China urges US and Iran to show restraint, rejects sanctions approach

China maintains support for diplomatic resolution to US-Iran conflict, amid escalation of tensions. Vice Foreign Minister Miao Deyu announced China's commitment to peace talks during a meeting with Iran's Deputy Foreign Minister Kazem Gharibabadi in Beijing on August 17, according to a statement released on August 18. China's Foreign Ministry had previously remained silent on the matter, releasing the information almost a week later.

The meeting comes a day before U.S. Treasury Secretary Scott Bessent announces measures to isolate Iran economically, potentially shifting the conflict from targeted strikes to a full-blown economic embargo. Iran's oil purchases largely come from China, making it the country's second-largest trading partner in 2025, behind the United Arab Emirates.

China responded to U.S. threats by asserting that sanctions and pressure would not work and called for a diplomatic solution. Iran dismissed Trump's threats as a "diversion" from the country's problems with debt and high interest rates. The situation may pose challenges for upcoming Chinese President Xi Jinping's visit to Washington, according to Wu Xinbo, director of Fudan University's Center for American Studies.

The Chinese government does not recognize unilateral sanctions, but its state-owned entities generally comply with U.S. sanctions to maintain access to the US dollar-clearing system. While some Chinese teapot refineries and firms have faced sanctions from Washington, major Chinese banks have generally avoided blacklisted oil, as they risk losing access to the US financial system.