Three weeks into a war that was supposed to last ten days, the United States finds itself in a costly and unresolved confrontation with Iran. The toll is mounting, energy markets are in turmoil, and no clear exit strategy is in sight. But as Washington absorbs the weight of that reality, China may be emerging as one of the conflict’s quieter beneficiaries.
In an interview with BeInCrypto, Oxford-based political scientist Richard Heydarian broke down exactly how. From depleting American weapons stockpiles to accelerating de-dollarization, he argued the conflict advances Chinese interests on multiple fronts.
China’s Rivals Bear the Brunt of War
At first glance, China appears to be absorbing the same economic blows as everyone else.
As the world’s largest manufacturer and the second-largest economy, Beijing is deeply energy-dependent. The oil price surge driven by instability in the Strait of Hormuz has been a burden on both the Chinese industry and consumers.
But the scale of China’s losses is only one part of the picture. How those losses compare to those of its rivals is another matter entirely.
Unlike Western-aligned nations whose communications with Tehran remain largely frozen, China and Iran have maintained an open dialogue throughout the conflict. That has given Beijing meaningful leverage over a situation it never entered.
“America’s allies like Japan, the Philippines and South Korea are even more vulnerable. And those countries have no leverage over Iran,” Heydarian told BeInCrypto during a podcast episode.
These nations are also far more energy dependent than China, meaning the economic pain from this conflict is falling disproportionately on Washington’s own partners in the region.
And if the United States were to penalize China over its oil trade with Iran, Beijing holds a significant counter.
“Guess which country controls a lot of critical rare earth minerals? China,” Heydarian put simply.
China’s advantage in this conflict, however, goes beyond energy leverage and raw materials. It extends into the very currency being used to settle Iran’s oil trade.
The Petrodollar’s Quiet Unraveling
Since the war began, Iran has reportedly moved to condition oil tanker passage through the Strait of Hormuz on yuan-denominated payments. For Beijing, this is not a minor operational detail.
Expanding yuan usage in global energy markets has been one of China’s longest-running strategic objectives, one that has historically required years of careful diplomacy and bilateral negotiation. The Iran war handed China that opening in weeks.
“The Iranians only allow apparently ships that are renminbi-based, yuan-based oil transactions. Basically, this war allowed the Iranians to impose a Persian hegemony in that area and then basically make even China have to play by their rules,” Heydarian explained.
He was careful to note that Iran was not acting as a Chinese proxy. Instead, it was asserting regional dominance on its own terms. But the effect for Beijing is significant regardless of Iranian intent.
Meanwhile, the broader implications for the dollar are significant.
The petrodollar system, through which oil is priced and traded globally in US dollars, has long been a cornerstone of American financial power. Every yuan-denominated transaction that displaces a dollar-denominated one erodes that foundation. Though that process was already underway, the conflict has accelerated it.
The dollar is not the only thing eroding amid this conflict.
Beijing’s Free Military Intelligence Operation
While Iran and the United States exchange strikes over the Persian Gulf, Beijing is doing something else entirely.
Heydarian argued that China is systematically studying the performance of Iranian missiles against US and NATO defense systems in real time. Beijing is logging every strike, interception attempt, and system failure.
“With the Chinese, they’re really carefully studying the effectiveness of Iranian They can produce the same missiles on even a larger scale and even more sophistication,” he explained.
What Iran is effectively doing, at its own cost and under active combat, is stress-testing the very defense architecture the United States relies on to protect its allies in Asia.
The implications for the Indo-Pacific are significant. American allies in the region have long anchored their defense posture around the assumption that US weapons systems and interceptors represent an insurmountable technological edge. What is being tested over the Persian Gulf is putting that assumption under serious strain.
“If you’re now the Philippines, Japan, Taiwan, Singapore, among others, you have to carefully watch what’s going on here because we’re seeing many of the much-vaunted NATO weapon systems. The interceptors are apparently not as gold standard or not the magic bullet that we thought they were,” Heydarian explained.
This is, in effect, free military intelligence delivered at Iran’s expense and America’s cost. As China gains intelligence from every missile fired, America is running out of them.
The Arsenal America Cannot Easily Rebuild
Heydarian pointed out that the weapons being used in this conflict are not easily replaced.
Tomahawk missiles, THAAD interceptors, and other high-end munitions are complex systems that rely on supply chains that take years to rebuild. That replenishment problem, he argued, represents one of the most serious and underappreciated strategic costs of this war.
“These [weapons] are not something you can order over Amazon,” Heydarian noted.
He also highlighted the irony at the heart of the issue.
None of these weapons can be built without rare earth minerals, and China controls the vast majority of global supply. When Washington eventually turns to rebuilding that arsenal, it will need to source the raw materials from the same country it is effectively arming against.
“One of the craziest things we’re seeing is that you’re going to rely on China to replenish the weapons that you will end up using against China one day if China decides to do something kinetic in the Taiwan Strait or in the Philippines or against Japan,” he said.
Whether the war ends in weeks or months, the strategic ground China has gained in the interim will not be easily recovered.
