The CSI 300 Index of stocks trading on the mainland’s exchanges has dropped 3.1 per cent since the US and Israel began attacks on Iran on February 28, outperforming the S&P 500, the Euro Stoxx 50 and Japan’s Nikkei 225, which have all slid at least 4 per cent during the period.

This marked a turnaround from the previous four oil disruptions from 2011 to 2025, when the CSI 300 fell by an average of 8.4 per cent and underperformed global peers. The S&P 500 was the best performer during these four disruptions, falling by an average of 2.9 per cent.

Powering the change is China’s years of efforts to promote green energy, including solar and wind, and electric vehicles (EVs). The country is now the world’s largest producer of photovoltaic products and EVs. Consumption of non-fossil fuels rose by 2 percentage points last year, surpassing oil as the second-largest energy source, according to the National Bureau of Statistics. Analysts estimated the share at more than 22 per cent, with projections of up to 27 per cent in five years.

“There could be very limited disruptions to China’s domestic economy, given its diversified import sources, strategic oil reserves and expanding use of renewables,” said Xiangrong Yu, an analyst at Citigroup. “Given China’s relatively [limited] exposure to the Middle East, Chinese equity markets showed relative resilience. China assets would be a likely beneficiary of such a capital shift.”

The Iran war would entrench China’s dominance in renewables, said Yu, noting its global export share of 60 per cent in lithium batteries, 44 per cent in solar panels and 39 per cent in wind power equipment.