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Loot a Burning House : China’s Lessons from the Iran War

Calculated Risk or Strategic Patience: Determining the Strategic Threshold for a Taiwan Strait Intervention

Foreign Affairs Review

The enemy advances, we retreat; the enemy camps, we harass; the enemy tires, we attack; the enemy retreats, we pursue.

- Mao Zedong

From the revolutionary isolation of Mao Zedong to the strategic internationalism of Xi Jinping, China’s grand strategy reflects a continuous process of calm observation, analysis of the international system, and adjustment to the international balance of forces. Chinese sources consistently emphasize that leaders must first assess the international structure, make judgements about the geopolitical trends, and only then determine policy. This approach is rooted in a strategic tradition that prioritizes avoiding confrontation, deceiving adversaries into complacency, and defeating a more powerful opponent by using the opponent’s own strength against him, without his knowing he is even in a contest. The well-known lesson in China from the Warring States period—“Never ask the weight of the emperor’s cauldrons”—captures this logic: a rising power must manipulate the perceptions of the dominant power and avoid provoking confrontation before the point of maximum opportunity. Only in the final phase of a power bid, when the dominant power is weakened and abandoned by its allies, does the rising challenger reveal its aims.

Hiding Capabilities and Biding Time

Historically, as the international order changed, Chinese strategy evolved from complete isolation to strategic cooperation with the U.S. against the Soviet Union, before entering a new phase after the trifecta: the collapse of the Soviet Union, the aftermath of the Tiananmen Square protests and massacre, and the overwhelming demonstration of American power in the Gulf War. These events reinforced the perception of U.S. dominance and China’s relative weakness. The result was the adoption of Tao Guang Yang Hui [韬光养晦], which emphasized hiding capabilities, biding time, and avoiding direct confrontation while building comprehensive national power. To avoid being encircled, as reflected in the logic of wei qi, China adopted a good-neighbour policy, multilateralism, and peripheral diplomacy. With more than fifteen countries bordering China, an aggressive posture would invite counterbalancing by neighboring states in alignment with a distant power. A defensive realist approach allowed China to maintain a relatively benign regional environment while continuing to rise. During this period, Chinese policy relied on calm observation of international crises and systematic analysis of U.S. military operations, extracting lessons without direct engagement.

The Gulf War and the Foundations of Asymmetric Maritime Strategy

The Gulf War, in 1990, produced a particularly important set of lessons. Chinese analysts examined how Iraqi mine warfare disrupted U.S. naval operations and damaged advanced warships. Large and expensive vessels such as the USS Tripoli and USS Princeton—the latter costing approximately $1 billion—were damaged by Iraqi mines costing only a few thousand dollars. Mines in the Gulf War cost as little as $10,000 yet inflicted $96 million in damage to US vessels. China watched these incidents with great interest and invested accordingly. Decades later, assessments indicate that China possesses a “robust mining capability,” with tens of thousands of sea mines. Chinese military lessons indicated mines were weapons through which weaker states could “repel strong ones.” They were “easy to lay, hard to sweep” [易布难扫], and capable of allowing “four ounces” to move “one thousand pounds” [四两可拨千斤]. These observations informed a broader doctrine centered on cost imposition and asymmetric warfare.

The Iranian Playbook

This Assassin's Mace ([杀手锏; Shashoujian) doctrine now finds contemporary relevance in the Iran conflict. Iran’s actions in the Strait of Hormuz demonstrate the operational effectiveness of asymmetric maritime strategies that rely on mines, limited interdiction, and geographic leverage. A relatively wealker power has been able to disrupt a critical chokepoint and impose costs on a superior adversary without achieving full control. The effectiveness of this approach lies in generating uncertainty, delaying operations, and raising the economic and military costs of intervention. These outcomes correspond closely to Chinese assessments of how a conflict with the United States would unfold.

Taiwan and the Logic of Blockade

Chinese military writings explicitly identify mine warfare as a central component of a Taiwan contingency. U.S. forces would depend on secure maritime supply lines, and mines could serve as a “fatal threat to U.S. seaborne transport.” The requirement to clear mines before conducting operations would impose delays and constrain U.S. responses. Historical experience reinforces this point: even under favorable conditions, clearing mines requires extended timeframes and significant resources. In the Taiwan Strait, these constraints would be magnified by geography and the scale of operations. China’s capabilities extend beyond those of Iran, including anti-ship ballistic missiles ASBMs and a wide range of naval mines, enabling it to execute a quarantine or blockade with greater effectiveness. By selectively restricting traffic rather than imposing a complete blockade, China could maintain limited commercial flows, reduce economic fallout, and complicate the legal and political basis for external intervention. Such a strategy would allow China to apply sustained pressure on Taiwan while leveraging the Taiwan Strait as a chokepoint—similar to Iran’s use of the Strait of Hormuz—to generate uncertainty, raise costs, and shape the conditions under which the United States and other actors respond, ultimately pushing them toward the negotiating table.

The Taiwan issue has remained the core issue of contention between China and the United States since the Mao era. For decades, the absence of diplomatic relations prevented meaningful engagement, with the United States maintaining embassies in Taipei rather than Beijing. The breakthrough came with the Shanghai Communiqué under Richard Nixon facilitated in part through Pakistan, which initiated rapprochement by bypassing the issue and establishing a framework of strategic ambiguity. This arrangement allowed the United States to acknowledge the Chinese position while continuing to maintain relations with Taiwan, creating a structure in which cooperation and competition could coexist.

