Blocking the Strait of Hormuz: What consequences for Chinese economic growth?

The war in the Middle East and the closure of the Strait of Hormuz are highlighting China’s energy vulnerability. Dependent on this maritime route for nearly one third of its oil imports, China is exposing itself to the risk of an economic crisis in the event of a prolonged blockage, at a time when it has just launched its 15th Five-Year Plan (2026-2030), which profoundly redefines its political, economic and strategic priorities. In this context, what could be the repercussions of a prolonged closure of the Strait of Hormuz on the Chinese economy? To what extent could the new strategic priorities defined by Beijing help cushion this shock? Finally, will the new partnerships established by Beijing with the countries of the so-called “Global South” enable it to consolidate its influence on the international stage? An analysis by Emmanuel Lincot, co-head of the Asia-Pacific Programme.

In the context of war in Iran and the blocking of the Strait of Hormuz, what could be the economic and energy consequences for China, particularly in terms of inflation and supplies?

Approximately one third of Chinese oil imports transit through the Strait of Hormuz. It is therefore a vital artery for its economy. The blocking of this strait deprives China of an essential share of its supplies, namely nearly 5.5 million barrels per day, which rapidly becomes an unsustainable situation for its economy and industry. A prolonged crisis could compromise economic and social stability, particularly as Chinese growth is expected to fall below 5% in 2026. Consequently, the Chinese authorities have announced “temporary regulatory measures” to limit increases in domestic petrol and diesel prices. For example, price rises have been capped at around half the level that would normally have resulted from the usual pricing mechanism. In concrete terms, increases have been limited to 1,160 yuan (146 euros) per tonne for petrol and 1,115 yuan (140 euros) per tonne for diesel, instead of the much larger increases that market forces would otherwise have imposed. To mitigate these risks, China has diversified its sources of supply (Russia, Africa, Latin America) and its transport routes (pipelines, overland routes via neighbouring Pakistan and its port of Gwadar). It has also increased its strategic reserves and developed renewable energy sources. The change in the Chinese economic paradigm aimed at reducing dependence on fossil fuels reinforces the authorities’ determination to further develop nuclear energy, photovoltaics and wind power throughout the country. Non-fossil fuels accounted for 21.7% of total energy consumption in 2025. The objective is to reach 25% by 2030. Strategically speaking, however, this crisis could in the long term constitute an opportunity for China. The entanglement of the American army in this conflict could exhaust Washington. Moreover, the United States does not possess sufficient munitions to sustain a prolonged engagement. THAAD missiles (Terminal High Altitude Area Defense systems) are already being redeployed from South Korea to the Middle East. Weakening the Far Eastern front could prove an opportunity for Beijing. Finally, China, like Iran, is operating on a long-term timescale in its rivalry with the West. This new war, added to that in Ukraine, will contribute to further weakening the West. From the Iranian and Chinese perspectives, this plan, if it exists, would fall within the framework of asymmetric warfare. This becomes all the more understandable given that Washington must extricate itself from this situation as rapidly as possible. Otherwise, this crisis could strengthen China and its partners.

China has just launched its 15th Five-Year Plan. What are the principal politico-economic priorities of this new Chinese strategy, and what major challenges is the plan intended to overcome?

For 2026-2030, priority is being given to technological self-sufficiency and innovation. China is placing autonomy in cutting-edge technologies (semiconductors, artificial intelligence, humanoid robots, nuclear fusion) at the heart of its strategy, in order to reduce dependence on imports and strengthen its position within global value chains. The plan also aims to stimulate domestic demand and increase the share of household consumption in GDP, which is expected to rise from 40% to 45% by 2030. This is accompanied by a desire to develop public services and the social security system, notably in response to demographic challenges (ageing, birth rate). The plan also relies on a rebalancing towards domestic consumption. This in itself constitutes a Copernican revolution, given that the Chinese economic model has historically depended on exports. This transformation goes hand in hand with industrial modernisation geared towards a green transition. Accordingly, the plan reaffirms the construction of an industrial system focused on “new quality productive forces”, while continuing the ecological transition. China has committed itself to reducing its CO2 emissions per unit of GDP by 17% by 2030, although this target is less ambitious than previous commitments, reflecting tensions between growth and decarbonisation. The Iranian crisis can only reinforce these choices. However, despite all forecasts of resilience, consumers are not responding. They remain extremely cautious about the future and consume little. It should be recalled that the savings rate in China remains one of the highest in the world. According to the latest available data in 2026, the household savings rate in China stands at around 31.7% of disposable income, a level maintained since 2023 and slightly higher than before the health crisis. In terms of national savings (including households, companies and the state), China has maintained a rate of around 50% of GDP for several years, which is exceptionally high by global standards.

To what extent can China’s rapprochement with new strategic partners, particularly Russia and the countries of the Global South, strengthen its influence and reshape the balance of power on the international stage?

This is a long-term strategy dating back at least to the Bandung Conference (1955). China positions itself as the “leader” of developing countries by defending their common interests against an international order dominated by the West. It uses platforms such as the BRICS, the Belt and Road Initiative (BRI), the Shanghai Cooperation Organisation (SCO) and bilateral partnerships to strengthen economic, technological and political cooperation with these countries. The objective is to increase the representation and voice of Global South countries within international institutions, while promoting a multipolar system. China is encouraging the creation of a new economic order which it intends to promote by facilitating the de-dollarisation of trade and the development of alternative financial systems (local currencies, swap agreements). Transactions with Iran and Brazil in the respective sectors of oil and soybeans are therefore conducted in yuan. In summary, the rapprochement between China and the “Global South” is accelerating the emergence of a multipolar world in which Beijing plays a central role in the reconfiguration of alliances and the rules of the international system. This strategy enables China to gain strategic autonomy and exert greater influence over global decisions, while progressively weakening Western dominance.