At a time when global industrial chains are deeply integrated, energy remains the foundation of industrial activity. The Strait of Hormuz, a vital chokepoint for global energy supplies, has been overshadowed by conflict, while Brent crude prices surged from about $70 a barrel to nearly $120 at one point.

With Iran sitting astride the Strait of Hormuz, through which about one-fifth of global oil shipments pass, economies heavily reliant on imported energy are facing mounting pressure. For such economies, higher oil prices mean rising manufacturing costs, worsening terms of trade and growing pressure on corporate margins.

China, however, is in a stronger position to withstand such an energy shock, thanks in part to a more diversified energy mix. Data show that crude oil and liquefied natural gas accounted for 28 percent of China's primary energy consumption in 2024, among the lowest shares globally. When oil prices spike, such an energy structure gives China a distinct competitive edge.

A deeper source of resilience lies in China's steady commitment to energy transition. Over the past decade, the share of alternative energy sources, including nuclear, wind, solar and hydropower, in the country's total power generation has risen from 26 percent to 40 percent. At the same time, new energy vehicles now account for about half of China's vehicle sales, while the share of nonfossil energy in the overall energy mix continues to rise.

This energy mix, with coal providing basic support, oil and gas playing a supplementary role, and nonfossil energy steadily expanding, has helped build a diversified and stable energy supply system, providing solid support for China's industrial base.

Beyond energy security, relatively low valuations are another factor underpinning the appeal of Chinese assets. In financial markets, low valuations are themselves a form of defense. A shares remain notably attractive compared with other major global markets. The benchmark Shanghai Composite Index is trading at about 17 times earnings on a trailing 12-month basis, compared with 27.56 times earnings for the S&P 500 over the same period. This suggests that, when faced with the same external shocks, A shares may have more limited downside than richly valued US equities, while offering greater room for recovery.

This relative undervaluation stands in sharp contrast to the elevated valuations seen in some global markets.

After years of gains, US equities are trading at historically high levels, leaving them more vulnerable to geopolitical shocks. As expectations for US Federal Reserve rate cuts have been repeatedly pushed back and concerns over stagflation have crept in, richly valued equities are often the first to come under selling pressure.

By contrast, A shares and Hong Kong equities have undergone a substantial correction in recent years, allowing valuation risks to be more fully priced in. That relative valuation advantage is increasingly feeding into foreign investors' allocation decisions. As renminbi assets remain relatively undervalued, they are generally in a better position to withstand the impact when changing expectations for global monetary easing trigger valuation adjustments across markets.

Energy security and valuation advantages reflect the more static features behind the safe-haven appeal of Chinese assets. The resilience of China's supply chains, by contrast, points to a more dynamic advantage: when global supply chains are disrupted by conflicts, those able to fill the gaps are better positioned to capture the reallocation of capital and orders.

The conflict in the Middle East is driving not only higher oil prices, but also broader disruptions to global supply chains. The threat of a closure of the Strait of Hormuz, security risks along Red Sea shipping routes and soaring insurance premiums for ships and cargo are all putting the global trading system under growing strain. For manufacturers, supply chain stability and delivery reliability are becoming even more important than price.

Against this backdrop, China has emerged as an important anchor of stability. One reason lies in the breadth and depth of its manufacturing system. With a full spectrum of industrial capabilities — from raw materials and components to equipment and finished goods — China is in a stronger position to keep production going and ensure delivery, even when external supply disruptions intensify.

Meanwhile, China's continued advances in higher-end manufacturing are reshaping the global industrial landscape. From AI-related computing infrastructure to new energy equipment, Chinese companies are moving faster up the value chain and taking on a larger role in higher-value segments of global production.

China is not only the world's largest importer of crude oil and liquefied natural gas, but also a leading investor in alternative energy, with spending spanning power generation, technological innovation, energy infrastructure and modern petrochemical facilities.

While short-term safe-haven demand may attract capital inflows, sustaining those inflows depends on a sound long-term institutional environment. The appeal of Chinese assets as a reliable safe haven is underpinned not only by near-term resilience, but also by policy consistency at the macro level and the continued improvement of capital market institutions.

The outline of the 15th Five-Year Plan (2026-30) for national economic and social development has mapped out the direction of China's development for the next five years. Compared with major economies that are increasingly grappling with political uncertainty and policy swings, China has demonstrated a high degree of policy continuity and strategic execution. Meanwhile, the growth target and industrial policies set at this year's two sessions were both pragmatic and proactive, helping provide the market with a clearer anchor for expectations.

The People's Bank of China, the central bank, has also recently reiterated its commitment to maintaining stable operations in the stock, bond and foreign exchange markets. Together, the sustained and coordinated policy signals from regulators have continued to support a recovery in market expectations. This has reinforced a growing view among investors that putting money into China means investing in greater certainty and security — qualities that are becoming increasingly valuable as global uncertainty rises and the external environment grows more volatile.

The conflict in the Middle East, oil price movements and the Federal Reserve's interest rate decisions will continue to shape global capital flows. Traditional safe-haven assets are coming under strain, richly valued markets are showing greater vulnerability, and global supply chains are facing mounting adjustment pressure. Against this backdrop, the safe-haven role of Chinese assets is evolving from a short-term market narrative into a longer-term investment logic, supported by energy security, relatively attractive valuations, supply chain resilience and policy consistency.

That said, the shift is unlikely to happen overnight. International capital flows into China are still at an early stage, and much of the inflow has yet to move directly into the stock market. Instead, it is being reflected more in strategic allocations in the primary market and in the gradual increase of long-term positions.

The writer is a senior researcher at the Xingtu Financial Research Institute. The article is a translated version of an op-ed by the writer in Sina Finance.

The views do not necessarily reflect those of China Daily.