Welcome to Foreign Policy’s China Brief.
The highlights this week: China responds to U.S. strikes on Iran, the Taiwanese president embarks on a controversial speaking tour, and a serial rapist’s U.K. sentence draws widespread attention in China.
China Reacts to Middle East Conflict
Unsurprisingly, China condemned the U.S. attack on Iran over the weekend, following its similar condemnations of Israel last week. China has expressed support for a “genuine cease-fire” between Iran and Israel, but the chances of China providing Iran with major assistance are small.
The ongoing conflict has made for some strange attempts at U.S.-China diplomacy. U.S. Secretary of State Marco Rubio publicly asked Beijing to pressure Tehran not to close the Strait of Hormuz on Sunday. Keeping the strait open is in China’s best interest: It is a major buyer of Iranian oil, and around 50 percent of its total oil supply passes through the strait.
After announcing that a cease-fire had been reached on Monday, U.S. President Donald Trump boasted that it was his “Great Honor” to help facilitate continued oil sales from Iran to China and expressed a desire for China to buy “plenty” of oil from the United States, too.
The broader China-Iran relationship is built on mutual pragmatism and revisionist sentiments about the global order, mixed with a shared paranoia about U.S. power. The relationship is reinforced by frequent exchange visits by high-ranking officials and military personnel. Together, this has produced a surprisingly strong alliance.
Still, Iran is still relatively marginal to Chinese strategy. Neighbors such as Cambodia and Myanmar are more critical to China, in part because Beijing anticipates having to compete with Washington for primacy in the region. Though China has taken tentative steps toward establishing a global strategic presence, these efforts are minor compared with the amount of time and money it has poured into areas closer to home.
Sacrificing Iranian interests may also benefit China in the long run. The United States returning to the mire of Middle East geopolitics has been good for China in the past. The ur-example of this is the 2003 U.S. invasion of Iraq. Until September 2001, the early Bush administration was focused on the strategic challenge posed by China, especially after a midair collision forced down a U.S. spy plane in Hainan.
In the 2010s, Chinese scholars and strategists repeatedly told me that the U.S. war on terrorism had “bought China a decade” thanks to Washington devoting its attention and resources to the Middle East and Afghanistan.
Because the war on terrorism shaped the career choices of many U.S. experts, it also created the more subtle structural effect of U.S. institutions having significant Middle East expertise but being relatively weak on China. This is one of the factors that keeps Washington (and U.S. media outlets) turning back to the Middle East despite U.S. strategic interests there shrinking.
Under U.S. President Barack Obama, China had lower priority than other foreign-policy ambitions, including the nuclear deal with Iran and the rise of the Islamic State in the Middle East. The first Trump administration largely avoided Middle East conflicts, which was one reason that China hawks rose to greater prominence in U.S. policy circles. (It also helped that by then the United States had reduced its need for Gulf oil.)
But Hamas’s Oct. 7, 2023, attack on Israel pulled the United States back into the region, and today, Trump’s conflict with Iran threatens to do the same. China seems willing to accept some damage to a distant ally so long as the United States keeps pulling resources from East Asia to support Israel’s wars.
Beijing is happy to let Washington be a power broker in the Middle East so that it can challenge Washington in the spaces that matter more to it.
What We’re Following
Taiwan rhetoric. China reacted angrily after Taiwanese President Lai Ching-te said on Sunday that Taiwan was “of course a country” at his first stop on a nationwide speaking tour. Lai has been an outspoken advocate of Taiwanese independence, though he slightly modulated his tone after taking office last year.
A Chinese spokesperson derided Lai’s speeches as full of “lies, deception, hostility, and provocation.” China will likely respond with some display of force; it has already upped its intrusions into Taiwanese waters and airspace so far this year.
Serial rape case. Last week, a serial rapist and Chinese national was given a life sentence in the United Kingdom. Zou Zhenhao, a 28-year-old graduate student, was convicted of raping 10 women, seven of them in China, in 11 counts but is believed to have many more victims.
The case was heavily discussed on the popular app RedNote but also drew the attention of internet censors. It’s possible that this is because Zou comes from a well-off family in Guangdong but more likely that the authorities are concerned about the perception that the British police caught a criminal that the Chinese police missed.
FP’s Most Read This Week
- The Many Ways U.S. Involvement in the War on Iran Could Go Badly by Howard W. French
- Israel Can’t Be a Hegemon by Stephen M. Walt
- China Backs Iran in Fight Against Israel by James Palmer
Tech and Business
Local bonds. Beijing has become the first local government in China to use special-purpose bonds to support a general government investment fund. Previously, such bonds could only be issued for specific infrastructure projects under rules introduced in 2019. Other regions are experimenting with using such bonds to pay off existing debts or meet payroll and pension obligations.
Changing the way local government is financed has become a priority since the collapse of the Chinese real estate bubble because local governments previously depended on the revenue generated from land sales to real estate developers.
Special-purpose bonds, introduced in 2015, are a potentially powerful tool but have also risked worsening local government leaders’ focus on big projects over growing household consumption.
Car fraud. A bizarre trend in so-called zero-mileage used cars has emerged in China, Reuters reports, where companies—with the complicity of local governments—sell new cars to exporters as “used” that are then sold abroad. This makes it easier to get export licenses. It also allows companies to report more sales and local governments to mark the sale as twice its value in GDP—once for the sale to the exporter and once for the sale overseas.
The Chinese car industry is both highly innovative and massively overproducing; electric vehicle firms have been locked in a bitter price war for years and are often selling at a loss. Driving up sales is sometimes more important to companies than making a profit, since the winners of the price war will end up as government favorites.
But there have been calls for a truce in the price war by manufacturers, and authorities are increasingly concerned that quality is suffering.
The post A Distracted Washington Is a Win for Beijing appeared first on Foreign Policy.
