's National Day, in Beijing on Sept. 30, 2025. (Photo by Adek Berry/ AFP)
Deals and visits ✈️
- China, Russia attempt to block reimposition of UN sanctions on Iran
- Chinese solar tech manufacturer to set up 6 GW factory in Saudi Arabia
- Syria's president meets with delegation of Syrian businessmen living in China
- China’s Ori Group establishes $540 million regional HQ in Saudi Arabia
- Chinese on-demand service company launches food delivery arm Keeta in UAE
- China Southern Airlines resumes direct flights from Urumqi to Dubai
- Saudi Arabia holds talks with Chinese auto parts manufacturer Minth Group
- Chinese truck manufacturer Deepway signs distribution agreement with Oman
What we are reading
- China bought $12.6 billion in US soybeans last year. Now, it’s $0.: New York Times
- How long can Nvidia stay ahead of Chinese competition?: Financial Times