After over six weeks of conflict and faced with rising energy prices, many consumers are turning to greener solutions that are less exposed to geopolitical shocks. Ningbo Deye Technology, a specialist in integrated power solutions, anticipates its Q1 profit to surge of up to surge by up to 70%. This growth is driven by demand for energy storage in Europe, the Middle East, and Southeast Asia. With high prices at the pump and heavy European reliance on oil imports, households are reconsidering electric vehicle purchases.
Car makers such as BYD and Geely are benefiting from this influx of potential new customers. In March, electric vehicle exports doubled to reach a record 349,000 units, according to Bloomberg. After years of investment, China is now firmly anchored in the electric technology value chain and is fully reaping the rewards of rising global demand. But this is not the only sector capitalizing on the crisis.
Beijing's secret weapon
More than thirty years ago, Deng Xiaoping already summarized the stakes: "The Middle East has oil, China has rare earths." This phrase resonates deeply today. Currently, 80% of the oil exported by Iran is destined for China. At the same time, Beijing controls approximately 70% of global extraction and nearly 90% of rare earth processing capacity.
According to The Guardian and Axios, the US defense industry depends on China for 72% of certain rare earths used in F-35 aircraft and radar systems. The three countries find themselves in a delicate situation: a blockade of the strait by Donald Trump would affect both China's energy supply and, indirectly, the supply of rare earths.
Shares of Chinese companies in the sector have jumped amid these tensions. Baotou Steel Union Co is up 12% over one week, while China Northern Rare Earth Group has gained 10%. Both groups raised their prices by approximately 45% for the second quarter, according to Bloomberg. Since the reform of its pricing mechanism in 2023, Beijing has strictly regulated access to rare earths. The subject will be at the heart of the meeting between the US President and Xi Jinping, scheduled for May 14 and 15.
Strong abroad, fragile at home
While China shines internationally, the domestic situation is more nuanced. The country remains heavily dependent on its exports, while domestic consumption is losing steam. The real estate sector is undergoing a lasting crisis: home purchases are falling and, despite a slight recent rebound, investment remains very weak.
Faced with these uncertainties, households are prioritizing savings. This caution reflects deep-seated mistrust: worried about the future, consumers are postponing their purchases.
(China Economic Update - World Bank Group - December 2025)
The wealth generated by exports will one day no longer suffice to absorb China's economic fragilities. Today, the standoff between the United States and Iran directly threatens the country's main engine, especially if the blockade of the Strait of Hormuz by the US Navy becomes prolonged. The question is no longer about the health of Chinese exports, but about Beijing's ability to restart domestic consumption in the heart of the crisis.
