How the Iran war is affecting China including Hong Kong. On Feb 28, US and Israeli jets shattered the peace over Iran, assassinating the country’s supreme leader Ali Khamenei and igniting a conflict that has already redrawn the global energy map. Three weeks later, the Strait of Hormuz — the narrow chokepoint carrying nearly half of China’s oil imports — remains a flashpoint of Iranian retaliation and naval standoffs. What began as a surgical strike has morphed into what now looks more like a grinding war of attrition, and the whole world is feeling the tremors. The war is still young, but its likely effects on China, including Hong Kong, are already coming into sharp focus: Higher energy costs, strategic recalibration, and a complex mix of threats and opportunities.
China is the world’s largest energy importer, and Iran has long been a significant supplier. In 2025, Beijing received 1.38 million barrels per day from Iran — roughly 12 percent of its total crude imports, ranking as its third-largest source after Russia and Saudi Arabia. With the Hormuz oil tanker route now largely paralyzed, global Brent prices have surged beyond $100 a barrel. China’s strategic oil reserves (built up last year to the equivalent of 104 days of imports) provide a buffer, and Russian oil imports can be increased. But prolonged closure will inflict painful energy price rises for manufacturers and consumers alike. Furthermore, over $100 billion in Belt and Road energy and infrastructure deals inside Iran now sit in limbo, threatened by the war. Across the broader Gulf region, Chinese steel sales, electric-vehicle exports, and solar-panel deals ($90 billion invested since 2019) face the same headwinds. The Middle East had become one of China’s fastest-growing export markets; suddenly it is a high-risk zone.
China’s response to the war has been textbook diplomacy: Strong condemnation, calm restraint. It has called for an immediate ceasefire, respect for Iran’s sovereignty and territorial integrity, and a return to dialogue to prevent further regional escalation. Foreign Minister Wang Yi alluded to the illegality of the war, commenting: “A strong fist does not mean strong reason. The world cannot return to the law of the jungle.” Chinese special envoys shuttle between Gulf capitals, positioning Beijing as the responsible voice of the Global South, very much the adult in the room. Meanwhile, China is quietly strengthening its position, pursuing more oil imports from other sources, a faster renewable energy rollout, and deeper ties with Central Asia. The war, ironically, may hasten the very energy independence Beijing has long desired. But the real (albeit unsought) silver lining is political. The US has revealed itself as the reckless, aggressive superpower, with China the stable, responsible alternative.
The Chinese mainland is learning to diversify faster; the Hong Kong Special Administrative Region is learning to profit from its stability in uncertain times. In the end, neither will emerge unscathed — but both may well emerge stronger, precisely because the world’s most volatile region has just reminded them how fragile success really is, and how nimble and adaptable policymakers need to be
For Hong Kong, it’s a similar story of threat and opportunity. Financial Secretary Paul Chan Mo-po spoke plainly: The conflict has created “significant global uncertainty”, driving up oil and gold prices, inflating transport costs, and scrambling logistics timelines. The Hang Seng Index dipped sharply in the first week of the war, mirroring global jitters. Hong Kong’s direct trade with Iran is tiny, but its role as a superconnector for global businesses tapping into the Chinese mainland means that every delayed tanker or plunge in market sentiment ripples through its economy.
Yet the conflict also highlights Hong Kong’s advantageous position. Chan has already predicted fresh capital inflows, with Middle Eastern funds looking for a safe haven away from US-heavy portfolios. The city’s airport has become a reliable transfer hub for travelers re-routed around the war zone. Unsurprisingly, Cathay Pacific reports shifting demand patterns: European and American travelers are now booking direct Asia routes or even extending stopovers in Hong Kong. Luxury hotels are raising occupancy forecasts. In a city that has weathered social unrest, riots and the COVID-19 pandemic, volatility is not new; it is simply another challenge to demonstrate its resilience and provide new opportunities. This will be a painful lesson for those expatriates who abandoned Hong Kong for Dubai or other Gulf cities a few years ago. Proclaiming “the death of Hong Kong” in the wake of the 2019-20 riots and pandemic turmoil, they must now be ruing their decision. As with the rest of China, Hong Kong is currently an oasis of calm and stability in a troubled world.
The longer the war drags on, the more durable the economic and reputational changes become. If China’s vast domestic market and State-driven reserves give it a resilience and self-sufficiency that smaller economies envy, Hong Kong’s openness and rule-of-law reputation position it as a nimble beneficiary of capital flight and re-routed travel.
As missiles still fly over the Persian Gulf and diplomats scramble for ceasefires, the Iran war is quietly rewriting the rules for Asia’s two most interconnected economies. The Chinese mainland is learning to diversify faster; the Hong Kong Special Administrative Region is learning to profit from its stability in uncertain times. In the end, neither will emerge unscathed — but both may well emerge stronger, precisely because the world’s most volatile region has just reminded them how fragile success really is, and how nimble and adaptable policymakers need to be.
The author is a British historian and former principal of Sha Tin College, an international secondary school in Hong Kong.
The views do not necessarily reflect those of China Daily.
