There's an emerging consensus that China is among the chief beneficiaries of the escalating conflict between the United States and Iran. While Beijing has undoubtedly welcomed Washington becoming entangled in yet another war in West Asia, and continues to reap commercial gains from booming exports of electric vehicles and other technologies, the conflict is also exposing the limits of China's geopolitical influence.

China is, first and foremost, a commercial power in the Persian Gulf. Beyond trade and investment, however, it has little diplomatic, political, or security leverage to shape the course of the conflict or influence the region's postwar order.

Jonathan Fulton, an associate professor at Zayed University in Abu Dhabi and author of the China-MENA Newsletter, joins Eric to examine why China's economic footprint in the Gulf has not translated into strategic influence.

📌 Topics Covered in This Episode

• Is China really benefiting from the Iran war?
• Why Beijing won't replace the U.S. in the Gulf
• The limits of China's geopolitical influence
• China's commercial strategy in the Middle East
• Gulf views on balancing China and America
• What comes next for China-Gulf relations

Show Notes:

• Sign up to The China-MENA Substack Newsletter: https://chinamenanewsletter.substack.com/
• The Diplomat: After the Iran War, China's Middle East Strategy Will Prioritize the Gulf by Chenjie Song
• The Guardian: China is a clear winner from Trump's war in Middle East, report concludes by Amy Hawkins

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Two weeks ago, a PLA Navy submarine in the South China Sea test-fired a nuclear-capable intercontinental ballistic missile that flew 7,300 kilometers before splashing down in the South Pacific. The launch drew sharp criticism from several Pacific Island countries, whose leaders argued that it violated the region's longstanding identity as a nuclear-free zone.

To be clear, the test did not violate international law or established norms. The United States, France, and other nuclear powers have conducted similar missile tests in the Pacific for decades.

Even so, Zhang Denghua, a senior research fellow at the Australian National University's Department of Pacific Affairs and CGSP's non-resident fellow for the Pacific, argues that the launch could erode Beijing's hard-earned influence in the region. He joins Eric to discuss the strategic implications of the test, China's intensifying competition with traditional powers in the Pacific, and why Taiwan remains such a potent issue for Beijing in this part of the world.

📌 Topics Covered in This Episode

• China's unprecedented Pacific missile test
• Why Pacific leaders condemned the launch
• Australia's new Pacific security partnerships
• China's growing rivalry with regional powers
• Papua New Guinea closes Taiwan office
• What's next at the Pacific Islands Forum

Show Notes:

• The China-Global South Project: What To Know About China's Recent Missile Test in the South Pacific by Zhang Denghua
• The China-Global South Project: How Pacific Island Nations Are Capitalizing on Major Power Rivalry by Zhang Denghua
• The China-Global South Project: Japan is Eyeing China's Moves in the Pacific by Zhang Denghua

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China's suspension of rare earth exports to Japan has now entered its seventh month, with shipments in June again falling to a fraction of their level a year earlier. The restrictions are one sign of a broader collapse in relations between the two countries since Prime Minister Sanae Takaichi took office last fall.

The relationship, long marked by tension, deteriorated sharply after Takaichi said that Chinese military action against Taiwan would "threaten Japan's survival." Since then, ties have continued to worsen.

William Yang, senior Northeast Asia analyst at the International Crisis Group, joins Eric to explain the politics driving this increasingly dangerous confrontation and why its consequences will be felt across Asia.

📌 Topics Covered in This Episode

• Why China-Japan relations are unraveling
• China's rare earth pressure on Japan
• Taiwan's role in the growing dispute
• Japan's expanding regional security strategy
• The future of the U.S.-Japan alliance
• What's next for Northeast Asia?

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The U.S. and China clashed at the United Nations this week, with each accusing the other of fueling instability in the Persian Gulf. Washington has long argued that Beijing plays a pivotal role in the conflict as the largest buyer of Iranian oil and a supplier of dual-use technologies that could support Tehran's military.

Many experts, however, dispute that assessment. They argue that China's ability to influence Iran is far more limited than commonly assumed and that there is little evidence Tehran would bow to Chinese pressure on matters of national security. Nor is there any indication that Beijing is willing to use whatever leverage it may have.

Jesse Marks, CEO of the Asia-Middle East consultancy Rihla Research & Advisory and a leading scholar of Chinese diplomacy in the region, joins Eric to explain why Beijing is likely to remain a largely passive player, both as the war continues and in whatever political settlement eventually emerges.

Show Notes:

• East Asia Forum: Iran's bid for Beijing's backing meets its limits by Jesse Marks
• Arab Gulf States Institute: China's Mediation Ceiling in the Iran War by Jesse Marks
• Gulf International Forum: Parallel, Not Replacement: Why China Can't Supplant U.S. Security in the Gulf by Jesse Marks & Chenjie Song

📌 Topics Covered in This Episode

• China and the U.S. clash at the UN
• Does Beijing have leverage over Iran?
• Why China's diplomacy has limits
• Pakistan's role in Iran mediation
• The future Gulf security order
• What China wants after the war

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The U.S. war against Iran is having a profound impact far away from the battlefield, all the way on the other side of Asia in the Western Pacific. There's an emerging consensus among Washington's allies and foes alike that the U.S. will be incapable, unwilling, or a mix of both to fight a war against China in this part of the world.

