Hidden power play: How China profits from the US-Iran war | DW News

Key Concepts

• Geopolitical Hedging: The strategy of smaller nations maintaining ties with China as an alternative to US dominance.
• Dual-Use Technology: Technologies (like AI-optimized targeting and drone components) that have both civilian and military applications.
• Choke Points: Strategic geographic or economic bottlenecks (e.g., the Strait of Hormuz, rare earth mineral supply chains) used as leverage in international relations.
• Multilateralism (Chinese-style): China’s rhetoric of supporting UN-led diplomacy while selectively adhering to international law only when it aligns with national interests.
• Technological Sovereignty: China’s push for self-reliance in critical sectors (semiconductors, AI, renewables) to bypass Western sanctions and influence.

1. China’s Strategic Positioning in the US-Iran Conflict

China is leveraging the US-Iran conflict to position itself as a "hidden winner" and a responsible mediator.

• Mediation Rhetoric: President Xi Jinping has proposed a "five-point proposal" for peace, emphasizing diplomatic solutions. Experts note this is a calculated move to present China as a stable, rule-abiding alternative to the US, while avoiding the "messy" military entanglements that have historically plagued US Middle East policy.
• The "Law of the Jungle" Narrative: China frequently criticizes US actions (without naming the US directly) by invoking the "law of the jungle," framing the US as a destabilizing force while positioning Beijing as a champion of the UN system and multilateralism.
• Economic Support: Despite claims of neutrality, reports indicate China remains a primary buyer of Iranian oil (often via "shadow" shipping) and provides critical technological and material support to the Iranian regime.

2. Military and Strategic Insights

The conflict serves as a real-world laboratory for China to observe US military capabilities and limitations.

• Warfare Evolution: The conflict has highlighted the shift toward "drone-driven" warfare. China is observing how US-backed systems in the Gulf struggle against low-cost, high-impact drone technology.
• Taiwan Implications: Insights gained from the Gulf conflict are being integrated into China’s military planning for Taiwan. The perceived inability of the US to protect its Gulf allies sends a signal to Asian nations that US security guarantees may be unreliable.
• Technological Integration: China is reportedly supporting Iran with the Beidou satellite navigation system and AI-optimized target acquisition, testing these systems in active conflict zones.

3. Technological Dominance and the "Race for the Future"

China is aggressively transitioning from a manufacturing hub to a high-tech superpower.

• Sector Dominance: Studies show China leads in 57 of 64 critical technology sectors. It has achieved near-parity with the US in AI and is leading in high-tech materials and renewable energy supply chains (controlling ~70% of solar, wind, and battery production).
• State-Led Investment: A $140 billion sovereign wealth fund is specifically targeting the semiconductor industry. Unlike the Western model of corporate-led innovation, China utilizes a "top-down" system that integrates AI, robotics, and industrial production into a cohesive national strategy.
• Technological Autonomy: China is increasingly pursuing "independent" development to insulate itself from US-led blockades, exemplified by its rapid advancements in robotics and brain-computer interfaces.

4. Economic Challenges and Internal Contradictions

Despite its global rise, China faces significant domestic hurdles that threaten its long-term stability.

• The Consumption Trap: China’s economy relies heavily on exports, but domestic consumption remains weak. Citizens, lacking a robust social safety net, prioritize saving over spending.
• Structural Limitations: Experts argue that for China to transition to a consumer-driven economy, the Communist Party would need to relinquish significant control (e.g., land ownership rights, welfare expansion), which the current leadership is unwilling to do.
• Economic Risks: The real estate crisis and record-high youth unemployment are creating a sense of pessimism among the Chinese public, contrasting sharply with the state’s narrative of national rejuvenation.

5. Key Arguments and Perspectives

• The "Trump Factor": Guests noted that the unpredictability of the Trump administration has made it difficult for traditional allies to coordinate, inadvertently creating a power vacuum that China is filling.
• Soft Power Limitations: While China is gaining influence in the "Global South" by offering an alternative to US hegemony, its soft power remains weak in Europe and the West due to human rights concerns and lack of transparency.
• The "No Winner" Perspective: Angela Kukritz argued that while China gains strategic advantages, it also faces risks, such as energy price volatility and the potential for the conflict to distract from its own economic growth targets.

Synthesis/Conclusion

China is successfully utilizing the US-Iran conflict to expand its geopolitical influence and test military technologies, all while positioning itself as a calm, mediating power. However, this external success is shadowed by internal economic fragility. China’s rise is not merely a result of its own strength, but also a reaction to the perceived decline in US credibility and the strategic errors of Western policy. Ultimately, China is playing a long-term game, betting that its technological self-reliance and ability to offer an alternative to US-led global order will eventually secure its position as the world's leading power.