Escalation of the American-Iranian Soleimani Stand-Off: the Consequences for China
The American killing of Qassem Soleimani, commander of Iran’s Quds Force, in early January 2020 will have consequences beyond the Middle East. In earlier writings (1. ; 2.; 3.) I emphasized Iran’s centrality in China’s Middle East policy (reflected for instance by its central geographical position in China’s Belt and Road Initiative). In this blogpost I explore what the consequences of an escalation of the American-Iranian stand-off are for Xi Jinping.
My final judgement: #Xi's key interest = de-escalation. Below you find an overview of the gains and losses that escalation has for China:
Upside:
Medium-term: Weakening of primary rival. The U.S. (once again) fights a prolonged, resource exhausting conflict in the Middle-East. (however still unlikely)
Long-term: More narrative power. China’s message in 2020s: ‘U.S. is the trouble-maker of the world.’ China is, however, a ‘responsible stakeholder’. Soleimani killing on Iraqi soil grows China's soft power, because of sharp contrast with its non-intervention pledge(, which is popular with autocrats in the developing world). (very likely)
Downside:
Short-term: Rising cost of energy supply. Spike in oil price, which for China (with ~11.2 million barrels per day this November) being the world’s largest importer of oil by a mile is costly. (already happening)
Medium-term: Increased energy uncertainty. Iranian retaliation against Gulf state oil-tankers (~36% of China’s imported oil comes from Arab Gulf states) endangers an important lifeline of the Chinese economy. Followed by more spikes in oil-prices. (likely)
Long-term: Loss of unique partner in the Middle East. American-led regime change in Iran equals loss of a reliable energy supplier, a safe-haven for Chinese investment and export in the Middle-East (i.e. the only major country in the region that the U.S. cannot coerce to limit relations with China), and key Belt and Road Initiative (BRI) partner. (however still unlikely)