That's prompting a rapid reevaluation of security postures across the region, a shift on full display over the past week: Australia moving to bolster security ties in the South Pacific and Japan building what many see as a new security architecture for the post-American order.

Derek Grossman, CGSP's non-resident fellow for the Asia-Pacific and a professor of international relations at the University of Southern California, joins Eric to discuss the week's key events in the South China Sea, South Pacific, and Japan's latest moves to build a new intelligence agency.

• South China Sea tribunal at 10
• China's Pacific missile test
• Japan's security shift
• Philippines vs. Vietnam on China
• U.S. alliances under Trump
• Asia's changing security landscape

Show Notes:

• The China-Global South Project: Japan Emerges as Asia's New Strategic Anchor by Derek Grossman
• Nikkei Asia: Vietnam's new balancing act in an unbalanced world by Derek Grossman
• International Crisis Group: Manila's Push for a New Rulebook in the South China Sea Peters Out by Derek Grossman

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With open conflict between the U.S. and Iran now underway again, it's still too early to determine which side will ultimately prevail. But one point is gaining broad agreement among analysts: China is one of the few major powers that stands to benefit from the war.

The conflict has accelerated several trends that work in Beijing's favor. It has driven greater use of the Chinese yuan in international trade, boosted exports of Chinese solar panels, batteries, and electric vehicles, and, perhaps most importantly, stretched U.S. military resources. Some analysts now argue that the strain has made the Pentagon's long-standing ambition of being able to fight two major wars simultaneously increasingly unrealistic.

Ahmed Aboudou, an associate fellow at Chatham House in London and head of the China section at the Emirates Policy Center in Abu Dhabi, is among the scholars who believe the war has created significant strategic opportunities for Beijing. He joins Eric to explain why Chinese policymakers may be quietly pleased with how the conflict is unfolding.

📌 Topics Covered in This Episode

• China's strategic gains from the Iran war
• The yuan's expanding international role
• Why Chinese exports are surging
• The strain on U.S. military capacity
• Is the Pentagon's two-war strategy over?
• How Beijing views the unfolding conflict

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Kenya's landmark debt restructuring deal with China, announced last year, converted $3 billion in outstanding China Exim Bank loans from U.S. dollars to Chinese yuan. The currency switch could save the East African country more than $200 million in debt servicing costs.

Not surprisingly, other countries in Asia and Africa are now exploring similar arrangements to reduce their debt burdens. But a new report from the development finance research lab AidData argues that Kenya's savings came mostly from the restructuring terms — not from the yuan conversion itself.

AidData's Oshin Pandey and Sailor Miao join Eric and Cobus to explain how the deal worked, why it matters, and why there is more to this arrangement than most headlines suggest.

📌 Topics Covered in This Episode

• Kenya's landmark China debt deal
• Debt restructuring vs. yuan conversion
• Why AidData challenges the narrative
• Ethiopia's restructuring prospects
• China's evolving lending strategy
• The future of sovereign debt relief

Show Notes:

• AidData: Kenya's USD-to-RMB Debt Conversion Was Really a Restructuring by Sailor Miao and Oshin Pandey
• The China-Global South Project: Kenya's Chinese Debt Swap Comes With a Hidden Currency Risk

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Two very different narratives about China's economy emerged this week. In France, G7 leaders pushed back against what they see as China's growing dominance in key industries. In Beijing, meanwhile, the Ministry of Industry urged observers to look beyond data showing acute economic weakness.

The reality is that China's economy is so large and complex that both narratives can be true at the same time.

Ker Gibbs, a longtime China-based executive and former president of the American Chamber of Commerce in Shanghai, explores this contradiction in his new book, The Fragile Dragon: Trade, Trump, and China's Vulnerabilities. Ker joins Eric from San Francisco to discuss his decades of experience working in China and what companies in Africa, Asia, and elsewhere need to understand before entering the Chinese market today.

📌 Topics Covered in This Episode

• China's competing narratives of economic strength and weakness
• Why weak consumer demand remains a major challenge
• The role of exports in sustaining China's growth model
• How Xi Jinping's policies are reshaping the economy
• What foreign companies need to know before entering the China market
• Why China's economic trajectory matters for the Global South

Show Notes:

• Amazon: The Fragile Dragon: Trade, Trump, and China's Vulnerabilities by Ker Gibbs
• The New York Times: China's Spending Slowdown Deepens as Households Tighten Their Belts by Keith Bradsher
• Reuters: G7 Leaders Tackle Reliance on China for Critical Minerals

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