The Strait of Hormuz pain has been China’s gain, The Asia Group says

China stands to gain the most from disruptions in the Strait of Hormuz, a strategic waterway for global energy trade, according to a report by The Asia Group. The advisory firm notes that while the stoppage of crude oil and other commodities from the Middle East has unevenly impacted Asian economies heavily dependent on imports, China's ability to diversify its energy sources and utilize emergency reserves has provided it with strategic advantages.

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China has emerged as the main beneficiary of the Strait of Hormuz closure, according to Washington D.C.-based strategic advisory firm The Asia Group.

The report highlights that China has helped mitigate the global oil shock, seen a surge in its clean energy technology exports, and positioned itself as a potential leader in resolving global conflicts, contrasting this with U.S. influence. However, the analysis also cautions that sustained energy shortages could still pose risks to China. These include higher material prices and a broader global economic slowdown, which would reduce demand for Chinese exports at a time when the economy increasingly relies on them for growth.

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China has helped cushion the global oil shock, seen its clean energy tech exports surge and framed the war in Iran as another example in which Chinese leadership could supersede the US in ending global conflicts.

Despite these potential challenges, The Asia Group concludes that China is well-positioned to navigate further macroeconomic volatility. The firm's assessment suggests that China's strategic energy management and its role in the clean energy sector provide a buffer against the disruptive effects of the crisis.

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If the energy shortages persist, China may still suffer further from higher material prices and a broader global economic slowdown, which would hit demand for Chinese exports at a time when the economy has become increasingly reliant on them to maintain growth.