Framing new rules of an emerging multipolar global system guided by multilateralism, end to regime change practices, and ascendancy of geoeconomic convergence over geopolitical rivalries, China may have emerged as the biggest winner of the war in Iran, which is showing visible signs of ending, despite real challenges that still need to be addressed.
At the time of writing, the ceasefire deal to be signed in Switzerland would entail: opening of the Strait of Hormuz by Iran, halt to uranium enrichment by Tehran, and renunciation of nuclear weapons. In exchange Iran would receive $25 billion of its frozen assets, sanctions relief, an end to the US naval blockade, and a $300 billion reconstruction package.
In its critical intervention to help end the war in Iran, Beijing appears to be establishing a new template of global governance–an imaginative approach for fulfilling national interests that also benefits others.
In other words, by pursuing a novel approach, not only is China promoting its own national interests, it is also opening pathways for a new post-West rules based order.
To understand Beijing’s new approach, a careful appraisal of Chinese President Xi Jinping’s four principles to end the war in Iran may be necessary.
In mid-April, President Xi in the presence of Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan of Abu Dhabi stressed the importance of four principles not only to end conflict in Iran but for opening a road map for lasting peace in the region.
These comprise: peaceful coexistence, respect for national sovereignty and the international rule of law, as well as a commitment to club development and security.
Though sounding abstract, Xi’s “four-point formulation” is a coded geopolitical doctrine.
In calling for “Peaceful coexistence,” Xi is seeking an end to regime change as well as a prolonged war.
In other words, when decoded, the language implies that China is implicitly rejecting military escalation as well as attempts to overthrow or weaken Iran. In more practical terms , Xi appears to be calling for initiating a ceasefire, and acceptance of Iran, in its present form, as a legitimate actor in the region.
By stressing the salience of “National sovereignty”- the second principle– Xi is spelling out Beijing's red line; that intervention in Iran's internal politics is unacceptable. Besides, there should not be any attempt to force concessions out of Tehran that look like surrender.
This implies opposition to regime change, military occupation and coercive internal destabilisation.
On the contrary, the Chinese are supporting diplomacy and negotiations with Iran as an equal sovereign state.
By highlighting “International rule of law”, officially framed as upholding a UN‑centred order and international law to avoid “law of the jungle,” the Chinese President appears to be critiquing US‑led sanctions and military strikes without broad international backing.
In fact, China is seemingly signaling that any deal or enforcement mechanism should go through multilateral frameworks, UN or similar, and not be dominated by a single power. In Iran's case, China wants that negotiations and guarantees are collectively legitimised, not US‑imposed.
Xi’s fourth principle of clubbing development with security as the panacea for lasting peace is arguably the most significant and novel among his four principles. Officially it is nested under the formulation that “security enables development and development stabilises security”.
When the symbiotic relationship is decoded, it spells China’s long-held approach that stability comes less from military dominance and more from economic incentives and integration.
In Iran’s specific case, China, as past record would show, would want to keep Iran economically engaged by lifting restrictions on its oil exports and trade along with enmeshing it with Eurasia’s new connectivity linkages, especially those driven by Beijing’s Belt and Road Initiative (BRI).
Xi’s four-point proposal is not just a peace slogan, but a template calling for freezing the conflict, legitimising Iran as a state actor, shifting the process to multilateral diplomacy, and stabilizing the region through economic integration rather than military dominance.
In its effort to enforce its new rules, China has diligently worked to forge leverages with three countries. Its triple engagement covers Iran, the US and Pakistan. Within this trio, China’s special relationship with Iran is key.
Even before the war began on February 28, China had positioned itself to establish unrivalled influence over Tehran.
More specifically, China had been buying 1-1.2 million barrels of oil per day from Iran. It is estimated that most of these purchases were paid for in Yuan.
These settlements are reportedly routed through the Chinese banks such as International Commercial and Industrial Bank of China (ICBC) or through yuan-denominated crude futures on the Shanghai International Energy Exchange (INE).
By selling its oil in Yuan, Iran bypassed US sanctions, which bar dollar transactions.
In turn, Iran had been using its Yuan earnings deposited in Chinese banks to fund specific infrastructure and development projects, many of them tied to Chinese companies and the BRI, Beijing’s giant connectivity project along the ancient silk route.
These include the Tehran–Mashhad High-Speed Rail– a flagship project connecting Iran’s capital to its second-largest city.
Iran has also used Chinese Yuans to finance port upgrades such as Chabahar and Bandar Abbas.
In the energy sector, China has used Petro-Yuans to upgrade Iran’s oil fields and refineries. These projects include modernisation of the South Pars gas field and refinery expansions.
Besides, Iran’s Yuan holdings have notably been channeled into telecommunications and technology sectors. For instance, Huawei and other Chinese tech firms have supplied Iran with telecom equipment, funded through yuan reserves. This has strengthened Iran’s digital infrastructure while bypassing Western suppliers restricted by sanctions.
Iran has also used Petro-Yuans to buy heavy machinery, electrical equipment, and vehicles from Chinese manufacturers. These imports have sustained Iran’s industrial base.
