According to a wide range of official data, the Middle East has emerged as a prime destination for China’s Belt and Road Initiative (BRI). Cumulative investments and construction contracts in the region now stand at approximately $3.5 trillion. Saudi Arabia, Iraq, Egypt and the UAE are the largest recipients, with BRI investments focused primarily on energy security, traditional infrastructure and green energy reshaping the landscapes of their economies, communities and enterprises alike.
However, the war and kinetic conflict between the United States and Iran in 2026 severely damaged the geopolitical equilibrium of the Middle East and geoeconomics became its foremost casualty. Economic security has therefore once again surfaced as a critical issue, one that Chinese policymakers must address through a holistic and comprehensive roadmap. This requires readjusting investment priorities and engagement strategies and reshaping both within a sustainable safety and security paradigm for the period ahead.
Fortunately, the first round of high-level talks between Iran and the United States in Switzerland has concluded, with the two sides agreeing on a roadmap toward a final deal to end their more than 100-day war. Moreover, during these marathon talks, Iran and the US agreed to establish communication lines to keep the vital Strait of Hormuz open and to end the fighting in Lebanon.
Pakistan stated that negotiators had reached agreement on a “roadmap towards reaching a final deal within 60 days,” with technical talks set to continue for the rest of the week at the Swiss resort of Bürgenstock. Encouraging progress has thus been made, including the creation of a mechanism for further technical discussions, detailing a dedicated contact channel to “avoid incidents and miscommunication” over the Strait of Hormuz.
Additionally, the formation of a “deconfliction cell” involving the parties and authorities in Lebanon has been agreed upon to prevent fighting from erupting there again a good omen for achieving the desired goals of a US-Iran peace deal. Mediators described the first round of talks in Switzerland as positive and constructive, with working groups already established by the negotiators.
According to many regional security experts, the US-Iran war is accelerating the realization of the India-Middle East-Europe Economic Corridor, because the future of Middle Eastern wealth and energy resources should no longer rely disproportionately on controlling the vulnerable waters of the Gulf but rather on securing the overland, technologically integrated corridors of tomorrow. However, drastic change in the new Middle East’s geopolitics and geoeconomics it has very weak prospects.
At the same time, the present conflict in the Middle East is forcing Beijing to confront a different problem: physical risks to the infrastructure into which the BRI has poured massive investments. Analytically, even before the outbreak of conflict between Israel, the US and Iran, security had been a growing problem for the BRI worldwide due to a complex web of proxies. Suicide attacks on Chinese personnel in Afghanistan, Tajikistan and along Pakistan’s CPEC, persistent insecurity around Chinese-backed projects in various African countries, institutional discrimination in Latin America and the disruption of land trade routes following the Russia-Ukraine war had already compelled Beijing to grapple with security challenges.
According to numerous independent sources, China’s direct investment in the Middle East reached roughly $89 billion between 2019 and 2024. Energy terminals, seaports and logistics corridors in Qatar, the UAE and Oman now sit inside or near active conflict zones.
A comparative study suggests that at least 18 Chinese-financed projects across six countries in the region are either affected or at serious risk, with loans behind them totaling over $6.5 billion. Three sites were struck directly, including Dubai International Airport, Qatar’s Ras Laffan gas facility and Oman’s Duqm Port.
When the Belt and Road Initiative was first proposed in 2013, it was hailed as a historical tribute to the ancient Silk Road. However, it is now clear that the BRI has evolved into something far more modern and complex. What began as a vision for physical roads and maritime routes has matured into a sophisticated framework for technology, green energy and cooperation. For the Middle East, a region that has always served as a bridge between East and West, the BRI has provided a new pathway for modernization.
Realistically, China’s cooperation with the Middle East has supplied steady energy sources for its massive industrial growth. In the early years of the BRI, almost 60 percent of Chinese investment in the region was focused on this traditional energy sector. Countries like Saudi Arabia and the United Arab Emirates are now integrating Chinese green technology into their national grids under the BRI framework. Massive solar parks in the desert and new hydrogen research facilities are being built with Chinese technical expertise in different countries across the region. With Chinese wisdom, the BRI is also an important participant in clean power innovation.
By 2026, the digital footprint of the BRI is visible in nearly every major Middle Eastern city. Chinese technology providers have become essential partners in building the region’s telecommunications systems. From 5G networks and submarine fiber-optic cables to cloud computing and artificial intelligence, this partnership is helping the Middle East achieve strategic autonomy. By building high-tech infrastructure with Chinese hardware and software, regional countries are diversifying their economies and moving away from over-reliance on oil. The construction of smart city projects in Egypt and new digital finance hubs in the Gulf has further enhanced the strategic value of the BRI, providing the digital foundation for local startups to compete on a global stage.
In summary, China emerges as a key strategic and economic beneficiary of the June 2026 US-Iran peace deal. The reopening of the Strait of Hormuz and de-escalation of conflict stabilize Beijing’s Belt and Road Initiative (BRI) across the Middle East, securing vital energy flows of Iranian crude essential for China’s industrial growth. The agreement’s reconstruction framework for Iran further strengthens opportunities for Chinese firms already embedded in its infrastructure through long-term partnerships. With active hostilities ending, Beijing is well placed to accelerate both terrestrial and maritime BRI networks across the Persian Gulf, deepening cooperation with Iran and GCC states, aligned with its 15th Five-Year Plan and broader goals of modernization, digitalization, green growth, quantum technologies and AI-driven development.
Last but not least, as Pakistan has become an integral part of Middle Eastern security, policymakers in China and Pakistan should consider further strengthening of CPEC into West Asia, connecting the Middle East, Central Asia, Africa and beyond
