China's moment for action?

As Israeli-American military firepower brutally targets innocent civilians in Iran, one wonders if China will use its economic and technological might to halt this unjust campaign. Will two wars on Iran within nine months (June 2025 and March 2026) prompt China to step out of its traditional policy of restraint, anchored in peaceful conflict resolution, avoidance of confrontation and non-interference? Or are Russia and China, two of the five UN Security Council members, waiting to intervene before the world plunges into perpetual uncertainty?

The events, especially since the post October 2023 Israeli genocide in Gaza, make it clear that moralistic positions alone are ineffective. They failed to prevent the murder of over 72,000 Palestinians and could not prevent the displacement of nearly two million Gazans. Nor could these positions prevent invasion of Venezuela and Iran. Aggressive economic and defence tools are most probably the best way to challenge self-serving military invasions.

Moral appeals for restraint and de-escalation are essential part of international conflict resolution, but as evidenced by the Gaza crisis and the current war on Iran, they are insufficient to prevent, stop or comprehend a multidimensional geopolitical crisis stemming from the self-righteous conduct of two states.

Moral exhortations can't neutralise or shield against deception. The attack on Iran occurred during an ongoing diplomatic process, raising questions about the moral weight of subsequent calls for negotiations and ceasefire from Iran. The Israel-US administrations are responsible for the trigger and termination of hostilities, not Iran, which is only responding to aggression.

The enormous uncertainty brought about by the invasion of Iran, including financial strains, business disruption and political crisis, is alarming and precipitated by ostensible false-flag operations to drag regional countries into a confrontation with Iran.

An open letter addressed to Donald Trump (via X) by a Dubai billionaire Khalaf Al Habtoor, the founder of Al Habtoor Group, illustrates the enormity of the present debilitating crisis.

"You have placed the GCC countries and the Arab world at the center of a danger they did not choose... We have armies and defense systems that protect our nations. But the question remains: who gave you the right to turn our region into a battlefield?" Al Habtoor asked.

A claim by The Kobeissi Letter via X @KobeissiLetter suggests the first sign of "Chinese Leverage" going operational. The post references a report in The Financial Times saying that major Gulf actors, including Saudi Arabia, the UAE, Kuwait and possibly Qatar, are discussing precautionary reviews of their overseas investments, particularly in the US. These countries collectively hold hundreds of billions of dollars in US financial markets and assets.

The risk-management review appears to be driven by the economic impact of the current conflict, including drone strikes affecting Qatar's LNG production, damage to Saudi and Bahrain's oil infrastructure, shipping disruptions in the Strait of Hormuz, declining tourism and aviation revenues, and rising defense spending in the Gulf.

Did China influence these countries into this precautionary review that could force Donald Trump to pursue diplomatic de-escalation with Iran?

Also, while China has been reducing its investments in US Treasury Bonds for years, is it now ready to deploy its leverage as a creditor?

China's long-term strategy is to reduce its dependence on the US dollar and elevate the role of its currency. It has cut its holdings of US Treasuries to under $800 billion, dropping from the largest sovereign holder to third place behind Japan and the UK. This aligns with Beijing's policy of internationalising the renminbi and weakening the dollar's dominance in global finance and sanctions.

A sudden mass sale of US Treasuries could destabilise US public finances, but it's unlikely because it would hurt China. Instead, Chinese state investors often indirectly buy Treasuries through global investors. China will likely keep gradually reducing reliance on the dollar while quietly challenging US financial dominance.

China, therefore, needs a more proactive approach to save the world from greater disruption and uncertainty caused by the neo-colonial mindset currently ruling the White House.

US actions are unhinged, disregarding its constitution, international law and morality. Sadly, even most Congressional members apparently endorse American-Israeli aggression because of interests tied to the corporate world, mostly led by the Jewish capital. Trump-led right-wing pro-Israel groups have no legal or physical obstacles in their path.

Given the gravity of the situation – and it is in direct conflict with China's principles of multi-polarity and rules-based order – China must lead by example, learning from recent years and shaping a world based on principles, and not thuggery. The world needs diplomatic and political roadblocks to the US, not just sermons.

US domestic political compulsions are not to hit at home only; they will likely spill over, endangering Chinese and other interests. The pacifist approach has failed. What will China do if the US continues scoring military victories? Watch as a silent spectator as the US weans one country after the other away from China?

The US and its allies are pursuing economic and strategic encirclement, including tariffs, financial sanctions, restrictions on Chinese companies and intimidation of countries with Chinese business stakes. Will China allow the US-led noose to tighten around it indefinitely or finally take up a more pronounced position and use geoeconomic tools to forestall the US-Israel coalition's militant expansion?