China is predicted to avoid a direct war with the US by playing both sides. It will likely strike transactional economic deals with America to protect its interests while simultaneously providing financial support to Russia, maintaining a non-aligned but influential position.

Despite being Iran's ally, China is highly vulnerable to a prolonged Hormuz crisis. If the economic damage becomes severe enough, China may be forced into an ironic alliance with the US to resolve the conflict, prioritizing its own stability over its geopolitical partnership with Iran.

China is the biggest winner of the conflict, watching its strategic rival, Russia, "bleed itself away" while remaining bogged down. It also profits financially, as 90% of the components for Ukraine's seven million annual drones are sourced from China, showcasing its critical role in the global supply chain.

China maintains a strategic petroleum reserve covering over 120 days of imports, exceeding the 90-day international standard. This massive stockpile is not just for economic stability but is a key national security measure, driven by long-standing fears that the U.S. Navy could cut off its seaborne oil supplies during a conflict.

China has stockpiled approximately three to four months' worth of crude oil. This strategic reserve, combined with its ability to shift from natural gas to coal, gives it significant versatility and reduces its vulnerability to supply disruptions from conflicts in the Straits of Hormuz.

China is playing a dual game: using missile tests to deter geopolitical alliances like the Quad, while simultaneously deepening its economic indispensability through a massive trade surplus with Europe. This strategy aims to maintain its influence by being too threatening to challenge militarily and too integrated to sanction economically.

China is waging economic, not military, war. By creating its own self-sufficient tech ecosystem and offering cheaper alternatives globally, it aims to break the world's reliance on the American tech monopoly and peel away its economic allies.

While the Iran conflict creates short-term economic pain for China, it powerfully validates its long-term strategy. The disruption in the Strait of Hormuz highlights the vulnerability of oil dependency, making China's massive, state-led investments in electrification, solar, and batteries appear exceptionally prescient and strategic.

Chinese leadership's greatest fear is its dependence on global trade for resources and markets, seeing it as a primary vulnerability in a conflict with the US. Policies promoting energy independence, like massive coal and solar investments, are direct attempts to escape this strategic trap.