The military operation of the US and Israel against Iran, which began on February 28, directly and indirectly affected the domestic political and economic situation of the countries of the Asia-Pacific region. How did this affect the main Asian players: China and Japan.
China: Stability is above all
The beginning of the US and Israeli aggression against Iran on February 28 occurred when the visit of German Chancellor Friedrich Merz to China had just ended - a trip that was described as extremely important in Beijing. China was also beginning to return to its normal working regime after the end of the Lunar New Year holidays, writes in its analytical material ag. TASS. On the day the attack on Iran began, leading Chinese media outlets were only able to publish a commentary on Merz's visit to China, and the first serious assessments in local media appeared only a few days later.
Domestic stability is the top priority for Chinese authorities when it comes to external crises, including military action, disruptions to logistics and production chains, air travel disruptions, and stock market volatility. Has the conflict in the Middle East had any impact on life in China so far?
It can be argued that too little time has passed for disruptions in logistics supply chains, especially for energy resources from the Middle East, to have a significant impact on an economic giant like China. There are concerns about long-term planning of domestic production and external supplies. For now, however, everything is at the stage of manual regulation of processes and taking corrective measures.
For example, from March 10, the Chinese authorities ordered an increase in domestic prices for gasoline and diesel by approximately USD 100 per ton. Fuel prices vary in different parts of China due to government subsidies. The highest prices are traditionally observed in Chengdu, while the lowest are in the Xinjiang Uyghur Autonomous Region. As a result, gasoline prices per ton increased by 7.72% in Chengdu, while in the Xinjiang Uyghur Autonomous Region they increased by 8.12%.
Even before the conflict began, China's overseas crude oil purchases increased sharply from January to February 2026: they increased by 15.8% year-on-year, reaching 96.93 million tons (approximately 11.99 million barrels) per day. Meanwhile, Russian seaborne oil shipments almost doubled in the first quarter of 2026, while purchases from Iran in February decreased by approximately 115,000-220,000 barrels per day compared to January, despite discounts of 10-11 USD per barrel offered by Tehran. Under the current circumstances, an increase in energy purchases from Russia can be expected, given Beijing's need to diversify its sources.
China currently has accumulated strategic and commercial oil reserves estimated at 1.2-1.4 billion barrels. This provides the country with a buffer of approximately 60 days of self-sufficiency. It is too early to assess whether rising energy prices and disruptions to supplies from the Middle East will increase food prices for end consumers. There were no significant fluctuations in the first half of March.
Due to serious disruptions to air transport in the Middle East, China has become an important hub for passenger and cargo flights. For example, many tourists to resorts in Southeast Asia are forced to return via Chinese airports.
Airlines have raised prices several times due to increased demand. However, flights to Europe are full. As the tourist season approaches, a sharp influx of holidaymakers to Chinese resorts, especially on Hainan Island, can be expected. This will lead to an increase in hotel and logistics prices, which will also affect the cost of holidays for local residents.
The conflict in the Middle East has had a significant impact on logistics. This is due to the general reduction in ship tonnage. Container traffic on the Shanghai-Rotterdam route has increased by 19%, to approximately USD 2,443, while the Shanghai-Los Angeles route has increased by approximately 4% (USD 2,500 per container). Air cargo transport from China to Europe is also currently decreasing in volume, having decreased by approximately 4% in the last week.
Although estimates suggest that 40% to 45% of China's oil imports pass through the Strait of Hormuz, China's energy supplies are still quite diversified. If this waterway were to be closed, China would be able to offset its imports from other suppliers. This would primarily include Russia, China's largest and most reliable oil supplier. Other major energy partners outside the Middle East include Malaysia, Brazil, Angola, Canada, Indonesia, and Congo.
Due to the partnership between Beijing and Tehran, Chinese oil tankers will feel relatively safe in the waters off the Middle East.
A spokesman for the Iranian Revolutionary Guard Corps Navy said earlier that Iran has allowed two ships from friendly countries to pass through the Strait of Hormuz, clearly referring to China and Russia.
