China In The Crossfire As US Widens Economic Warfare On Iran

Reactions among Chinese commentators have been mixed. Some say the indirect fallout on China should not be underestimated.

“What Chinese readers really need to pay attention to in this round of US sanctions on Iran is not just whether Tehran can hold on, but that Washington has widened its target from Iran itself to outside players with energy, shipping or financial ties to the country,” says a Liaoning-based columnist using the pen name“Ciyuanjun.”“China has been pulled directly into that expanded campaign.”

“This should not be read simply as a financial contest between the United States and Iran,” she says.“If Washington keeps expanding secondary sanctions, Chinese refining, shipping and trade-finance firms linked to Iran will face growing uncertainty.”

She says the US Treasury had already targeted China's independent refiners and several mainland and Hong Kong firms in previous rounds, and that the latest list added more Chinese shipping and business entities. She says China has been dragged into the fallout, although ordinary Chinese workers are not seeing their wages drop right away.

She adds that if Washington widens sanctions further while the Strait of Hormuz stays high-risk, elevated energy costs would squeeze China's corporate profits and gradually erode household purchasing power as the effects ripple through shipping, feedstock and consumer prices.

“The negative spillover from US policy is undeniable, and it is already a reality,” says Tinglan, a columnist with Zhouji Kuaibao, an online outlet.“Data show that China has long been a major buyer of crude oil from the region. If Washington imposes secondary sanctions indiscriminately on normal international energy trade, it will inevitably hurt China and shake the stability of the global energy market.”

She says Washington has used various pretexts to unfairly target Chinese companies, and that Beijing could push back in several ways:

Chinese rules blocking foreign laws' extraterritorial reach are now actively enforced, barring domestic firms and banks from complying with unilateral US sanctions; Beijing calls its trade with Iran normal commerce between sovereign states, and rejects Washington's long-arm jurisdiction as a breach of the UN Charter; As a top trading nation and supply-chain hub, China could respond with proportionate or sharper countermeasures, while US inflation and looming elections limit Washington's appetite for a full break; Iran is likely to retaliate more forcefully, damaging US facilities in the Middle East.

Since the US and Israel launched their military campaign against Iran on February 28, Washington has steadily tightened sanctions on the Chinese networks that keep Iranian oil flowing, targeting small independent refiners known as teapots and the shadow fleet of tankers that supplies them.

Many sanctioned teapots have struggled to keep running. Port operators in Shandong have turned away tankers carrying their crude, banks have cut off financing for oil purchases and gasoline exports from one loading hub have dried up since late March, pushing local fuel prices higher. Still, the broader Chinese economy has so far absorbed the shock with little strain.

Bessent also said Monday that a major financial institution would be sanctioned within the week, though he declined to name it or say which country it was based in. Asked whether Chinese banks financing Iranian oil could be next, he said no one was beyond the reach of US sanctions.

Yet even as Washington escalates its threats, the war feeds directly into Beijing's dilemma. Some Chinese commentators see a prolonged, grinding conflict in the Middle East as serving China's broad strategic interests, steadily draining the weapons, money and attention Washington would otherwise direct toward the Indo-Pacific.

“The US attack on Iran may have unintentionally strengthened China's own security,” says a Qinghai-based writer using the pseudonym Time Brewery.“Intercepting one Patriot missile costs US$4 million, while the drone flying at it might cost only tens of thousands, and the more the Pentagon runs that math, the more alarming it looks.”

He says war games point to a stark cost mismatch, with a five-month campaign burning through more than 1,500 interceptors, faster than factories can replace them, while swarms of cheap drones eventually overwhelm even advanced air defenses and leave several US bases in the Middle East damaged in the simulations. The writer calls it a math problem, not a military one, that the US cannot solve.

The writer says that American think tanks have reportedly modeled a bigger Western Pacific conflict and found current US stocks of precision-guided weapons might not last a week, raising doubts about America's ability to fight a high-intensity war near China, including over Taiwan.