China hedges as US–Iran truce stalls
China is bracing for two possible paths: negotiated de-escalation or a prolonged conflict where energy access grows more politicized and costly.
Leading this week
Chinese Foreign Minister Wang Yi urged Iran to return to negotiations on Tuesday, calling on the sides to “seize all opportunities” to start peace talks “as soon as possible,” according to a readout of a call with Iranian Foreign Minister Abbas Araghchi.
“Talking is always better than fighting,” Wang told Araghchi as reports circulated of renewed diplomatic proposals and backchannel efforts to de-escalate the conflict.
Iran has not fully closed the door to diplomacy. On Thursday, Pakistani Foreign Minister Ishaq Dar said, “US-Iran indirect talks are taking place through messages being relayed by Pakistan,” adding, “In this context, the United States has shared 15 points, being deliberated upon by Iran.” On Wednesday, however, Iran’s Press TV reported that Iran had “responded negatively” to the American proposal.
Oman and Qatar have historically played similar roles in US-Iran diplomacy, but Pakistan’s involvement marks a shift.
A close partner of China and a vital node in Beijing’s Belt and Road Initiative — particularly with the China-Pakistan Economic Corridor project — Islamabad maintains relations with both Tehran and Washington, allowing it to serve as a go-between. Notably, however, Pakistan has no formal diplomatic relations with and does not recognize Israel, throwing into doubt its ability to be an intermediary for all parties.
Pakistan’s involvement offers China visibility into the negotiations without requiring Beijing to assume the political risk of leading mediation itself, as we are already seeing. On Thursday, Pakistani Prime Minister Shehbaz Sharif met with Chinese Ambassador Jiang Zaidong to discuss the situation in the Middle East and Pakistan's de-escalation efforts, according to a readout from Sharif’s office.
Indian vessel 'Nanda Devi' carrying liquefied petroleum gas arrives at Vadinar Port in the Jamnagar district of Gujarat state on March 17, 2026 after Iran allowed it to pass through the Strait of Hormuz. (AFP via Getty Images)
Hedging
While China is likely to embrace Pakistan's role in the talks, it is also preparing for the possibility that talks may not succeed.
On Wednesday, in an interview with Iranian state TV, Araghchi said, “We permitted passage through the Strait of Hormuz for friendly nations including China, Russia, India, Iraq and Pakistan.”
On Monday, shipping analysis site Lloyd’s List reported that a Chinese-owned container ship became the first vessel with confirmed mainland Chinese ownership to pay Iran for passage through the Strait of Hormuz, transiting via a shipping corridor near Larak Island last weekend. Iranian lawmaker Alaeddin Boroujerdi said on state TV that transit fees were being collected to cover “war costs.”
China is preparing for two outcomes at once: a negotiated de-escalation or a prolonged conflict in which access to energy flows becomes increasingly politicized or expensive.
Photo of the week
Muslim devotees offer prayers during Eid Al-Fitr, which marks the end of the Islamic holy fasting month of Ramadan, at a mosque in Beijing on March 21, 2026. (Adek Beryy/AFP via Getty Images)
Deals and visits ✈️
- Chinese MidEast envoy holds meeting with GCC diplomats in Beijing
- Egypt’s industry minister holds talks with delegation from China’s Baowu Steel Group
- Chinese foreign minister holds phone calls with Turkish, Egyptian counterparts
- Chinese foreign minister meets Director General of the International Atomic Energy Agency Rafael Grossi
- Iran says it will grant safe passage through Strait of Hormuz to China
- Chinese vice foreign minister meets with Libyan GNU special envoy
What we are reading
- China’s new master plan for its tech economy in 2030 and beyond (The Economist)
- The rise of China’s hottest new commodity: AI tokens (Financial Times)