Chinese trilemma

The Strait of Hormuz highlights a clear asymmetry: the US is largely insulated, Europe moderately exposed, and Asia highly dependent—China and India most of all.

As political economist Shirley Ze Yu argues, China is caught in a trilemma it cannot escape: it cannot afford an Iranian victory, it cannot afford an Iranian defeat, and it cannot afford to stand aside.

An Iranian escalation disrupting energy flows would trigger an immediate shock to China’s economy. An Iranian defeat would reinforce a US-led regional order, weakening China’s strategic position across energy, trade and influence.

No easy alternative exists. China cannot pivot to US energy without creating a dependency no major power would accept.

The least-bad option is therefore diplomatic: preserve stability, keep Hormuz open, and position itself as a balancing force in a multipolar system.

China is not playing for victory—but for equilibrium.