With the Pentagon reportedly weighing an analysis that China has made dramatic geopolitical gains due to the Iran War, President Donald Trump and Chinese leader Xi Jinping have verbally agreed that the Islamic Republic should not control the Strait of Hormuz or develop a nuclear weapon. As the two sides meet in Beijing, Middle East Policy provides incisive examinations of the superpower rivalry in the region, the diversification of Chinese engagement beyond economics and finance, and the increasingly Eastern orientations of key regional states.
In addition to the studies featured in this article, you can find more pieces in our special issue on the US-China rivalry in the region. Middle East Policy has also released its 167th issue, with analyses of testimony from Palestinian women jailed by Israel, the unresolved question of sovereignty in Jerusalem, and shifting relations between Turkey and the Gulf powers. And readers can still access our free special issue, Washington’s War on Iran, featuring 14 examinations of the conflict. You can register to receive our weekly updates here. And please follow us on the social media platforms X and LinkedIn.
Middle East Policy’s offerings on the US-China rivalry show that the East Asian giant initially forged economic relations with the region due to its thirst for fossil fuels. For example, Beijing invested immense amounts in Middle Eastern states as part of its Belt and Road Initiative—including billions planned for infrastructure in Qatar. But the commercial relations quickly deepened. As Jon Alterman enumerated during a symposium organized by the Middle East Policy Council:
In 2000, Chinese-Saudi bilateral trade was about $3 billion, dominated by crude oil. By 2010, it had grown to $41.6 billion. In 2019, it was $72.3 billion. China is Saudi Arabia’s largest trading partner. It is the GCC’s largest trading partner, with more than $180 billion in trade a year. And China displaced the European Union as the GCC’s largest trading partner in 2020. Sixty percent of Chinese trade to Africa and Europe passes through the UAE, mostly through Dubai.
Camille Lons added some specifics in her remarks at that event:
What is the most striking is how the relationship has diversified rapidly…to go beyond the traditional buyer-seller energy relationship. We’re seeing cooperation in a wide range of sectors, in infrastructure, with the development of ports and industrial complexes. We’ve seen cooperation on digital infrastructures and emerging technologies, on 5G, on artificial intelligence projects.
Lons noted that some of these projects can be used not just for development but for surveillance, which may be of mutual interest to the parties.
As two new analyses in Middle East Policy show, Beijing’s wielding of soft power has gone beyond economics: It has provided infrastructure crucial for moving pilgrims through Saudi Arabia during the hajj, and Arab scientists “have established extensive relations with China in fields like chemistry, engineering, agriculture, and medicine, as well as emerging areas like computer science, environmental science, green finance, sustainable development, and technological innovation.” The Chinese have also increased their appeal to regional states by exporting technology for nuclear energy.
As these regional relationships developed, China was able to challenge some aspects of US power. It developed a system to import oil from Iran in defiance of Western sanctions, and it introduced a benchmark for crude-oil-futures contracts on the Shanghai Futures Exchange. “By making it possible to trade oil without the need for dollars, the new indices could weaken dollar-based embargo mechanisms, strengthening countries that oppose American hegemony,” Yossi Mann and Roie Yellinek observe. “The prospects for this outcome were bolstered by the return of US sanctions on Iran in 2018, following Trump’s withdrawal from the nuclear agreement, by creating support for the new index and pushing Iranians to start trading oil through the yuan.”
While this has not come to pass, Chinese financing and investment in the Middle East has been seen as a threat to American interests. However, Rachel Moreland observes, the two superpowers share much in common in the region:
Despite their strategic rivalry, Washington and Beijing share interests that are largely compatible: containing Iran’s nuclear capabilities and deterring its aggression, countering terrorism and piracy, ensuring the flow of oil supplies, and advancing economic and investment opportunities with Gulf allies to promote greater security and prosperity in the region. Neither party benefits from a Middle East made increasingly unstable by Iranian activities, especially China, whose economy depends on energy from the Gulf.
Still, these mutual interests could be challenged. For instance, Beijing has shifted its economic relations with Saudi Arabia toward massive investments in the defense sector that could eventually make the kingdom less dependent on the United States. Combined with the fallout from the Iran War, this may throw American regional strategy into question.
As China deepened its engagement with the region beyond energy and infrastructure, a range of articles in Middle East Policy show, many Middle Eastern governments increasingly viewed relations with Beijing as a means of balancing between the competing superpowers to expand their strategic options. The United Arab Emirates has been hedging between Washington and Beijing in order to maximize its security and economic interests, and Iran has pinned its hopes on China’s rise in order to further multipolarity and dramatically improve its economic fortunes.
Despite the rivalry and the hopes of many regional states to extract concessions by positioning themselves between competing superpowers, many analyses show that China and the United States have a number of interests in common. “Both want a stable region that supports their strategic and economic concerns,” Jonathan Fulton asserts. “Given their deep cooperation with the Gulf monarchies and China’s influence in Iran, there is an opening for Washington and Beijing to coordinate their policies.”
But if China wants to open the Strait of Hormuz and prevent Tehran from developing a nuclear weapon, it is not clear whether this can be achieved solely through its typical approach: reliance on diplomacy, as well as free riding on an American military posture that has allowed Beijing the security necessary for its regional investments to thrive. “As the current violence in the Middle East has no end in sight,” write Christopher K. Colley and Joshua R. Goodman, “the possibility of Chinese interests coming under direct attack will only increase, thus testing Beijing’s political and military capacity to respond.”
You can find other analyses in our spring issue, in our free special issue, Washington’s War on Iran, and in The Israel-Iran War, our coverage of the 2025 campaign against the Islamic Republic’s nuclear program. And check out the Middle East Policy Council’s website for insights from its fellows.
Middle East Policy, Spring 2026
JUSTICE IN PALESTINE
‘I Thought I Would Die’:
Testimony from Palestinian Women Jailed by Israel
Oqab Jabali | Saqer Jabali—free to read!
Jerusalem and the Unresolved Question of Sovereignty
Havva Yavuz
AMMAN’S BALANCING ACT
Jordan’s Role in Establishing a Sunni-Israeli Alliance Against Iran
Ronen Yitzhak—free to read!
Jordan’s Stability and Regime Survival amid the War on Palestinians
Nur Köprülü | Fadi Al-Ghrouf
Explaining the Post-October 7 Durability of Israel’s Peace Deals with Egypt and Jordan
Chen Kertcher | Carmela Lutmar—open access!
ANKARA’S AMBITIONS
Regime Change in Syria and the Emerging Israel-Turkey Conflict
Mehmet Doğan Üçok
Geopolitics and Aspirations for Sustainability: Turkey’s Emergence as an Energy Hub
Umud Shokri—open access!
Ottoman Coup Traditions and the Republican Army’s Legacy
Sertif Demir | Yaşar Ertürk
TURKEY-GULF RELATIONS
Geopolitical Rebranding of the ‘New Syria’ amid the Turkey-Gulf Rapprochement
Hae Won Jeong
Turkey’s Relations with Gulf States: Temporary Shift or Permanent Alignment?
Engin Koç
BOOK REVIEW
Gülistan Gürbey et al., Between Diplomacy and Non-Diplomacy: Foreign Relations of Kurdistan-Iraq and Palestine
Reviewed by Hogr Tarkhani
Daniel Drewski and Jürgen Gerhards, Framing Refugees: How the Admission of Refugees is Debated in Six Countries across the World
Reviewed by Emrah Atar
Peter Beinart, Being Jewish After the Destruction of Gaza: A Reckoning; and Omar El Akkad, One Day, Everyone Will Have Always Been Against This
Reviewed by A.R. Joyce