News Desk
The ongoing US-Iran war has affected China’s overseas investment and infrastructure projects under the Belt and Road Initiative (BRI), including the most-coveted China-Pakistan Economic Corridor (CPEC). The war was going to damage Chinese investment not just in Iran but in the entire Gulf region, where China invested USD 89 billon during 2019-2024.
In Iran, China started to bag big contracts in areas ranging from energy and heavy industry to trade promotion before the US-led war began. David Xie, an executive at a Shenzhen-based technology firm, apparently lost the contract worth RMB 5 million in Iran after the war broke out. “We couldn’t reach them,” Xie said. “Messages are not answered. We don’t know whether the project is postponed or cancelled.”
Iran is a part of the BRI that aims to fulfil China’s energy needs and promote its influence in the Middle East using links through Pakistan and Central Asia. These plans are now affected, said Cao Xin, a Beijing-based strategic affairs expert. “The damage to China’s interests caused by the US and Israel’s war against Iran is mainly due to the potential serious impact on the smooth expansion of China’s “Belt and Road” strategy and China’s plan to build a new Eurasian continental bridge,” Cao said.
China began construction of a bridge at Qeshm Island and a freight railway line connecting Xi’an province, as China sought to boost infrastructure connectivity with the region. “Tehran was not just another partner for Beijing, it was also central to China’s grand strategy. And the Chinese Communist Party’s investment in Iran has been monumental,” said Miles Yu, Director of the China Centre at the Washington DC-based Hudson Institute.
The Chinese exports to the Gulf countries grew significantly faster than to the rest of the world in 2025, with double-digit growth in the areas of energy, infrastructure, and green technology. Overtaking the West, China had in 2024 become the largest trading partner of the Middle East countries. In 2024, China made investments of USD 39 billion in the Gulf under BRI, marking a year-on-year increase of 102 percent.
In 2025, China invested USD 4 billion in Sinopec–Saudi Aramco joint venture in Saudi Arabia, USD 848 million in Tauba oilfield expansion project in Iraq, besides substantial investments in UAE, Qatar and Oman, and UAE. “China has invested so much in the region, it has so many projects and forms of cooperation there that this war is very harmful to its interests,” said Ma Xiaolin, a geopolitical expert from Zhejiang International Studies University.
The ongoing conflict will not stop at Iran’s defeat but the Israel-led offensive will move to Pakistan, thus hurting Chinese investment in the country, said international affairs specialist Silvia Boltuc. “This prospect holds significant implications for China, given that Pakistan hosts the CPEC a cornerstone of the Belt and Road Initiative, anchored by the strategic Gwadar Port,” she said.
Several important components of the CPEC are under attack from Baloch and Afghan-sponsored militants. Researcher and professor Vincent James Hooper said China ended up watching its flagship investments burn at both ends in Pakistan and Iran after the US attack. “Epic Fury degrades one of the pillars of China’s regional infrastructure diplomacy: a weakened Iran cannot serve as a reliable corridor state for Chinese trade routes,” Hooper said.
Boltuc said the ongoing conflict has had the objectives of undermining Beijing’s strategic investments, disrupting critical logistical links, and damaging Chinese-backed regional architectures. “Destabilising both Iran and Pakistan—two of the most invested corridors in the BRI—would leave China structurally vulnerable west of Xinjiang and expose its energy supply lines to adversarial control,” she said.
Yu said the implications of Iran’s destabilisation are severe for Beijing as it loses economic and geopolitical clout. “China had bet on a confident, defiant and nuclear-ambitious Iran. Instead, it is left with a battered partner whose utility has sharply diminished,” he said. “Belt and Road projects tied to Iranian ports, rail corridors and energy infrastructure now face heightened instability and security risk.”
