What is really behind China's support for a two-state solution?

Recently, Beijing hosted a major China-Arab States Cooperation Forum, calling for an "effective international peace conference" on Palestine and the establishment of an independent state with East Jerusalem as its capital.

Chinese President Xi Jinping also pledged an additional $69 million in humanitarian assistance to Gaza last month, saying he is determined to work with Arab states to resolve regional hotspot issues.

In his keynote address at the forum, Xi said, "Since last October, the Palestinian-Israeli conflict has escalated drastically, throwing the people into tremendous suffering. War should not continue indefinitely. Justice should not be absent forever."

China's support for a two-state solution is not a new development.

Since the 1970s, China has supported Palestine's struggle for statehood, with chairman Mao Zedong even characterising Israel as a base of imperialism.

More recently, since Israel's onslaught on Gaza began, China has sought concrete momentum towards a two-state solution. It fears that a wider war could engulf the region and considers it imperative to address the root causes of the conflict to drive enduring peace.

Beijing is also keen to expand its peace-building profile in the Middle East at a time when influence from the United States is waning.

For instance, China recently conducted talks between rival Palestinian factions Hamas and Fatah on home soil, and issued a joint statement with Arab states calling for a comprehensive, enduring and early resolution of the Palestinian issue.

Economic cooperation with the Arab world is also picking up, in part by scaling up investments in oil, gas and renewable sectors.

Here’s what China has to gain by supporting a two-state solution.

Ambitions: Regional mediator

Beijing is keen on positioning itself as an effective mediator in the Middle East, and sees a two-state solution as critical to achieving that outcome. China scored a diplomatic victory through the landmark Iran-Saudi peace deal last year. But it is yet to achieve "all efforts towards enhancing regional and international peace and security," as pledged by senior Saudi, Chinese and Iranian officials in a joint trilateral statement last March.

Settling the Israel-Palestine issue could change that. Israel's military occupation of Palestine has long been seen as an intractable issue in the Middle East, and more Arab nations have grown critical of Washington for supporting bloodshed in Gaza.

China hopes to fill Washington's peacemaking void and position Palestinian interests at the centre of a two-state solution. This explains China's vocal support for Palestinians' "national rights" and the establishment of a sovereign state along 1967 borders.

Beijing's support for an enduring ceasefire and Palestine's UN membership aligns closely with the views of Arab states, including those that have normalised relations with Israel. If Arab states put their weight behind a China-backed international peace conference on Palestine, Beijing could further cement regional consensus on Palestinian statehood that is not contingent on US approval.

International reaction to China’s involvement with the Palestine issue has been mixed. On the one hand, Arab countries have been overwhelmingly supportive of China’s two-state solution stance, and even backed calls to end the Israeli occupation.

Russia has also supported China’s stance at the United Nations. But Washington and many Western powers have sought to avoid direct engagement with China on Gaza.

Economic interests

China also has a vested interest in securing its economic and development interests through peace-building in Gaza. For instance, it is pressing ahead with its Belt and Road Initiative (BRI) in the Middle East, a sprawling infrastructure and trade connectivity project that includes a number of ports along strategic waterways.

Israel's war on Gaza has exposed the fragility of cross-regional trade corridors. It risks disrupting long-term BRI investments in ports, energy and transit infrastructure, and has already raised shipping costs along maritime passages.

In response to the war, Houthi rebels in the Red Sea have been attacking international shipping routes, refusing to cease unless Israel ends its genocide in Gaza.

In light of these costs, China and Arab countries have a deep stake in backing a two-state solution. However, given the growth of Israeli settlements and the invasion in Palestinian lands, a two-state solution is still far from establishing a just peace.

Both sides recently greenlit an action plan to boost developmental cooperation in areas such as investment, infrastructure and energy.

Beijing has also served as the top trading partner of Arab states for several consecutive years, with annual trade volume soaring to nearly $400 billion in 2023. Thus, a permanent solution to the Israel-Palestine issue is critical to avoid future conflict flare-ups, and the risk of a wider regional war.

Limits of influence

Despite Beijing's support for a two-state solution, there are limits to its influence. First, Arab states will continue to engage with Washington on the war, and the US will continue to prioritise Israeli interests when it comes to any de-escalation or peace-building bid.

Look at President Joe Biden's three-phase Gaza ceasefire plan. It proposes a path to a permanent ceasefire, but doesn't compel Israel to commit to one in writing. Thus, Washington's robust support of Israel marks a unique challenge for China, given its efforts to focus negotiations on an independent Palestinian state.

The viability of a two-state solution is also in question. Israeli Prime Minister Benjamin Netanyahu is staunchly resistant to an independent Palestinian state.

Washington has also made little effort to advance a process that demands a complete end to Israel's occupation. Illegal settlements also continue to expand and grow, damaging the credibility of a just two-state solution.

Still, Israel's onslaught has made clear that the rights and liberties of Palestinians cannot be ignored. Movement on a two-state solution is critical to bringing that conversation about Palestinians' future out into the open.

On the security front, the US also enjoys important leverage over Arab states. In April, it conducted high-level talks in Saudi Arabia with top Arab and UK officials, and has been a fixture in Gaza truce talks with Qatar.

Doha and Cairo have also backed US guidelines for a ceasefire, while US support for Israel remains solid. These dynamics could make it difficult for China to balance competing expectations on a two-state solution.

Ultimately, China's pursuit for an enduring settlement fares favourably for itself, Palestine and the region at large. By pushing for a two-state solution, Beijing hopes to expand its peacebuilding influence and secure long-term economic interests at all costs.

Hannan Hussain is an international affairs specialist and author. He was a Fulbright Scholar of international security at the University of Maryland, and has consulted for the New Lines Institute for Strategy and Policy in Washington. Hussain's work has been published by the Carnegie Endowment for International Peace, Georgetown Journal of International Affairs, and the Express Tribune (partner of the International New York Times).

Hannan Hussain is an international affairs specialist and author. He was a Fulbright Scholar of international security at the University of Maryland, and has consulted for the New Lines Institute for Strategy and Policy in Washington. Hussain's work has been published by the Carnegie Endowment for International Peace, Georgetown Journal of International Affairs, and the Express Tribune (partner of the International New York Times).