Xi's $270 Billion Middle East Bet Limits China Support for Iran
The South Sabah Al-Ahmad New City project, by the China State Construction Engineering Corporation, in Kuwait in 2025.
Photographer: Salah/Xinhua News Agency/Getty Images
Even as China remains one of Iran’s biggest diplomatic allies, President Xi Jinping’s support for the Islamic Republic is being constrained by a vast trail of Chinese capital across the Gulf.
China ramped up investment in the Middle East in the wake of the pandemic. Companies hit by a slump in the world’s No. 2 economy sought to cash in as Gulf states pushed to diversify beyond fossil fuels into green tech and tourism — sectors that neatly matched Beijing’s strengths. With developing nations like Zambia and Sri Lanka defaulting on their debt, countries buoyed by oil reserves seemed an attractive bet.
That strategy has sent Chinese investment and construction in the Middle East growing at the fastest pace of anywhere in the world in recent years, transforming the region into a key beneficiary of Xi’s flagship Belt and Road Initiative. China is outcompeting the US as a regional financier. Between 2014 and 2023, Beijing provided about $2.34 for every dollar Washington donated or lent to Middle East countries, according to AidData’s Executive Director Brad Parks.