China has emerged as the main beneficiary of the closure of the Strait of Hormuz, according to Asia Group, a strategic advisory firm based in Washington, DC.
A report released this week said the disruption of supplies of crude oil and other goods from the Middle East was having an uneven impact on economies in Asia that rely heavily on imports for fuel.
However, China’s ability to diversify its energy supplies and tap into emergency reserves has given it a strategic advantage in a broadly devastating crisis, the Asia Group said.
China helped ease the global oil shock, exports of clean energy technology surged, and China framed the Iran war as another example of how Chinese leadership could supplant the United States in ending global conflicts.
“Both economically and geopolitically, the Chinese government is using this crisis to push for China to be chosen as a stable partner,” the Asia Group wrote. “Beijing sees this crisis as the final validation of its industrial independence strategy.”
If energy shortages persist, China could still suffer further from soaring raw material prices and a broader global economic slowdown, hurting demand for Chinese exports as the economy increasingly relies on exports to sustain growth.
Still, the Asia Group argues that China is well-positioned to weather further macroeconomic instability.
“This is not a crisis, this is a problem that needs to be addressed,” he said.
