The National Interest - How China Is Quietly Funding Iran’s War Machine July 9, 2025 By: Elaine Dezenski, and Max Meizlish

 The National Interest 

How China Is Quietly Funding Iran’s War Machine

July 9, 2025

By: Elaine Dezenski, and Max Meizlish

Chinese firms, especially Wanda Holdings, are helping Iran bypass sanctions, funding Tehran’s military through illicit oil trade. Targeting China’s economic links is key to stopping Iran’s rearmament and future threats.

For too long, the United States has given China a pass on slave labor, unfair trade practices, and its quiet but critical support for America’s adversaries. Nowhere is that support potentially more dangerous than in Iran. 

In June, while US and Israeli jets struck targets in Iran, China’s oil imports from Iran surged to record highs. Approximately half of Iran’s military budget stems from oil and gas sales, and no country is more critical to sustaining this financial lifeline than China. 

To be sure, destroying Iran’s nuclear program and military infrastructure is vital, but so is denying the regime the cash it will need to rebuild and rearm. That means going after the buyers, bankers, and billionaires in China, propping up Iran’s oil economy. It means sanctioning China to stop Iran. 

How Do Chinese Billionaires Profit From Iran’s Dictatorship?

A little-known billionaire and member of the Chinese Communist Party (CCP), Shang Jiyang is the chairman and controlling shareholder of Wanda Holdings Group (not to be confused with the larger Dalian Wanda Group), a sprawling conglomerate at the heart of China’s illicit oil trade with Iran. Wanda operates everything from pipelines and petrochemical plants to port terminals and oil refineries. 

However, it’s Wanda’s role in buying and processing sanctioned Iranian crude that makes the company such a pernicious threat, one that must be addressed if we are to prevent the Iranian regime from rearming. 

Approximately 90 percent of Iran’s oil exports go to China. Much of that flows to Shandong province, where independently owned refineries known as “teapots” have become the lifeline of the Iranian regime. Before reaching these teapots, Iranian oil is first offloaded by Chinese port operators, such as Shandong Baogang International Port Co., Ltd. (BIPC). BIPC was sanctioned in May for supporting the National Iranian Oil Company (NIOC), which is overseen by Iran’s Islamic Revolutionary Guard Corps (IRGC). 

The same IRGC that directs missile barrages at Tel Aviv supports the terrorists behind the October 7 massacre and equips the Houthis with weapons that threaten global shipping lanes. Notably, third-party corporate registry information identifies BIPC’s two largest shareholders as Wanda and Shang, respectively, with Shang listed as the company’s ultimate beneficial owner. 

But BIPC is just one node in this vertically integrated empire. 

Earlier this year, Wanda acquired a fleet of private tankers that appear ready-made for ship-to-ship transfers, a tactic frequently used to smuggle Iranian oil. Wanda’s holdings include companies involved in petrochemicals, rubber, tires, and commodity trading, all of which may be tainted, directly or indirectly, by the Iranian oil flowing through closed pipelines and physically connecting several of Wanda’s companies. 

Meanwhile, Shang’s investment vehicle, Shandong Ruikang Investment Management Co., Ltd., is closely involved with companies that benefit from Wanda’s Iranian oil supply. This includes companies such as Shandong Hongxu Chemical Co., Ltd., which Shang controls despite being identified as Wanda’s “wholly-owned subsidiary.” 

China Has Many Companies That Fund Iran’s Oppressive Government

Shang and Wanda don’t operate alone. The CCP controls which teapot refineries receive licenses to import oil, and Wanda is said to have joint ventures with some of China’s most powerful state-owned enterprises, including Sinopec, PetroChina, and China Gas Group. Wanda also claims to have “key core customer” relationships with Chinese banks such as the Bank of China, Bank of Communications, and Pudong Development Bank. 

These partnerships appear to directly implicate several large Chinese state-owned entities, several major Chinese financial institutions, and perhaps even the CCP itself in what could be seen by some as a massive state-sponsored sanctions evasion scheme. 

The United States and Israel have done the world a favor by degrading Iran’s capacity to wreak havoc. But airstrikes alone won’t stop the future flow of funds to support Iran’s missiles, militias, or nuclear program. That’s America’s job, and it begins by going after billionaires in China and their business empires. The United States must not abandon its maximum pressure campaign against Iran by allowing China to continue supplying the regime with much-needed cash. Likewise, we must urgently move beyond individual designations of teapots and port terminals to encompass entire supply chains, such as Wanda’s, including banks, billionaires, CCP officials, and state-owned entities that facilitate this trade. 

It’s time we cut off Iran’s cash for good. And that means cutting off China from Iranian oil. 

About the Authors: Max Meizlish and Elaine Dezenski

Elaine Dezenski is senior director and head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy. With more than two decades of leadership in public, private, and international organizations, Elaine is a globally recognized expert and thought leader on geopolitical risk, supply chain security, anti-corruption, and national security. Elaine served as senior director at the World Economic Forum from 2010 to 2015, where she led the Partnering Against Corruption Initiative and launched the Forum’s Global Risk Response Network, a global platform designed to address a broad range of macro-level risks and their implications for business and society.

Max Meizlish is a senior research analyst for the Center on Economic and Financial Power at the Foundation for Defense of Democracies. He previously worked as a sanctions enforcement officer at the Treasury Department’s Office of Foreign Assets Control. Follow him on X: @maxmeizlish.

Image Credit: Shutterstock/saeediex.