During the course of the war, the Financial Times (FT) reported that Iran had secretly acquired a Chinese spy satellite in late 2024 that has allowed it to target US military bases across West Asia.
Reuters citing the FT report said that Chinese company Earth Eye Co, that built the TEE-01B satellite was acquired by the Islamic Revolutionary Guard Corps' Aerospace Force, after it was launched into space from China.
The Chinese foreign ministry denied the report.
"Recently, some forces have been keen on fabricating rumors and maliciously associating them to China," the ministry said in a statement to Reuters.
"China firmly opposes this kind of practice driven by ulterior motives," read the statement.
Because it had locked in exclusive leverage over Iran, the Trump administration had no option but to rely on China to get a peace deal done.
That is where the US President’s visit to Beijing in mid-May comes in. It was during this visit that Xi and Trump managed to find critical common ground to end the war. But this was also an occasion that the Chinese President could draw his US counterpart in the four-point framework, which is reflected in the terms of the draft deal.
More specifically, during that visit, President Xi had reportedly offered to help negotiate an end to the war with Iran and keep the Strait of Hormuz open to global shipping. Following their summit meeting in Beijing, Trump told Fox News that Xi would like to help resolve the conflict and reopen the narrow channel through which nearly 20 per cent of the world’s oil and gas supplies pass. “He said, ‘I would love to be a help, if I can be of any help whatsoever,” Trump was quoted as saying .
It is apparent that the spirit of Xi’s four point proposal, including the respect for Iran’s sovereignty and focus of arming Teheran with sanctions- free geoeconomic heft have been woven into the proposed ceasefire deal.
In shaping the ceasefire deal, the Chinese could also draw on their special relationship with Pakistan, born during the era of the Sino-Soviet rift of the Cold War years. The Beijing-Islamabad ties acquired a new lease of life once Pakistan joined BRI and jointly launched with Beijing the hyper-strategic China Pakistan Economic Corridor (CPEC).
Unsurprisingly, China exhorted Pakistan to step up mediation to end the conflict in Iran . Chinese state media reported that last month Chinese Foreign Minister Wang Yi encouraged Pakistan mediation efforts so that the Strait of Hormuz can be opened. and contribute to properly addressing issues related to opening the Strait of Hormuz.
Earlier too the China-Pakistan track was demonstratively active when Beijing and Islamabad issued a joint five-point plan that called for a ceasefire, dialogue and the re-opening of the Strait of Hormuz.
Signalling how decisive Chinese influence conveyed through Pakistan saved the day, an AFP report quoted an anonymous senior Pakistani official as saying that on ceasefire night, “ hopes were fading, but China stepped in and convinced Iran to agree to a preliminary ceasefire".
"While our efforts were central, we were falling short of a breakthrough, which was ultimately achieved after Beijing persuaded the Iranians," said the source, who requested anonymity to speak openly on a sensitive diplomatic matter.
Paksitan has also publicly acknowledged that Xi’s four-point West Asia plan provided a “guiding framework” for peace.
With a hefty $300 billion reconstruction package embedded in the ceasefire deal, it will not be surprising if Chinese companies, already familiar with Iran, are lining up for a bonanza.
It is to be expected that in the first phase of reconstruction, that usually lasts for around six months, engineering companies move in to restore power grids, repair roads, bridges, basic urban infrastructure and modular unit temporary housing.
In Phase 2 that can extend up to three years rebuilding infrastructure gets underway where rail and transport State Owned Enterprises (SOEs) such as China State Railway Group and large construction giants such as CSCEC and CCCC could get involved.
In phase 3, restoration of the energy eco-system gets into play–a stage where key companies such as the
China National Petroleum Corporation (CNPC) and Sinopec could come into play. This will involve repair of oil and gas fields, upgradation of refineries and expansion of export capacity.
Other stages of reconstruction usually involve restoration of heavy industry, including steel and industrial plants as well as construction of dams and hydropower.
Finally, the digital economy, with players such as Huawei and ZTE, kicks in focusing on telecom networks, surveillance systems , smart cities and fintech/ payment architecture.
It is expected that the scale of Chinese involvement in reconstruction depends significantly on whether US sanctions against Tehran are lifted. Fearing secondary sanctions, many Chinese private players with an exposure to the US market are wary of entering Iran, though SOEs are usually unimpacted.
In China’s bid to define new rules for the multipolar era, one major hurdle remains–Israel. Israel has so far rejected the deal and has declared its intent to change the map of Lebanon. If this materializes, and the Trump administration is unable to reign in Tel Aviv, this is likely to be a deal breaker, as Iran will certainly reject such a move.
In the end the Iran war could drive a wedge in the US-Israel relationship, a prospect that was unthinkable when the war began, but is now certainly on the radar, despite the presence of the powerful Israeli lobby in Washington.
*Atul Aneja is a veteran journalist specializing in foreign affairs. He is the former Editor of India Narrative website, and Strategic Affairs Editor of the Hindu newspaper.
