(Preview) Xi Wants the Strait of Hormuz Re-Opened; Cakes and An E-Commerce Crackdown; The Next Stage of Decoupling; The MATCH Act in Congress

Summary

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Sharp China with Bill Bishop

(Preview) Xi Wants the Strait of Hormuz Re-Opened; Cakes and An E-Commerce Crackdown; The Next Stage of Decoupling; The MATCH Act in Congress

Episode Summary – April 23, 2026

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Episode Overview

This episode dives into China’s diplomatic maneuvering amidst heightened tensions in the Middle East, specifically focusing on recent events around the closure of the Strait of Hormuz and China's relationship with Iran and Saudi Arabia. Hosts Andrew Sharp and Bill Bishop unpack Xi Jinping’s recent call with Saudi Crown Prince Mohammed bin Salman (MbS), the implications for regional stability, and how U.S.-China-Iran dynamics are playing out against the broader backdrop of global power competition.

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Key Discussion Points & Insights

1. Xi Jinping’s Call with MbS and China’s Position on the Strait of Hormuz

Timestamps: 00:28 – 05:10

• Xi's Statement: China urges an "immediate and comprehensive ceasefire," supports peace efforts, and emphasizes that the Strait of Hormuz "should maintain normal passage" as it serves global interests.
• Bill’s Analysis:
  • China’s concern over the closed Strait is unsurprising due to their reliance not just on oil but crucial petrochemicals and byproducts from the region.
  • Xi’s remarks may be an attempt to exert influence on Iran, but, as Bishop notes:

    “...if they are, it hasn’t worked so far. Right. Because we're 48 hours from that call.” (01:41, Bill)

• Context of Ongoing Conflict: Iranians have reportedly fired on vessels; the U.S. maintains a blockade on Iranian ships.

2. The Intercepted Ship & Accusations of Chinese Military Support

Timestamps: 03:01 – 05:10, 08:39 – 10:24

• Trump’s Statement:
  • Recently claimed, “we caught a ship yesterday that had some things on it which wasn’t very nice. A gift from China perhaps…” (03:11, Trump, paraphrased by Bill)
  • Speculation surrounds a seized vessel possibly carrying chemical precursors, such as sodium perchlorate, essential for Iranian missile fuel.
• China’s Denial:
  • Chinese Ministry of Foreign Affairs rejects "any false association and speculation" about their involvement.
• U.S. Leverage:
  • Andrew notes the U.S. might be using these public statements “strictly…for leverage. And to keep the PRC on the back foot.” (11:36, Andrew)

3. China’s Limited Influence & Strategic Calculations

Timestamps: 05:10 – 07:58

• PRC’s Dilemma:
  • China wants the war to end and needs normal trade flows, but has limited options for influencing Iran without suffering its own consequences.

    “If any direction they go hurts China.” (05:22, Andrew)

• Risks of Overt Action:
  • China is cautious—taking stronger action risks backfiring or exposing the limits of their influence.
• Stockpile Cushion:
  • China’s oil reserves give them some buffer, but not indefinitely. Deteriorating global conditions would impact China’s export-driven economy.
• Bill’s Comparison:
  • Relationship with Iran is pragmatic, lacking the depth and personal connection seen with Russia/Putin.

4. The Gulf States’ Energy Ties and Strategic Balance

Timestamps: 07:58 – 08:50

• China’s Gulf Preferences:
  • Energy ties with Saudi Arabia and UAE are paramount; these countries export substantial oil to China.
  • U.S. controlling the Strait long-term is unlikely and not desirable for other Gulf states.

    “I don’t think the US will control it and I don’t think any of the other countries in the region would want the US to suddenly shut off any shipments to China. That would hurt everybody.” (08:06, Bill)

5. U.S. Deterrence and Broader Geopolitical Game

Timestamps: 08:50 – 11:07

• Dual Pressures:
  • The U.S. uses events like ship seizures as points of deterrence, adding pressure on China while preparing for multiple conflict scenarios (e.g., Taiwan).
• Trump’s “Gift from China” Statement:
  • Andrew suggests this is more about psychological gamesmanship than policy:

    “I think Trump is just screwing with Xi and the PRC on that point.” (11:07, Andrew)

  • Threats of tariffs for military exports to Iran are likely more public posturing than policy signals.

