China has not given formal recognition to the Houthi rebels, a militant faction that has taken control of parts of Yemen since 2014. But it is providing them with dual-use technologies such as satellite imagery and drone components”, according to an analysis published by The Stimson Center.
The authors of the analysis, Mohammad Salami and Barbara Slavin, thought that China has adopted a pragmatic approach to the Houthis in Yemen, balancing economic and security interests with minimal direct involvement to maintain a controlled level of instability that protects its shipping interests in the Red Sea at the expense of the U.S. and its allies.
China views economy and trade as central to its national interests, and any threat to commercial routes is treated with strategic urgency. With over 60 percent of European Union-China trade passing through the Suez Canal, the Red Sea’s security is critical for Beijing.
While many countries have rerouted ships via the Cape of Good Hope — incurring two-week delays, nearly $1 million in added fuel costs per trip, and a 30 percent increase in overhead — China has adopted a different strategy to secure safe passage for its vessels.
Overall, according to the analysis, China’s strategy is built on three pillars: securing commercial interests in the Red Sea, countering U.S. influence, and coordinating with regional powers such as Saudi Arabia.
Reports, including documents from the U.S. Treasury’s Office of Foreign Assets Control (OFAC), suggest Chinese coordination with Iran, which backs the Houthis, or directly with senior Houthi figures such as Mohamed Ali Al-Houthi to ensure that Chinese ships are not targeted. This quiet understanding has paid off for Beijing. Despite an 85 percent drop in general Red Sea shipping and a 66 percent decline in Suez Canal traffic, Chinese shipping tonnage has significantly increased, according to Lloyd’s List data as of January 2024.
By leveraging its ties with the Houthis, China has transformed the Red Sea crisis into an opportunity, gaining a competitive economic edge over global rivals. As noted as early as late 2023 by the South China Morning Post, China’s reluctance to join US-led maritime patrols stems from this strategic advantage: Why participate in securing a route that currently serves as a benefit? Ultimately, Beijing has used the Red Sea disruption to outmaneuver competitors and expand its influence in global trade without direct military involvement.
While avoiding open defiance of U.S. sanctions, China has been linked to material support for the Houthis: In April 2025, the U.S. sanctioned Chang Guang Satellite Technology Company for providing satellite imagery to the Houthis, threatening U.S. interests in the Red Sea. In August, Yemeni authorities in Aden found drone kits on a commercial ship that originated in China.
The Houthis, meanwhile, view China favorably, seeing it as a powerful, anti-imperialist force aligned against U.S. dominance. This perception enhances China’s political leverage and provides an opening for greater involvement in Yemen’s economy.