The Iran war has caused a profound and systemic upheaval in the Persian Gulf, fundamentally challenging two assumptions that have underpinned regional stability for the better part of a century.
For decades, the Gulf’s economic model thrived on a perception of stability, reinforced by driving factors such as tax exemptions, flexible regulatory regimes and a dynamic and diverse startup ecosystem.
At the same time, the region’s security architecture rested on a traditional oil-for-security arrangement maintained by a dense network of US military bases and installations.
However, both pillars have been materially weakened by nearly two months of war, during which missile and drone attacks have targeted all the Gulf states. This reality has led to a painful phase of strategic reassessment of Washington’s credibility as a guarantor of security, forcing regional capitals to look to the East with new urgency.
In this post-war period, a turn to diversification seems not only plausible, but increasingly necessary for survival. China, whose economic footprint in the Persian Gulf has expanded significantly through trade, investment and infrastructure engagement, stands out as the most logical partner for deepening ties.
While the relationship is not without limitations, the sheer scale of Chinese economic involvement provides a gravitas that is becoming impossible to ignore. In 2023, after Xi Jinping’s historic visit to Riyadh for the Gulf Cooperation Council (GCC) Summit, the partnership began to emerge as a comprehensive strategic outreach.
Last year, multilateral trade between China and the GCC REACHED around US$300 billion, underscoring China’s position as the region’s leading trading partner. While historically these investments remained limited to the energy sector and port projects, the post-war environment is prompting both sides to explore much deeper integration.
The future of this economic partnership is likely to be determined by three critical sectors where Chinese dominance and Gulf capital find a natural synergy. The first is green energy, an area where China is currently the undisputed leader over 80% of global solar generation capacity.
China’s exports of wind turbine generators jumped around 50% in 2025, and its dominance of the EV market, which now accounts for 70% of global productionit is in line with the long-term objectives of the Gulf countries trying to move away from reliance on hydrocarbons.
For the Gulf, partnering with Chinese firms is about providing the technology needed to transform their energy grids and transport sectors with Chinese brands such as BYD, Geely and Changan.
The second area of cooperation is being facilitated by the expansion of the BRICS+ framework, which provides a platform for financial integration that may ultimately serve as a bulwark against the Western financial system. Although the transition to a fully yuan-based trading system is difficult due to the hegemonic nature of the petrodollar, new mechanisms are already being tested.
For example, The mBridge Projectincluding the central banks of China and the United Arab Emirates, is experimenting with a digital currency platform to settle cross-border payments without western intermediary banks. Such experiments allow the Gulf to diversify its financial risk while maintaining traditional ties.
The third area for cooperation is found in China’s flagship connectivity project, the China-Pakistan Economic Corridor (CPEC). This project represents an investment of about 62 billion dollars and serves as a key tool to circumvent the Malacca dilemma, the strategic vulnerability in which about 80% China’s oil imports must pass through the Straits of Malacca.
By investing in CPEC and Gwadar Port, Gulf countries can develop arrangements that integrate their sea routes with land corridors in Central Asia. This allows the Gulf states to position themselves as the central hub of a new multipolar trade map, especially as China continues to imports 42% of its crude oil from the Middle East, with Saudi Arabia providing 14% and the United Arab Emirates 7% in 2025.
However, it is important to recognize that this growing closeness has clear limits, especially when considering the large structural disparity in military engagements. The postwar context has provided a wake-up call, but this should not be confused with a desire to completely replace the United States with China.
The Gulf leadership is too pragmatic to exchange one form of dependence for another, and the security field remains the most important obstacle. The US maintains a formidable presence of some 40,000 to 50,000 personnel in approximately ten countries in the region, with Al Udeid Air Base in Qatar hosting just over 10,000 troops.
In contrast, China’s military presence is limited to a single logistical support base in Djibouti, underscoring Beijing’s traditional foreign policy of non-intervention. Even in defense procurement, the figures highlight a gap that cannot be bridged quickly. While China has become a more prominent arms exporter, it still ranks far behind the US in regional market share.
According to SPIRITThe US accounted for 54% of all arms imports to the Middle East between 2021 and 2025, with Saudi Arabia serving as its largest global recipient, receiving 12% of total US exports.
In comparison, Chinese arms exports to the region between 2016 and 2025 were estimated at about 732 million TIV (a unique SIPRI index for calculating trends in defense exports known as the Trend Indicator Value), which was a mere fraction of the $19.5 billion TIV exported by the US over the same time frame.
While Chinese drones are attractive for their lack of political strings, they still do not offer the integrated air defense systems that the US military offers.
The postwar reality is not about a radical shift from Washington to Beijing. It is about seeking strategic autonomy as a middle power. The Gulf states see China not as the new America, but as a necessary protection. By diversifying their security and economic portfolios, they are opting for a multi-polar insurance policy that is far less risky than relying on a single, lumpy umbrella.
Nor is the logic of finding alternatives to Western dominance for replacement; it is about building a more resilient, multipolar foundation that is less expensive and more profitable for the region’s long-term survival. This shift to the East is a calculated, pragmatic response to a changing global order where the old certainties of the oil-for-security pact seem to no longer exist.
Burak Elmali is a researcher at the TRT World Research Center in Istanbul, Turkey.