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Notable Quotes & Memorable Moments

• Bill on Chinese Influence Over Iran:

  “If they are trying to push Iran to reopen the strait… whatever pressure they're putting on isn’t working.” (04:07, Bill)

• Andrew on China’s Strategic Constraints:

  “The PRC has sort of looked paralyzed over the last six weeks—talking to everybody, but can’t really do much.” (04:28, Andrew)

• Bill on Relationship Differences:

  “The relationship with Iran is not as important as with Russia...They seem to care potentially a little bit more about the other Gulf countries.” (06:53, Bill)

• Bill on Global Oil Trade Realities:

  “Other countries in the region would not want the US to suddenly shut off any shipments to China. That would hurt everybody.” (08:06, Bill)

• Andrew’s Summary of U.S. Leverage:

  “...the US Government is not going to be surprised or scandalized by any Chinese support for Iran… they are strictly doing that for leverage.” (11:07, Andrew)

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Key Segment Timestamps

• Xi–MbS Call & Strait of Hormuz: 00:28 – 05:10
• The Ship Interdiction & Dual Messaging: 03:01 – 05:10, 08:39 – 10:24
• China’s Limited Leverage & Calculations: 05:10 – 07:58
• Oil Politics & Gulf Relationships: 07:58 – 08:50
• U.S. Deterrence, Trump’s Posturing, and China’s Dilemmas: 08:50 – 11:07

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Final Takeaways

• China is straddling a diplomatic tightrope amid Middle Eastern turmoil, keen to keep energy supplies flowing but limited in its practical influence over Iran.
• U.S. actions, like ship seizures, are as much about regional signaling (to China and others) as they are about sanctions enforcement.
• Both hosts highlight how public statements—be it from Xi or Trump—serve as much for theater and leverage as for substance, reflecting the complex chessboard of international security and trade.

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Note: For the full episode (including subsequent segments on e-commerce crackdowns, the MATCH Act, and decoupling), a subscription is required.

Transcript

[A]

Foreign.

[B]

Welcome to Sharp, China. I'm Andrew Sharp, and you are listening to a free preview of today's episode.

[A]

Hello, and welcome back to another episode of Sharp China. I'm Andrew Sharp, and on the other line, Bill Bishop. Bill, it's great to be back. How you doing?

[C]

I'm doing okay. Sorry we missed last week. That was some family stuff on my end. So, apologies. Yes, good to be back.

[A]

Thank you, everyone, for your patience. Busy world out there, and we've got a great rundown for today. We will begin today's episode with a readout from a call between xi Jinping and MbS, the crown prince of Saudi Arabia, which reads in part, china calls for an immediate and comprehensive ceasefire, supports all efforts conducive to restoring peace, and stands for resolving disputes through political and diplomatic means. The Strait of Hormuz should maintain normal passage as this serves the common interests of regional countries and the international community. China supports regional countries in building a common home of good neighborliness, development, security and cooperation, holding their future in their own hands, and promoting lasting peace and security in the region. So, Bill, just curious, how did you read that call? What was going on there between the PRC and Saudi Arabia on Monday?

[C]

Well, I mean, they have good ties. I just, it was interesting that I think, you know, Xi is commenting specifically on the closure of the Strait of Hormuz. It shouldn't be a surprise that the Chinese are very concerned because, again, the closure of the strait causes, ultimately will cause them a lot of problems, too. Not, not just for oil, but all sorts of petrochemicals, petrochemical byproducts that they, that they need. And so I just think it was interesting, you know, here we are Wednesday, and the Iranians, you know, continue to keep it closed. The US Keeps the blockade on, on the Iranian ships. The. There's reports that the Iranians fired on several vessels this morning. So, you know, whether or not this signaled that China was trying to sort of exercise some influence on the Iranians from behind the scenes, if they are, it hasn't worked so far. Right. Because we're 48 hours from that call. The other thing was interesting is that, you know, the line in here that, you know, about promoting lasting peace and security in the region, this claim on the same day that the US Interdicted a ship, I guess they disabled the engine room and boarded the ship. And then yesterday on cnbc, President Trump, we don't know what was on that ship. It was coming from China. And yesterday on cnbc, Trump said in an interview he was talking about The Iran war. It was a very long interview. He talked about a lot of things as he does when he gets talk

[A]

a long and meandering. It was set for 25 minutes and I think it went 30 or 35 minutes.

