Axios: China wins by watching

Posted on April 20, 2026 by michelleclarke2015
China wins by watching
 
Photo illustration collage of Xi Jinping, a map of Iran, and various market trend lies and abstract elements.
Illustration: Aïda Amer/Axios. Photo: Getty Images
 
Chinese President Xi Jinping has spent the Iran war doing what he does best — patiently exploiting America’s distraction and discord, Axios’ Jim VandeHei writes in a “Behind the Curtain” column.

Why it matters: The conflict allowed China to bolster its diplomatic leverage, clean-energy muscle and intelligence on the U.S. military — all without firing a shot or spending a dollar.

The implications touch supply chains, energy procurement, geopolitical risk, and the race for superior AI and weaponry

.Even with progress toward a framework for peace between the U.S. and Iran, significant disruptions continue in the Strait of Hormuz. The strategic damage is done. 

The military impact is the part that should scare the hell out of Pentagon planners:The U.S. committed roughly 80% of its JASSM-ER stealth cruise missile inventory to the Iran fight, pulling stockpiles from the Pacific to feed it. The conflict significantly depleted U.S. supplies of Tomahawk and Patriot missiles, THAAD interceptors and drones.

Beijing got a free masterclass in modern American warfighting: how we use AI to target, how we rotate carrier groups, how cheap Iranian drones drain our most expensive interceptors. For Chinese war planners gaming out a Taiwan invasion, it’s better than any simulation. 

On energy, China emerges a huge winner of the ongoing Hormuz shockwaves:When oil and gas supplies get weaponized, import-dependent countries accelerate renewables. China owns over 70% of global solar, wind, battery and electric vehicle supply chains. The longer Hormuz stays disrupted, the deeper the world’s dependency gets.

The war was the stress test that Beijing’s energy strategy was designed for. 

The diplomatic optics couldn’t have been better for the Chinese:

While Trump was threatening to bomb Iran “back to the Stone Ages,” Beijing was quietly helping Pakistan bring both sides to the table in Islamabad — while capitals from Riyadh to Jakarta are weighing which superpower to align with.

As Ian Bremmer points out, America’s allies saw the U.S. pull missile defense assets from South Korea, leave allies in Asia without Patriot coverage, and shift naval power from the Pacific to the Gulf. The message received in Seoul, Tokyo, Canberra and Taipei: American security commitments have an asterisk. 

China’s AI push got a clear boost from the war’s financial consequences:The Gulf’s massive AI buildout — billions from Microsoft, Oracle, Nvidia and others — faces indefinite geopolitical risk after Iranian strikes on AI-related targets across the region. 

The rare earths piece, out of sight for most Americans, might be Beijing’s biggest asset right now:

There’s currently no heavy rare-earth separation capacity in the U.S. at meaningful scale. China controls roughly 70% of rare-earth mining and 90% of separation and magnet manufacturing. New Pentagon procurement rules banning Chinese-sourced rare earths take effect in 2027 — but domestic alternatives won’t be ready for years.

The weapons the U.S. fired in Iran — Tomahawks, JDAMs, Predator drones — all require rare earths for their precision guidance systems.

The bottom line: The country that may have gained the most from the Iran war never fired a shot. Share this column … Axios’ Dave Lawler and Shane Savitsky contributed.Smart deeper dive: Ian Bremmer, “How the Iran war made China stronger.”📈 If you’re a CEO or on a CEO’s team: Ask to join Jim’s new weekly Axios C-Suite newsletter.
    
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About michelleclarke2015

Life event that changes all: Horse riding accident in Zimbabwe in 1993, a fractured skull et al including bipolar anxiety, chronic fatigue …. co-morbidities (Nietzche 'He who has the reason why can deal with any how' details my health history from 1993 to date). 17th 2017 August operation for breast cancer (no indications just an appointment came from BreastCheck through the Post). Trinity College Dublin Business Economics and Social Studies (but no degree) 1997-2003; UCD 1997/1998 night classes) essays, projects, writings. Trinity Horizon Programme 1997/98 (Centre for Women Studies Trinity College Dublin/St. Patrick's Foundation (Professor McKeon) EU Horizon funded: research study of 15 women (I was one of this group and it became the cornerstone of my journey to now 2017) over 9 mth period diagnosed with depression and their reintegration into society, with special emphasis on work, arts, further education; Notes from time at Trinity Horizon Project 1997/98; Articles written for Irishhealth.com 2003/2004; St Patricks Foundation monthly lecture notes for a specific period in time; Selection of Poetry including poems written by people I know; Quotations 1998-2017; other writings mainly with theme of social justice under the heading Citizen Journalism Ireland. Letters written to friends about life in Zimbabwe; Family history including Michael Comyn KC, my grandfather, my grandmother's family, the O'Donnellan ffrench Blake-Forsters; Moral wrong: An acrimonious divorce but the real injustice was the Catholic Church granting an annulment – you can read it and make your own judgment, I have mine. Topics I have written about include annual Brain Awareness week, Mashonaland Irish Associataion in Zimbabwe, Suicide (a life sentence to those left behind); Nostalgia: Tara Hill, Co. Meath.
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