A large number of Chinese companies are facing disruption as a result of the Iran war, with many closing down operations, evacuating their staff and reconsidering how much can be done remotely as opposed to having people on the ground. The Morning Post said that WeRide, Meituan and Baidu were among the companies halting operations or instituting remote work.

China has taken great advantage of the stability of the Gulf States over the past few decades and the current volatility is having a huge impact on business, logistics and supplies, and calling into question all sorts of developments and plans. The indications are that the disruption is already serious and the longer the war goes on, the more impact it is going to have on the business operations of China and other countries in the Gulf States. 

The Gulf is a supplier of a significant portion of China’s total imports and the Strait of Hormuz is now closed. Reuters reports that China has about 78 days’ worth of oil stockpiled, which means it is somewhat cushioned from the impact of the disruption to the world’s oil supplies. But 78 days is not a particularly long period of time, Trump has suggested the war could go on for 4-5 weeks or longer, and apart from the resumption of oil supplies from the Gulf, there is the question of the longer-term future of Iran as the supplier of oil to China. This level of disruption presents many scenarios in terms of outcomes, from the very negative for China to the very positive, a positive being China providing reconstruction services for all. But right now, uncertainties rule. 

Hong Kong stocks retreated by the most in nearly a year on Monday alongside risk assets in Asia, while oil and gold surged after the US strikes on Iran, reports the South China Morning Post. This comes as surging geopolitical risks sparked a risk-off mode among investors.

The Hang Seng Index closed 2.12% down at 26,067.27. At one point, the gauge dropped by as much as 2.8%, setting it on track for the biggest decline since April 7, 2025, when US President Trump’s “Liberation Day” tariff announcement sent the benchmark falling 13%.

On the mainland, the CSI 300 Index slipped 0.1% and the Shanghai Composite Index was little changed. Brent crude rose as much as 14% to $82.37 a barrel, heading for its highest level since January 2025, while spot gold rose 1.3% to $5,346.17 an ounce.

Airline shares plunged on Monday, with Hong Kong’s Cathay Pacific down more than 5%, and Air China, China Southern Airlines, China Eastern Airlines fell at least 4% after the US and Israel launched weekend strikes on Iran, disrupting travel and sending oil prices surging, reports Reuters.

Global air travel remained in turmoil on Monday as war in Iran forced the closure of key Middle Eastern hubs including Dubai and Doha for a third day, stranding tens of thousands of passengers worldwide and disrupting thousands of flights.

Cathay Pacific said it had cancelled all of its flights to the Middle East, which include passenger services to Dubai and Riyadh, until further notice. Data provider VariFlight said Chinese airlines had so far cancelled 26.5% of flights to and from the Middle East from March 2 to March 8.

The Hong Kong stock market dropped sharply on Monday, closing at 2.12% down, following the US and Israel military strikes on Iran. Stocks in Chinese airlines dropped sharply, with China Eastern Airlines down at 8.11%.

Chinese investors, like investors everywhere, are trying to calculate the impact of the conflict on the market. For China, several areas stand to be the most affected—airlines, oil supplies and logistics. An estimated 15-20% of China’s oil comes from Iran. At the same time, the closure of the Strait of Hormuz and the shutdown of major airports in the Gulf States, dramatically disrupts supply chains.

China has a complex web of relationships in the Middle East, and this conflict impacts on all sorts of Chinese interests in the region. For example, a lot of Chinese investors have been looking at Dubai in recent years, but the possibility of missiles falling from the sky have an impact on business. China’s relationships with Israel, the US and Saudi Arabia are all part of the mix of the future, and all thrown into question in light of the developing situation.

China will order up to 120 additional aircraft from European aviation giant Airbus, reports Bloomberg, quoting German Chancellor Friedrich Merz as he travelled to Beijing to deepen ties between the two countries. 

“The Chinese leadership will be ordering a larger number of additional aircraft from Airbus. The total order will include up to 120 additional aircraft,” Merz told reporters after his meeting with Xi, adding that it “demonstrates how worthwhile such trips can be”.

During the trip, Merz also travelled to Hangzhou, a global tech hub, to visit Unitree Robotics, one of China’s leading developers of humanoid robots.