Closing the Strait of Hormuz benefited China, according to consultancy

China has emerged as the main beneficiary of the closure of the Strait of Hormuz, according to Washington-based strategic consultancy The Asia Group.

In a report published this week, the consultancy states that the interruption of the flow of crude oil and other commodities from the Middle East has unevenly affected the economies of Asia, which depend heavily on imports to meet their energy needs.

However, China's ability to diversify its energy supply and draw on strategic reserves has given the country advantages amid a crisis that has caused widespread destabilization, according to The Asia Group.

China also helped cushion the global oil shock, saw exports of clean energy technologies grow, and began to portray the war in Iran as yet another example in which Chinese leadership could surpass that of the United States in resolving global conflicts.

"From an economic and geopolitical perspective, Beijing is using the crisis to promote China as the stable partner of choice," wrote The Asia Group. "Beijing sees the crisis as the ultimate validation of its strategy of industrial self-sufficiency."

If energy shortages persist, China could still suffer from rising raw material prices and a broader slowdown in the global economy, which would reduce demand for Chinese exports at a time when the country is increasingly dependent on them to sustain economic growth.

Still, The Asia Group assesses that China is well positioned to weather a prolonged period of macroeconomic volatility.

"This is a problem to be managed, not a crisis", concluded the consultancy.

Why is the Strait of Hormuz so important to the world economy?

Source: CNN