China is emerging as a winner from Iran war volatility, says veteran strategist

By Jules Rimmer

China's surge in its renewable energy capacity has proven to be far-sighted

China and Iran signed an economic cooperation pact in 2021, and Iran has continued sending oil China's way during the conflict.

As the risks of global recession rise with each passing day the war continues and oil prices remain elevated, China is emerging as one of the relative winners from the current geopolitical volatility, according to a veteran Wall Street strategist.

China's strategic relationship with Tehran and its recent push into renewable energy are helping to shield its economy from the worst of the war in the Middle East that is troubling investors.

This relative insulation was highlighted in the daily market bulletin published by the well-regarded, veteran strategist David Rosenberg, the founder and president of Rosenberg Research.

China, Rosenberg observes" is in a league of its own in clean energy" with $1 trillion of investment in the sector in 2025 alone. China now has 38 nuclear reactor units under construction and is on schedule to exceed the U.S. capacity by 2030. China has also made extensive progress with solar and wind energy. By reducing its reliance on fossil fuels, China is therefore less impacted than many major economies by this sudden spike in energy prices caused by the effective closure of the Strait of Hormuz.

China invested almost $1 trillion in renewable energies in 2025 alone

That said, there are a few ships that appear to be managing safe transit through the strait, and some of them are heading to China. This is one benefit of China's longstanding alliance or economic cooperation with the regime in Tehran. Tankers destined for the West may not be allowed secure passage but those heading to China seem to be less threatened.

But it's not just the conflict in the Middle East where Rosenberg sees China's competitive advantage. Its macro-economic data seem to be improving with stronger-than-expected industrial production (+6.3% year-over-year) and retail sales figures (+2.8% year-over-year) for January-February released Monday. Deflation is starting to ebb, he points out. Rosenberg regards China's as a victor in the trade war with America so far, by virtue of the $1.2 trillion trade surplus it recorded in 2025. Moreover it is "gaining serious ground" in the hotly-contested competition for AI supremacy.

Rosenberg sees these factors as providing President Xi Jinping with a distinct advantage as he heads into negotiations with President Trump at the summit that was planned for March 31 in Beijing but now appears to have been delayed for approximately a month.

The Shanghai Composite Index CN:SHCOMP has made a pedestrian start to 2026, rising 2% so far but volatility is demonstrably less than the S&P 500 SPX which is currently showing a decline of 2%. The iShares MSCI China ETF MCHI has also dropped 2% this year.

-Jules Rimmer

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03-17-26 0728ET