MAY 12 — China may project confidence through military modernization, technological breakthroughs and resilient export performance.
Yet beneath this image of strategic steadiness lies a quieter and more urgent reality: Beijing wants the war in West Asia to end as quickly as possible.
This is not because China lacks strategic patience. Nor is it because Beijing suddenly fears geopolitical competition.
Rather, the Chinese leadership understands that prolonged instability in West Asia threatens the very foundations of China’s economic recovery.
The Chinese economy is already under pressure from slower growth, rising unemployment, weak domestic consumption and the lingering aftershocks of the property crisis.
The ongoing conflict involving Iran, Israel and the United States has introduced a fresh layer of uncertainty that Beijing can ill afford.
China remains the world’s largest manufacturing power. It is still heavily dependent on imported energy, petrochemicals and maritime trade routes that pass through vulnerable chokepoints such as the Strait of Hormuz and Bab el-Mandeb.
As oil prices climb, the effects spread far beyond gasoline.
Petrochemicals form the backbone of countless industrial products: plastics, textiles, packaging materials, electronics, industrial fibres, fertilisers and even pharmaceutical components. Rising energy prices therefore raise the cost of manufacturing almost everything.
For some Chinese producers, especially in chemicals and plastics, costs have reportedly risen by as much as 20 per cent.
This matters immensely because China’s growth model still depends heavily on exports.
While Chinese exports unexpectedly surged in April 2026 due to overseas stockpiling amid fears of worsening conflict, this may prove temporary rather than sustainable.
Many foreign firms are rushing to secure components before supply chains deteriorate further. Such panic buying can temporarily inflate export numbers, but it does not represent healthy long-term demand.
Indeed, economists increasingly warn that if the war drags on, higher transport and fuel costs could eventually suppress global consumption itself.
This is the contradiction confronting China today.
In the short term, geopolitical instability can increase demand for Chinese industrial goods because companies worldwide rush to build inventories.
But in the medium and long term, prolonged instability threatens the purchasing power of China’s trading partners and weakens the global economy upon which Chinese exports depend.
China therefore finds itself trapped between temporary export resilience and long-term structural vulnerability.
The domestic dimension is even more serious.
Youth unemployment remains elevated. Consumer confidence remains weak. The property market has not fully recovered. Industrial overcapacity continues to trouble Beijing’s economic planners.
President Xi Jinping’s government has invested heavily in strategic sectors such as robotics, semiconductors, electric vehicles and artificial intelligence.
Yet these sectors do not generate employment at the same scale as construction, manufacturing and consumer industries once did. China is therefore facing a dangerous imbalance.
The country is technologically stronger than ever before. Militarily, it is more capable than at any time since 1949. Yet economically, ordinary Chinese households are becoming increasingly cautious.
This explains why Beijing’s diplomacy on West Asia has become more active, even if often understated.
China understands that a prolonged war threatens not only global stability but also the continuity of the Belt and Road Initiative itself.
Trade corridors stretching across West Asia, Central Asia and maritime Southeast Asia all become more vulnerable under conditions of sustained conflict.
Equally important, China knows that rising oil prices fuel inflationary pressures globally.
Europe is already witnessing a new inflationary shock linked to energy and transport disruptions arising from the conflict. The same applies to East Asia.
Countries such as Japan, South Korea and Asean member states remain deeply dependent on Middle Eastern energy supplies. China, despite its diversification efforts and investments in renewable energy, cannot escape this reality either.
This is why Beijing increasingly speaks the language of stability, ceasefire and multilateralism.
Predictability allows supply chains to function.
Predictability keeps shipping insurance manageable.
Predictability prevents panic stockpiling.
Predictability supports domestic confidence.
Above all, predictability enables China to continue managing its difficult economic transition without additional geopolitical shocks.
This also explains why Beijing is unlikely to encourage any direct confrontation with Washington at this stage, despite strategic rivalry remaining intense.
The anticipated meeting between President Donald Trump and President Xi Jinping this week is therefore more than symbolic.
Both sides understand that a complete collapse in Sino-American communication would deepen market uncertainty at a moment when the world economy is already fragile.
China’s leaders are acutely aware that the country may be entering a period of structurally slower growth.
The era of double-digit expansion is over.
Demographic decline, an ageing population, technological disruption and geopolitical fragmentation are now reshaping China’s long-term trajectory.
In such conditions, external instability becomes even more dangerous.
This is why China’s show of military confidence should not be misunderstood as enthusiasm for endless conflict.
Beijing’s strategic calculus is far more pragmatic.
China wants energy flows restored. It wants shipping lanes secured. But as and when it wants the Straits of Malacca to be secured, China is potentially accused of showing signs of hegemonic behaviour. Why ?
That’s because the problem between China and other claimants in South China Sea has introduced a layer of complication on how China’s maritime behaviour is deduced ie it is not following rules of laws. Although countries such as Vietnam do get away with equally egregious transgressions in Spratly’s and the Paracels Islands too.
At any rate, the real China wants global inflation stabilised. So that the world is stable enough to absorb its exports. Without which China’s markets cannot be preserved. What more, often against the rich vein of accusations—fair or otherwise—that China is dumping its excess capacity.
China, which borders some 16 countries, many of which intimidated by its science and size, does want enough geopolitical calm to manage its own difficult domestic transition. But Beijing’s Wolf Warrior Diplomacy at one stage has spooked quite a few countries even when China is trying to U Turn from that hyper assertive streak.
For Asean, this reality carries important implications. Southeast Asia must recognise that China’s current diplomatic posture is increasingly shaped not merely by ideology or strategic ambition, but also by economic necessity. Just as importantly by geo political tensions.
While commerce is the lifeline of China especially on a scale that is tough and demanding, it too has to function in a geopolitically challenging environment.
Every year 14 Million graduates need to find a job upon graduation. An annual growth rate of 6.5 per cent is deemed an absolute minimum to ensure this employment threshold. But a weakened global economy, wrecked by wars and brittle cease fire, benefits nobody.
Certainly not China let alone Asean, all of which are trading nations.
And most definitely not a world already struggling to restore coherence to an increasingly fragmented international order. It is in this context one has to understand China’s many domestic and external struggles.
* Phar Kim Beng is a professor of Asean Studies and director, Institute of Internationalisation and Asean Studies, International Islamic University of Malaysia.
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
