China Backs Iran but With Limits as US Pressure Mounts

China has long been seen as one of Iran's few partners, with the economic heft to blunt US efforts to choke Tehran's economy. Yet even as Beijing condemns the latest pressure campaign by US President Donald Trump, many observers say China is unlikely to go beyond the modest economic links it has forged with Iran.

Analysts note that while China opposes the Trump administration's military strikes and sanctions against Iran, the Beijing-Tehran relationship is just one strand of a foreign policy that seeks to balance ties with many countries, including the US and Gulf states, thereby limiting Beijing's willingness to prop up Iran's leadership at any cost.

"China, with its broader global interests, can only actively push for de-escalation of the US-Iran conflict, and cannot and will not rush into a sharp confrontation with the US for Iran's sake. Ultimately, the US-Iran conflict must be resolved by the two countries themselves," said Hongda Fan, director of the China-Middle East Center at Shaoxing University.

China and Iran share significant trade ties, especially in energy, as well as a mutual suspicion of US dominance. However, the relationship is clearly lopsided, with Tehran far more dependent on Beijing than the reverse.

That asymmetry was on display at the Shanghai Cooperation Organization (SCO) annual meeting earlier this week, where Chinese President Xi Jinping appeared alongside Iranian President Masoud Pezeshkian. While Iranian media reported that Pezeshkian had a "brief meeting" with Xi on the sidelines of the Bishkek, Kyrgyzstan, gathering, Chinese state media made no mention of the encounter.

Shortly after the SCO summit, Xi made his first visit to Egypt in a decade on Tuesday, urging Middle Eastern nations to resist "outside interference" and reiterating calls for a diplomatic solution to the war involving Iran.

As Iran's top trading partner, China has bought up to 90% of Iran's oil exports since the US and Israel launched a military campaign in late February. However, Iranian crude accounts for only about 2% of China's total energy mix.

While oil purchases provide a financial lifeline for Tehran, Chinese buyers are not immune to the risks of US sanctions. Major state-owned refiners such as Sinopec and PetroChina have avoided Iranian crude for years, leaving the trade to independent "teapot" refineries with minimal links to the dollar-based global financial system.

The Trump administration has sanctioned these teapot refiners along with several China- and Hong Kong-based companies and individuals, but has yet to target major Chinese banks allegedly facilitating Iranian oil purchases.

The Trump administration has hinted it could go after China's financial system in a stepped-up sanctions campaign dubbed "Operation Economic Outcast," though analysts doubt Washington would risk antagonizing Beijing as both sides seek to cool a trade war ahead of a planned summit between Trump and Xi on September 24.

"The legitimate question is why third countries are expected to adopt Washington's unilateral economic policy against another sovereign state... That does not mean Beijing will hand Tehran a blank check," said Zichen Wang, deputy secretary-general of the Center for China and Globalization (CCG).

"China is likely to continue to politically oppose US secondary sanctions and defend its legitimate trade interests. But past behavior also shows that major Chinese banks and state-owned companies are very sanctions-savvy," Wang added.

Slogans and reality

Despite growing ties, the China-Iran relationship has long shown a wide gap between rhetoric and reality. China pledged up to $400 billion in investment in Iran over 25 years under a "comprehensive strategic partnership" signed in 2021, but very few projects have materialized as Chinese firms shy away from sanctions risks and Iran's opaque bureaucracy.

In 2023, Iran's then-deputy economy minister Ali Fekri complained that he was "not satisfied" with Chinese investment since the deal, which had totaled only about $185 million.

"Iranian experts often blame their government for not doing enough to attract Chinese investors or push Chinese companies to share more technology. However, the reality is that Chinese companies have no reason to sever ties with the international financial system to expand business in Iran," said Leonardo Bruni, project manager at the ChinaMed Project. "Trade and investment elsewhere are far easier and more profitable. Iran's physical infrastructure and domestic banking are also barriers."

Meanwhile, the most concrete measure of Chinese economic support—its purchases of Iranian oil—is dwindling as the US blocks Iranian ports. Iranian crude exports through the Strait of Hormuz, mostly destined for China, fell from about 1.85 million barrels per day in March-April to just 240,000 barrels per day in August, according to data from ship-tracking platform Kpler, though millions of barrels loaded before the blockade remain at sea.

In an interview with CNBC earlier this week, US Treasury Secretary Scott Bessent said "only" about 30 million barrels of Iranian oil were at sea and that remittances from China to Iran were "about to run dry." Last month, Kpler estimated about 80 million barrels were in transit, enough to sustain Tehran's revenues for up to six months.

"For China, Iran is valuable but replaceable in many respects. Iranian oil is important, but China can get energy from Saudi Arabia, Russia, Iraq, the UAE, and many other suppliers. Iran offers geopolitical access, but China has ties across the region. Iran supports China's multipolar agenda, but so do many other countries," said Mordechai Chaziza, an expert on China's Middle East policy at Ashkelon University in Israel.

China's support for Iran is not without risks, as Beijing maintains important ties with Iran's rivals, including Saudi Arabia and the UAE. "Saudi Arabia and the UAE are major energy and trade partners. The stability of the Gulf is important because China imports about half of its crude oil from the Middle East," Chaziza said.

For Beijing, he said, the "ideal outcome" is a "stable, sovereign, economically connected, and non-Western Iran," not one whose "confrontation with Washington, Israel, or the Gulf states forces China to choose sides."

Wang of CCG argued that while Beijing seems determined to protect commercial interests, it is unlikely to sacrifice broader goals. Beijing's warning that it is ready to take countermeasures against unilateral sanctions "is not the same as promising to underwrite Iran's economy," he said.

Kerri Bitsoff, a former senior official at the US Treasury's Office of Foreign Assets Control (OFAC), said China views Iran more as a client than an ally. "I don't think this is an alliance as some imagine, though there is genuine support. I think it's more of a client relationship that Iran cannot walk away from. That works for China—they have cheap oil, the US is tangled in the Middle East—but it only lasts as long as it doesn't threaten China's other interests," she said.