Regional order building in “Actively Accomplishing Something”

Following the 2008 Global Financial Crisis, Chinese assessments of the international system shifted. Party documents describe a narrowing gap in relative power and a transition toward a more multipolar order. China moved from hiding capabilities to “actively accomplishing something” and later to “striving for achievement.” Peripheral diplomacy and the concept of a “Community of Common Destiny” became central to shaping regional order. Initiatives such as the Asian Infrastructure Investment Bank (AIIB) and the Belt and Road Initiative expanded China’s economic and institutional reach and financial influence over its neighbors. As Yan Xuetong, a distinguished professor in China, noted:

“The significance of China’s peripheral or neighboring countries to its rise is growing more important than the significance of the United States. The nature of a country’s rise is to catch up with the most powerful country in the world, and the more powerful country can only be an obstacle to the rising country and cannot become its supporter, and this has created a structural contradiction between the United States and China. China had long believed that as long relations with the United States are handled well, China could reduce U.S. restraints on China’s rise . . and therefore the United States should be regarded as the ‘highest priority’ [重中之中]. For the rise of China, it is more important to strive for the support of many neighboring countries than to reduce the prevention efforts of the United States. The rise of great powers is a process in which a country first becomes a regional power and only then can become a global one, and China’s elevation of neighboring countries as the top priority of diplomacy will help prevent the danger of running before you can walk.”

A New Era: Global Order building

In 2017, Xi's Party Congress address marked “a new era” characterized by “great changes unseen in a century” that would see “China moving closer toward the world’s center stage.” Just a year before, United Kingdom had voted to leave the European Union and Donald Trump was elected president of the United States. From China’s perspective—highly sensitive to changes in perceptions of American power—these developments indicated that the world’s leading democracies were beginning to withdraw from the very international system they had constructed. This created what China’s leadership and foreign policy elite describe as a “period of historical opportunity” [历史机遇期], enabling Beijing to expand its strategic focus beyond Asia to the wider global order and its governance structures.

Strategic Opportunity and China’s Future Strategy

Interpreting rising protectionism, unilateralism, and transactionalism as evidence of a broader U.S. retreat, China no longer viewed restraint as necessary. Instead, it saw an opportunity—if not an imperative—to advance its global ambitions more openly. In this context, shifts in the global governance system were understood as aligning with China’s long-term objective of national rejuvenation by 2049. However, Chinese strategists appear to favor a peaceful power transition rather than a premature military confrontation, drawing on historical analogies of hegemonic transition in which a rising power gradually displaces an established one through cumulative gains in material capabilities, institutional influence, and strategic leverage. Within the framework of power transition theory, Beijing’s preferred pathway is not immediate escalation over Taiwan but the steady narrowing of the capability gap with the United States until the balance of power shifts decisively in its favor.

From this perspective, U.S. strategic overextension in the Middle East and Europe creates precisely the permissive international environment that Chinese strategists have long anticipated. Continued American involvement in multiple external theaters disperses military resources, political attention, and economic capital, thereby weakening Washington’s ability to concentrate balancing efforts in the Indo-Pacific. This creates strategic vacuums that China can exploit through external balancing by economic statecraft, alliance-building, and institutional penetration, particularly in Europe and the Indo-Pacific. Rather than direct military revisionism, Beijing’s strategy here resembles a form of incremental revisionism through interdependence, whereby influence is accumulated through trust-building, infrastructure investment, diplomatic engagement, and asymmetric economic linkages.

This logic is reflected in elite Chinese thinking. As CASS Deputy Director of the Belt and Road Research Center Ren Jingjing argues,

“China will become a high-income country around 2021; by 2030, China’s GDP may significantly exceed the United States; by 2035, China’s high-tech R&D expenditure may exceed the United States; by 2050, China’s military expenditure may exceed that of the United States.”

Therefore, Beijing’s emphasis remains on the long-term accumulation of comprehensive national power—economic output, technological innovation, R&D capacity, and military expenditure—as the foundations of eventual systemic leadership. This reflects a strategy of internal balancing, where the rising power prioritizes capability accumulation over immediate confrontation. Such an approach allows China to reshape the distribution of capabilities within the international system without triggering an early balancing coalition led by the United States.

Accordingly, China appears to be pursuing what may be understood as the global pathway to order-building, rather than an immediate regional military pathway centered on Taiwan. Instead of precipitating a crisis in the Taiwan Strait, Beijing has strong incentives to deepen engagement with the United States and remain embedded in the international economic order while Washington remains absorbed in costly external conflicts. This approach allows China to benefit from continued trade cooperation, maintain market access, and strengthen relative gains while the United States incurs the costs of imperial overstretch.

The Iran conflict reinforces this strategic logic. By drawing U.S. attention and resources away from East Asia, it contributes to a form of strategic distraction, reducing the immediacy of American deterrence in the Indo-Pacific. In such a context, Beijing is likely to prefer diplomatic engagement, economic cooperation, and institutional expansion over direct escalation, particularly if confrontation risks catalyzing counterbalancing by regional allies.

In essence, China’s strategy reflects a classic long-game revisionist approach: avoid premature confrontation, deepen interdependence, expand systemic influence, and allow the incumbent hegemon to weaken through self-imposed overextension. Rather than forcing the transition, Beijing appears intent on managing the structural conditions under which the transition becomes increasingly likely. As the Thirty-Six Stratagems says: “Deceive the heavens to cross the ocean.”