Amid the West Asia conflict disrupting key maritime routes and energy flows, China and Pakistan have proposed a joint peace initiative — calling for a ceasefire, protection of commercial shipping, and dialogue through multilateral platforms.Announced earlier this week, it marks a shift in Beijing’s diplomatic posture. While China has so far limited itself to statements and selective engagement on the events unfolding in Iran, the proposal signals a more active, though cautious, role in crisis management.Coming more than a month into the war, the timing is significant. G Venkat Raman, a professor at IIM Indore, a Fulbright and Institute of Chinese Studies fellow, explains some of the major issues concerning China’s stakes and motivations, as well as the wider implications for global trade and geopolitics.What does the China-Pakistan peace plan propose, and what is its geopolitical significance?The joint proposal outlines a five-point broad framework for de-escalation, including humanitarian access and dialogue through multilateral platforms, particularly the United Nations, and emphasises sovereignty. While details remain limited, the plan focuses on stabilising maritime routes and preventing further escalation rather than offering a detailed political settlement, making it more a mechanism for crisis management than conflict resolution.The initiative reflects an attempt to expand the role of non-Western actors in managing regional crises. It signals a move toward Global South-led diplomacy, with China bringing institutional weight, including its position on the UN Security Council, and Pakistan offering regional access and political channels in the Islamic world.It is also tied to China’s economic and connectivity interests, particularly routes linking western China to the Arabian Sea and West Asia through the Gwadar port in Pakistan’s Balochistan. For instance, last year, a London-based think tank reported that China has overtaken the West as the largest trading partner with countries in the Gulf region (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE) for the first time in 2024. Their trade was valued at $257 billion.More broadly, it reflects a rebalancing of diplomatic roles, with China stepping into diplomatic spaces as the United States recalibrates its engagement, though without assuming direct security responsibilities.Story continues below this adWhat are China’s stakes in West Asia, and how has it used diplomacy in the region?China’s West Asia engagement has evolved from a largely economic presence to a more active diplomatic role in recent years, driven by its dependence on regional stability. It is a major importer of energy from both Iran and Saudi Arabia, and disruptions in chokepoints such as the Strait of Hormuz directly affect its growth and connectivity ambitions.Diplomatically, China has deepened ties with Iran through a long-term strategic cooperation agreement signed in 2021. Its credentials as a mediator were highlighted in 2023, when it facilitated the restoration of diplomatic ties between Iran and Saudi Arabia. Chinese Foreign Minister Wang Yi with leaders of Saudi Arabia and Iran in Beijing in 2023. (State media)Their engagement has grown more significant with the expansion of BRICS (initially comprising Brazil, Russia, India, China and South Africa), in which both countries are now members, giving Beijing an added institutional stake in ensuring that tensions do not undermine a platform it has actively promoted. The current initiative with Pakistan builds on this expanding diplomatic profile.Why might China have chosen to step in with this plan now?Story continues below this adChina’s move reflects a mix of economic pressures, diplomatic cues, and strategic calculation.Spillover effects on energy markets and trade flows have raised direct concerns, as disruptions in the Strait of Hormuz have affected supply chains, shipping costs, and price stability. As a critical chokepoint for industrial supply chains, its effective blockade is affecting the movement of raw materials and intermediate goods essential for manufacturing — a sector that has powered China’s growth for decades.Explained | China’s $1 trillion trade surplus as much ‘sign of imbalance as it is of strength’: an expert explainsHormuz-linked disruptions have disrupted energy and petrochemical inflows critical to sectors such as plastics and electronics. At the same time, instability in the Strait of Bab el-Mandeb, the gateway to the Red Sea and the Suez Canal, has slowed exports along the Asia–Europe route, hitting European markets whose biggest external supplier is China. Source: US Energy Information Administration.European markets are now structurally exposed to the re-timing of inbound manufactured goods, machinery, electronics, components, and consumer products from China. Shipping rerouting around the Cape of Good Hope has further increased transit times and freight rates. The combined effect is a dual chokepoint shock on China’s trade flows. Price volatility has also prompted tighter controls on the export of materials, such as fertilisers, to safeguard the domestic supply.Story continues below this adThe region also matters for China’s export connectivity, linking its goods to markets in West Asia and Africa, with instability threatening infrastructure investments. China’s emphasis on safe passage reflects its dependence on stable global trade flows, and prolonged disruptions risk slowing economic activity both domestically and globally.The move also follows renewed engagement with Pakistan, including a recent visit by Foreign Minister Ishaq Dar, which appears to have created an opening for China’s involvement.Despite China having diversified its energy sources by spreading its import dependence among countries and focusing on renewables, the continued instability threatens its regional economic stakes. This is particularly important for infrastructure and connectivity projects (such as the Belt and Road Initiative). The timing allows Beijing to signal a more active diplomatic role while avoiding deeper security commitments.Add to this the recent signals from the US, including remarks by President Donald Trump suggesting that regional actors should ensure the Strait of Hormuz remains open. They reflect a broader shift in American posture — with greater energy self-reliance domestically, Washington appears less directly exposed to disruptions in West Asian supply routes.Story continues below this adThey also suggest a recalibration of US leadership, from direct security provision to more selective engagement. Such shifts create space for other actors to step in diplomatically, and China’s initiative with Pakistan can be seen in this context as an effort to expand its role in regional crisis management. In that sense, the proposal reflects a gradual redistribution of diplomatic influence.Beyond Hormuz, why are concerns being raised about the Bab el-Mandeb Strait?The Houthis, an Iran-aligned group in Yemen, have been targeting vessels transiting the Bab el-Mandeb Strait — the gateway to the Red Sea and the Suez Canal — using drones and missiles. Shipping detours, rising freight and insurance costs, and strained supply chains are already evident.Also in Explained | As Yemen’s Houthis enter Iran war, all eyes now on Bab el-Mandeb StraitOn Saturday (April 4), MB Ghalibaf, Speaker of the Iranian Parliament, wrote in a post on X, “What share of global oil, LNG, wheat, rice, and fertilizer shipments transits the Bab-el-Mandeb Strait?” This is being read as Iran potentially threatening passage through the strait if the war continues.Crucially, even if tensions in Hormuz ease, there is no assurance that disruptions in Bab el-Mandeb will subside simultaneously, prolonging uncertainty for global shipping.Story continues below this adWhat lessons might China be drawing from Hormuz?For China, the current events have parallels to a core vulnerability, or the “Malacca dilemma,” as coined by then Chinese President Hu Jintao in 2003. It concerns the Strait of Malacca, one of the world’s most critical maritime chokepoints, located near Malaysia and Indonesia and carrying a large share of global trade between the Indian and Pacific Oceans.A significant portion of China’s energy imports and trade flows — and about a quarter of global trade — passes through it. In a potential crisis over the control of Taiwan, which China claims as its own territory, Beijing would face risks to its sea lines of communication, including external pressure that could affect trade and energy flows.A disruption here would have wider consequences than Hormuz, affecting both energy and manufacturing supply chains and forcing longer, costlier shipping routes. For China, then, the Hormuz experience reinforces the need to diversify routes and reduce dependence on vulnerable chokepoints.