[C]

But he said we caught a ship yesterday that had some things on it which wasn't very nice. A gift from China perhaps, I don't know, but I was a little surprised but because I have a very good relationship and I thought I had an understanding with President Xi. But that's all right. That's the way war goes, right? We don't know if it's the same ship, but there has been speculation that the ship that was interdicted, I think on Monday or Sunday or Monday may be carrying chemicals that the Iranians use to make fuel for their ballistic missiles, which again is not. I mean those ballistic missiles have targeted not just Israel, but other countries in the region, including countries like Saudi Arabia. I think that host. Host U.S. bases and the drones that the, at least some of the drones I think the Iranians have used are

[A]

made with Chinese components, all of Chinese componen.

[C]

And so, you know, it's a little bit disingenuous for Xi to say that if this is happening, I think, you know, doesn't matter. We think, I think the Gulf countries think it's a little bit disingenuous for the Chinese to say this. I don't think they're surprised. But again, it's complicated. But at the same time, as I said earlier, if the Chinese are trying to push Iran to reopen the strait

[A]

and you know, which is moderate compromise

[C]

revert to the right of, you know, it's international waters of free passage, whatever pressure they're putting on isn't working.

[A]

Yeah, well, and it's interesting because it's sort of another indication of the way that they are trapped in the face of this war. Because all of this is imposing pretty meaningful short term consequences and costs and it has pretty meaningful long term downsides if the US secures the straight long term. And like if you're the prc, you want to help the IRGC survive because you don't want the US to control the strait long term. But they also need the war to end and they need normal passage through the strait. And it's just not clear how much they can actually do to effectuate that outcome. And they need to maintain functional relationships with Saudi Arabia and UAE and the other countries in the region. So it's quite a balancing act here. And like the PRC has sort of looked paralyzed over the last six weeks talking to everybody, but can't really do much.

[C]

Well, I think part of it is the real limits to what they can do and the influence they have. And I think there's, there haven't seen a lot of upside to trying to exert more influence that might fail.

[A]

I think they're also action they would take has consequences, has negative consequences, which is part of the problem here. Like if any direction they go hurts China

[C]

potentially, I mean, if there's a resolution where Iran comes out of this with a new government that isn't necessarily bad for China, there's going to be plenty of opportunities for China that, that, that country is going to need to be rebuilt. Yeah, they have all sorts of trade ties with China. China will happily buy their oil, the straits will get reopened and so China can buy all that stuff and they will. So again, it, but the problem I think is part of it is the way this system operates. They're not necessarily don't seem particularly good at adjusting quickly to very uncertain and rapidly changing conditions and situations. Yeah. And I mean this is like, I mean, anyone who's trying to quote, monitor the situation, you know, you're, you're basically, your neck hurts because it's dangerous, it's

[A]

dangerous to podcast about because who knows where we'll be.

[C]

Is there a coup? Is there a. The Chinese, they don't have a lot they can do and so why do too much when they just have to really kind of ride it out and figure out where the angles are that best protect and further their interests? And you know, I think right now they can weather because of their stockpiles, especially of oil, they have more of a cushion than most countries. It's not an endless cushion. And certainly as other countries around, other economies around the world start to suffer, that has impact on China's export economy. And so they do want this to end soon. The challenge, right, is unlike with Russia, where they have, I think, a much different relationship with Russia than with Iran, and Russia is much more important to China for lots of reasons, both seemingly personal between Xi and Putin, but also, you know, they share a multi thousand kilometer border. You know, China needs to continue to support Russia so that it isn't defeated in Ukraine and Putin potentially falls, potentially Iran, I think they can handle a change in government. Iran, because they have and they care. I think in many ways they seem like they care. I think because the relationship with Iran is not as important as with Russia and there isn't the relationship with Putin, there isn't a relationship with Iran leaders like there was that she has with Putin. They seem to care potentially a little bit more about the other Gulf countries, relate their relationships with China than potentially the relationships they have with the EU countries.

