Ahead of a high-stakes US-China summit planned for September 24 at the White House, Beijing appears to be spotlighting its influence over Iran to gain leverage during negotiations with its chief geopolitical rival.
Expectations for a US-China breakthrough on Iran at the upcoming summit in Washington are low. Trump has signaled a focus on economic outcomes for this meeting with Xi and the Chinese leader has reciprocated by assembling a delegation of top business executives.
But in the run-up to the meeting, Chinese Foreign Minister Wang Yi met his Iranian counterpart Abbas Araghch in Beijing on September 16. The meeting was the fourth time the two men have spoken in the past three months.
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What If China Doesn't Play Ball? US Sanctions Campaign Faces Its Biggest TestDuring their meeting, Wang noted that Beijing and Tehran are “comprehensive strategic partners,” an asymmetric relationship that favors Beijing.
China is Iran's largest trading partner and the destination for over 80 percent of its seaborne oil exports, according to commodities analytics firm Kpler. Yet Iran accounts for just 1 percent of China’s overall global trade, per Chinese government data.
China, Wang said, “is also willing to strengthen dialogue and cooperation with Iran and safeguard Iran's legitimate rights and interests.”
The Chinese foreign minister urged “all parties” to take measures to swiftly “reopen” the Strait of Hormuz -- a waterway that before the US-Iran war was the route for about one-fifth of the global oil and gas supply -- but stopped short of directly pressuring Iran.
Nor did he offer a concrete mediation plan.
“China isn’t going to do the heavy lifting” to bring the US and Iran to the table again, Elizabeth Freund Larus, an adjunct senior fellow at the Pacific Forum think tank, told RFE/RL.
She noted that China benefits geopolitically from the conflict’s toll on US military resources even though Beijing faces economic pressure from higher energy and raw material costs.
The Iran war has cost the Pentagon more than $38 billion through August 1, according to the Congressional Budget Office.
Further, in recent months, Washington has diverted significant military assets from the Indo-Pacific region to the Middle East. The United States now lacks a deployed aircraft carrier in the Western Pacific for the first time since World War II, unnerving American allies wary of China’s massive military buildup.
At the same time, Beijing faces surging oil prices. Shanghai crude oil futures hit a record 929.4 yuan ($137.80) per barrel this month after Iranian-backed proxies launched drone attacks that damaged Saudi Arabia's East-West pipeline.
To a certain extent, China’s strategic stockpiling of oil helps insulate it from price increases.
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US Lawmakers Examine Growing Russia, China Ties To Iran-Backed HouthisThe U.S. Energy Information Administration (EIA) estimates that Beijing injected an average of 1.1 million barrels a day into its national oil storage last year, which gave it a total of 1.4 million barrels as of December 2025. That’s three times the size of America’s Strategic Petroleum Reserve.
Still, the buffer provided by the reserve only goes so far.
Bill Bishop, a Washington-based China expert and commentator, noted in the September 16 edition of his Sinocism newsletter that the “global economic impact of another huge petrochemical price surge would damage the export markets the PRC economy needs.”
“China for sure wants the war to end -- a higher oil price is in no one’s interest, but the question is who should bear the cost to bring it to an end?” Yun Sun, director of the Stimson Center’s China Program in Washington, said in an interview.
“If China is to press Iran, it will beg the question as for what the US and Iran will do to de-escalate and stabilize, and meet Iran’s need for security. So far, the content on that is pretty thin.”
Aiding Iran’s War Effort
While China is officially neutral in the Iran war, it has provided significant support to Tehran.
Crucially, Beijing’s purchase of Tehran’s oil in large quantities has extended an economic lifeline to the beleaguered Iranian regime. To circumvent punishing US sanctions, China uses a covert, barter-like trade mechanism, according to Reuters. Since transactions do not travel through the Western-dominated global financial system, they evade US oversight.
The Trump administration has repeatedly pressed China to cooperate with sanctions on Iran. After the administration intensified those sanctions in late August, Treasury Secretary Scott Bessent warned that those who “enable” Tehran should not “discount the cost of testing Washington.”
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The US has several options to compel better Chinese cooperation on Iran sanctions.
The first is blacklisting independent Chinese oil refineries that have purchased Iranian oil in large quantities. Thus far, it has sanctioned five such firms. Washington has also sanctioned dozens of China-linked shipping firms and vessels for maritime trade with Iran.
These measures have caused substantial commercial obstacles and compliance pressure.
However, Iran and its Chinese buyers can evade the sanctions. Tehran uses a so-called “shadow fleet” of old oil tankers and shell companies that covertly exports petroleum. Beijing has also ordered its companies not to comply with the US sanctions.
Washington, however, has a more substantial economic weapon in its arsenal: its dominance of the global financial system. The Trump administration could ban sanction-busting Chinese state banks from using the dollar. That move would have a devastating effect on China’s economy.
Yet given the substantial US-China economic relationship, “the broad imposition of sanctions on China’s financial institutions could be very disruptive to the US economy too,” Taipei-based lawyer and political risk consultant Ross Darrell Feingold said in an interview.
At the same time, US financial firms operating in China would likely be subject to severe Chinese retaliation.
In the event the Trump administration is seriously considering sanctions on large Chinese banks, “these financial institutions will make their concerns known to the White House,” he says.
Part of Beijing’s rationale for defying sanctions rests on its interpretation of international law. “There is no UN sanction against normal trade between China and Iran,” the Stimson Center’s Sun says, adding, “And China does not accept the legality of US unilateral sanctions.”
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'Shanghai' Grouping At 25: Rifts, Rivalries, And A Show Of UnityFor Washington, one of the most concerning aspects of China’s pro-Iran stance is that it extends to the military domain.
“China plays a critical but often overlooked role in sustaining Iran's defense industrial base,” US-China Economic and Security Review Commission Vice Chair Mike Kuiken said in a July statement. That role includes providing components for Iranian Shahed drones and ballistic missiles as well as sodium perchlorate, a chemical needed for rocket fuel. Tehran uses China's BeiDou satellite navigation system to direct military operations.
Beijing denies supporting Iran militarily or providing it with intelligence.
China’s approach to supplying dual-use equipment (which has both commercial and military applications) to Iran as well as Iranian access to Chinese satellite navigation technology “is shaped by a tension between Beijing's interest in supporting Iranian capabilities in key areas and its desire to minimize potential blowback,” John Van Oudenaren, a research analyst for the technology consultancy BluePath Labs in Washington, told RFE/RL.
China is wary of risking additional major US sanctions on Chinese entities or a deterioration in relations with Washington and its allies, he added.
Continued Stalemate
In recent weeks, Trump has downplayed Beijing’s close ties with Tehran, telling reporters at the White House on September 4 that “they’re [China] not really involved” in the Iran war. Trump has previously said Xi promised him that China wouldn’t provide Iran with military equipment.
"Maybe they [Trump and Xi] will have a quiet discussion about the value of sanctions” when they meet, Carice Witte, an Israel-based China expert and executive director at the SIGNAL Group think tank, told RFE/RL.
At a September 17 Hudson Institute event in Washington, Nick Snyder, a nonresident senior fellow at the think tank and former senior State Department official, said that “the Chinese want to have their cake and eat it too” in the Middle East by maintaining Iran as a client state while having good ties with Gulf countries.
That strategy is becoming untenable as the war drags on, he said.
For Beijing “ending the war is not worth supporting a US position,” Witte says. “China’s larger goal is to distance itself from the US and discredit the US.”