Behind China’s Support for the UAE on the Iranian Islands Issue

China’s declaration of support for the UAE’s stance on the three islands has highlighted the question of why Beijing, and occasionally Moscow, allow themselves to express such positions concerning Iran’s territorial sovereignty.

According to Rokna, in a statement released following a meeting between China’s Foreign Minister Wang Yi and his Emirati counterpart in Abu Dhabi on December 12–13, China reiterated its support for the “peaceful efforts of the United Arab Emirates to resolve the issue of Greater Tunb, Lesser Tunb, and Abu Musa islands through bilateral dialogues in accordance with the UN Charter and international law,” a position in complete opposition to Iran’s stance.

Economic Interests at Stake

China and the UAE maintain extensive bilateral trade relations. According to China’s Ministry of Foreign Affairs, the UAE is China’s top export market, its second-largest trading partner in the Middle East, and its primary non-oil trade partner. Trade volume between the two countries reached approximately $102 billion in 2024. With 6.3% of total foreign investment in the UAE, China ranks as the fourth-largest direct foreign investor, after the United Kingdom, the United States, and Italy. While precise figures for UAE investment in China are unclear, a February 2024 report on a bilateral meeting between the UAE Minister of Economy and Tourism and China’s Commerce Minister noted $15 billion in capital exchange between the two countries in 2022.

2025 Official UAE Investment Report

The UAE is China’s sixth-largest oil supplier, but trade relations extend beyond petroleum. The two countries collaborate across industrial high-tech, artificial intelligence, communications, electronics, transportation, clean energy, and real estate. These figures pertain solely to the UAE; China’s trade with all Gulf Cooperation Council countries is estimated at $288–299 billion in 2024, with the UAE and Saudi Arabia representing the largest shares.

According to China’s Xinhua News Agency, 824,000 Chinese tourists visited the UAE in 2024, marking a 31% increase from previous figures. The UAE was the first Middle Eastern country to sign a comprehensive reciprocal visa exemption agreement with China, effective since 2018.

Iran–China Relations

China is the exclusive buyer of Iranian oil under sanctions, sold unofficially. According to China’s Ministry of Foreign Affairs, trade between Iran and China amounted to $13.37 billion in 2024. Due to sanctions, financial transactions between Iran and China do not occur through the formal international banking network, and the data are not transparent. Oil revenues reach Iran via established networks or in-kind payments.

Chinese investments in Iran also face challenges. Economic media highlight “letter-of-credit issues, lack of export insurance coverage, U.S. sanctions, FATF blacklist inclusion, and Chinese bank risks” as major obstacles. A 25-year agreement signed in 2021 reportedly included $400 billion in potential Chinese investment in Iran; however, the latest available report (IRNA, 2023) indicates China has invested $2 billion in Iran.

Under these circumstances, China considers itself supporting a “peaceful resolution” of the dispute, whereas from Iran’s perspective, there is no dispute requiring negotiation; rather, it is an unfounded claim by the Gulf countries.