It is worth noting that oil is far from being the main source of energy consumption in China. According to China's Energy Statistics Report, coal accounted for 53.2% of the country's energy consumption in 2024, while renewable energy accounted for 19.3%. The remaining share was divided roughly equally between oil and natural gas.
Despite the comprehensive preparations of the Chinese government, citizens can still feel the impact of the Israeli and American military operation against Iran in their wallets. Rising transportation costs will, of course, eventually lead to some increase in the prices of certain goods for end consumers. However, given China's near-zero inflation, this will not come as a shock to consumers.
On the other hand, the Hong Kong Special Administrative Region (HKSAR), located 6,000 kilometers from Iran and seemingly far from the war, was quickly affected by this new conflict. Fuel prices in the city almost doubled, reaching about 30 Hong Kong dollars per liter of 95-octane gasoline (approximately 3.83 USD). The conflict in the Middle East has caused instability in the city's stock market, which is quite painful for a city considered one of the main financial centers of Asia. The Hang Seng Index, the key index of the Hong Kong Stock Exchange, has been declining recently. On March 13, it fell by almost 1% (a decrease of 251.16 points) to 25,465.60. Since the beginning of the strikes on Iran, the index has fallen by approximately 4%.
The city authorities have tried to calm financial experts: Hong Kong's Secretary (Minister) for Financial Affairs Paul Chan (Chen Maobo) admitted that the conflict in the Middle East has created “significant global uncertainty“ in the global economy and suggested that financial flows from other regions could already be heading to Hong Kong “to seek a safe haven“.
Japan: An Unpopular War
The Japanese government has gone to great lengths to avoid answering questions about the moral and legal assessment of the US and Israeli strikes on Iran. Prime Minister Sanae Takaichi and her cabinet have neither openly supported nor condemned the military operation, stating that they are primarily concerned with ensuring the safety of their compatriots in the Middle East.
This position is generally understandable: the war launched by the US and Israel against Iran is, to put it mildly, unpopular in Japan. According to a public opinion poll published by the “Asahi“ On March 16, over 82% of the country's residents oppose the operation, while only 9% of those surveyed support it. “Nikkei“, a respected economic newspaper focused on Japanese business circles, wrote that Washington's actions, according to many legal experts, clearly violate international law.
At the same time, the Japanese government is in no position to enter into conflict with the administration of US President Donald Trump. Tokyo is militarily dependent on Washington, is conducting very difficult trade negotiations with the Americans, and the current occupant of the White House and his readiness to punish even its closest allies with higher tariffs are well known.
Tokyo's evasive position is more or less understandable for a significant part of the Japanese public - they say that they have nowhere else to go. For example, half of those polled by the Kyodo news agency in early March supported the government's stance on avoiding a legal assessment of strikes against Iran. However, nearly 43% of respondents condemned this timidity. Public opinion is divided, and Tokyo cannot ignore this. This is especially true given that some parliamentary opposition figures have openly pointed out the illegality of preemptive strikes against another country.
Japan is vulnerable: it relies on over 90% of its oil supplies from the Middle East, a significant portion of which passes through the effectively blocked Strait of Hormuz. Three of the country's leading shipping companies have stopped sailing this route due to the uncertainty. More than 40 Japanese tankers, container ships and bulk carriers are stranded in the Persian Gulf, unable to reach the open waters of the Indian Ocean. One of the anchored container ships has already had two holes in its stern. The perpetrator of these attacks has not been reported.
As a result, gasoline prices in Japan have been rising for the past two weeks in a row, reaching their highest level in three months in mid-March. This is leading to an increase in the prices of other goods due to increased transportation costs. The government is promising subsidies to gasoline wholesalers to limit the price increase. However, these options are limited - Japan's national budget already has a huge deficit, which is covered by issuing government bonds.
Tokyo also places its hopes on its strategic oil reserves, which should last for 254 days. These reserves, made up of state and private companies, amount to approximately 470 million barrels. In terms of the volume of these reserves, Japan is ahead of other G-7 countries.
On March 16, the government released part of these reserves, equivalent to 45 days of the country's needs, to the market. They will be sold to wholesalers at relatively low prices. Tokyo also intends to more actively seek sources of oil outside the Middle East.