Conflict involving Iran and repeated disruption to shipping through the Strait of Hormuz sent fresh shockwaves through global markets, pushing up energy prices and disrupting supply chains. The effects spread well beyond oil markets. Manufacturers faced shortages of critical industrial materials, governments struggled with rising costs, and businesses dealt with higher transport expenses.
According to The New York Times, China emerged in a stronger position than many other Asian economies, relying on strategic planning, state support, and its growing clean energy industry to reduce the impact of the crisis.
Why the Strait of Hormuz Matters
The Strait of Hormuz is one of the world's most important energy routes. Roughly one-fifth to one-quarter of global crude oil and liquefied natural gas shipments pass through the narrow waterway. Any disruption quickly affects global trade.
The crisis also disrupted supplies of naphtha, helium, and sulphur. These materials are essential for industries including plastics, chemicals, semiconductor manufacturing, electric vehicle batteries, and advanced electronics.
The report said Asia imports nearly 80 per cent of its oil and about 90 per cent of its liquefied natural gas from the Middle East, making the region especially vulnerable to prolonged disruption.
China Relied on Reserves and Government Support
China is one of the world's largest manufacturing economies and has substantial energy needs. Even so, it avoided many of the inflationary pressures experienced elsewhere in Asia. The New York Times, citing analysis by The Asia Group, reported that China's strategic oil and gas reserves, expanding renewable energy capacity and domestic energy production helped reduce the immediate impact of higher global energy prices.
The report added that Beijing also used price controls and other state measures to protect businesses and consumers from the sharp rise in energy costs. Those policies helped keep factories operating while many neighbouring economies faced greater disruption.
Clean Energy Added Another Advantage
The crisis also increased interest in renewable energy technologies. As countries looked to reduce dependence on volatile fossil fuel supply chains, demand grew for solar panels, batteries, and electric vehicles.
China remains the world's largest producer of all three. Kurt Campbell, chairman and co-founder of The Asia Group, said China had invested for years in industries that are becoming increasingly important as countries expand clean energy infrastructure. The report noted that stronger global demand has further reinforced the position of Chinese manufacturers.
Other Asian Economies Faced Greater Pressure
The economic picture looked different elsewhere in Asia. India experienced higher fuel, fertiliser, and food prices, placing additional pressure on consumers and policymakers. The report also noted that higher fertiliser costs, combined with concerns over weaker monsoon conditions, could affect agriculture, which employs a significant share of the country's workforce. Japan also came under pressure as rising fuel subsidies increased government spending. Shortages of aluminium and naphtha disrupted parts of the country's automotive industry.
Across Southeast Asia, the effects were even more visible. The Philippines declared a national energy emergency and experienced labour strikes linked to rising energy costs. Indonesia's nickel producers reduced output because of shortages of sulphuric acid, while higher airfares affected tourism in Bali. The report also said several Southeast Asian countries increased imports of Chinese solar panels, battery systems, and electric vehicles.
The Crisis May Strengthen China's Position
Beyond the immediate economic effects, the disruption could also influence global manufacturing. The report suggested that higher production costs across parts of Southeast Asia may reduce the competitiveness of alternative manufacturing hubs as multinational companies continue reviewing their supply chains.
It also noted that Beijing has presented itself as a stable manufacturing and trading partner during a period of continued geopolitical uncertainty.
Uncertainty Continues
Although the Trump administration has said progress has been made towards easing tensions between Washington and Tehran, uncertainty remains. Shipping through the Strait of Hormuz has partially resumed, but higher insurance costs, rerouted cargo, and continuing geopolitical risks are expected to keep pressure on global trade.
For many countries, the crisis exposed the risks of relying heavily on a single energy corridor. For China, the report concluded that strategic energy reserves, government support, and long-term investment in clean energy industries helped reduce the impact of one of the world's most significant energy disruptions while strengthening its position in key manufacturing sectors.