[A]

Yeah, well, I mean, the other Gulf countries are shipping tons of oil to China every year and that's for energy

[C]

security and they're not going to stop. And even though, I mean, I will push back on your sort of assertion earlier that the US could end up controlling the Strait, I mean, Oman has to say these other countries, I don't think the US Will control it and I don't think any of the other countries in the region would want the US to suddenly shut off any shipments to China. That would hurt everybody.

[A]

No, I don't think it would be a permanent shutdown of shipments to China. But in the event of a war scenario, the US can tap allies and say we're not going to be shipping to China and we control the Strait. I think that's a card that the U.S. is potentially.

[C]

But, but, but the U.S. is going to in a war scenario, if you mean over time the US is going to have a lot happening to have a lot more ships and a lot more munitions before they can do that in the Strait and also fight over Taiwan.

[A]

Well, there's no question about that. But in the absence of the ships and munitions needed to fight a war in Taiwan, having more deterrence and more points where you can deter Chinese aggression is a decent solution. And I think that's what's at least being attempted here from the United States perspective. And we'll see whether they're able to actually land the plane, as it were, in Iran. Because again, that story changes every couple of days here and on the seizure of the ship that was the Tuska that was seized with Marines transiting by helicopter to rappel down and seize the tusk that can carry up to around 4820 foot long containers and had been traveling back from a Chinese chemical storage port laden with cargo, according to AIs data provided by the global intelligence company Kepler. The Gaolon port in Zhuhai, a city on China's southeastern coast. Experts previously told the Washington Post that it is a known loading port for chemicals including sodium perchlorate, perchlorate, a key precursor for solid rocket fuel that Iran needs for its missile program. Though it is not immediately clear what materials were on the ship. And the Ministry of Foreign affairs said the vessel seized by the US Is a foreign container ship. China rejects any false association and speculation as to what was on the ship.

[C]

And, and the US has seized several other vessels. And so it's not clear that what Trump is referring to is just the Tuska, but it. People are assuming that. But we don't know for sure.

[A]

Yeah, well, his quote was pretty entertaining.

[C]

Yeah. And, you know, and, and if it is, you know, again, he had that post speak about, you know, any, any paraphrasing. But any country sending military items to Iran will get a 50% tariffs on all their goods. I mean, if they're sending chemical precursors for ballistic missile fuel that hit Israel to hit other countries in the, you know, missiles that hit Israel, other countries in the Gulf, you know, is he going to follow through with it and then blow up the Busan understanding and probably the summit in.

[A]

I wouldn't think so. No. I wouldn't think he's going to blow up the summit in a couple of weeks. We are only three weeks out from the visit to Beij. The way he characterized it, a gift from China, perhaps. I don't know, but I was a little surprised because I have a very good relationship. Yeah, I had an understanding with Xi. That's all right. That's the way war goes. I think to some extent this is not a technical phrase in international relations, but I think to some extent Trump is just screwing with Xi and the PRC on that point. And the US the last time we recorded, I said the US Government is not going to be surprised or scandalized by any Chinese support for Iran. And I think that's true. And to the extent the US Ever pretends to be, it's strictly doing that for leverage. And to keep the PRC on the back foot. And to make clear to everyone else in the region where China ultimately stands in the course of all this would be my guess as to what's happening.

[C]

I mean, I don't. No one paying attention should be surprised.

[B]

All right. And that is the end of the free preview. If you'd like to hear the rest of today's conversation and get access to full episodes of Sharp China each week, you can go to your Show Notes and subscribe to either Bill's newsletter, Cynicism, or the Stratecheri Bundle, which includes several other podcasts from me and daily writing from my friend Ben Thompson. I'm an incredibly biased news consumer, so I think both are indispensable resources. But either way, Bill and I are going to be here every week talking all things China, and we would love to have you on board. So check out your Show Notes, subscribe and we will take talk to you soon.