China’s growth picked up at the start of the year, thanks to a boost from stronger fiscal spending and exports. This year’s Budget suggests that this fiscal support won't last. As a net energy importer, high global energy prices will be another drag. But China's economy is not especially dependent on oil or natural gas and the state can use its stockpiles and its control of retail prices to shield energy consumers. Overall, the Iran conflict is only a mild threat to China's economy. Indeed, there may be some economic positives: high global energy prices will increase demand for green exports and may also improve the competitiveness of China's wider export sector as rivals overseas are likely to face steeper rises in energy input costs.
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