The Prof G Pod with Scott Galloway
China Decode: Why Unrest in Iran is a Problem for China
13 Jan 2026
Chapter 1: How is China's response to unrest in Iran linked to Venezuela?
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It's easy to be captured and caught up with this idea of this unbelievable, overwhelming lightning strike that the American military launched on Madero to take him out of Venezuela and be swept away by a sense of US dominance. But underneath the hood, as it were,
China's tentacles are so deeply embedded into the economies of Latin America, South America, and it's just not going to be that easy for America to take its hemisphere back.
Welcome to China Decode. I'm Alice Han.
And I'm James King.
In today's episode of China Decode, we're discussing how China is confronting the protests in Iran on the heels of Trump's intervention in Venezuela. Plus, we'll chat with Dr. Michal Maiden about what Venezuela's oil loss means for China. And then we'll take a look inside China's so-called fat prisons. Now, that's all coming up.
But first, let's do a very quick check-in with how the Chinese markets are starting the week. On Monday, the Shanghai A-share index closed up over 1% as trading volume on the exchange hit an all-time daily high. The Hang Seng A-share index ended the day up 1.4%, led by strong gains in the tech sector.
Alibaba Health, the healthcare arm of Alibaba, closed up 10% after announcing a new pharmaceutical partnership. And tech giants with food delivery applications such as Alibaba, JD.com, and Meituan all surged on news that the Chinese State Council's Anti-Monopoly Committee would be investigating the delivery sector to curb the ongoing price war. Alright, let's get into it.
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Chapter 2: What geopolitical implications arise from US actions in Venezuela?
He was very keen to try to negotiate anti-nuclear proliferation and getting North Korea to walk back on its weapons system. But at the end of the day, I don't think anything really came out of that. And I think North Korea has again advanced further in its nuclear development.
Absolutely. I think there must be policy thinkers, policymakers in Beijing, particularly in the foreign policy area, that are wondering whether their strategy for the last decade or more, in fact, more than two decades, of undermining US power in the world by allying themselves with effectively rivals of the US, such as Iran and Venezuela and some of the other ones that you've mentioned.
I think that there must be policymakers that are wondering about the wisdom of that policy now that we see what's happening in Venezuela, Iran, and potentially in some of the other countries too. This really is a big setback for Chinese foreign policy goals.
Mm-hmm.
And I think the key question that everyone should look into is whether or not we see the top leadership double down on its partnerships and commitments to these access available countries, or if it decides that it needs to take a different tack.
Because certainly in previous trips to China, I met more liberal voices who were more sympathetic to the view that China actually should be investing in improving its relationships with the G7 countries and notably Europe, where there's still a lot of trade and strategic tensions.
So it'll be interesting, I think, to see after the NPC in the beginning of March, if there is going to be a bit of a soul searching and a change in the national security and foreign policy bent. Okay, we'll be back with more after a quick break. Stay with us.
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Chapter 3: How significant is Iran's oil contribution to China's imports?
As part of that, it's got a very big stockpiling program. It now has maybe 120 days of forward cover, sort of meaning that if supplies were disrupted, it could draw down on stocks. Not something that it necessarily wants to do, but it helps to manage some of the price volatility. And longer term, China's electrifying very rapidly.
Transport and that, you know, reduces its need for oil over the long term doesn't help the short term sanctions. But all of these things are sort of surmountable from a logistical perspective and geopolitically and rhetorically, they're much more complicated and they set up for a much bigger sort of US-China tussle.
And just thinking a little bit more about the geopolitical background to this, both President Trump and Marco Rubio, the Secretary of State, have been clear that Latin America should be regarded as the United States' hemisphere. Could you just talk a little bit about this and the implications of it?
Do you think it's possible that the US could make a grab for other Chinese interests or assets in the region? One of the things I'm thinking of in particular is President Trump's previous remarks that the US should take back the Panama Canal. I mean, China doesn't own the Panama Canal, but there are two ports there.
at both ends of the canal, Cristobal and Balboa, which are operated by a Hong Kong-based conglomerate, C.K. Hutchinson. So China does have some interest in the canal. But I mean, more broadly, do you think that we're going to see further U.S. grabs for Chinese interests and assets in the region?
I think, right, 2026 has only just begun, but if there's anything that we've seen is that nothing is impossible right now or this year. I think we have to be a bit careful. We don't know what the U.S. has grabbed just yet, right? We don't know what it means that the U.S. controls the oil. We don't know who's going to market it, who's going to sell it, if they're selling it, at what price.
Critically for China and sort of for your question, we don't know what's happening with Chinese contracts in Venezuela. Now, if they get cancelled, and they get revoked, that's a pretty big deal. And by extension, if those assets in the rest of Latin America would come under attack, that would be a huge problem.
And, you know, right, if we believe the US national security strategy, then yes, the US does want to reduce China's influence. in the region. That's a problem, I think, as much for China as it is for other Latin American countries. So the Panama Canal is a question of operatorship.
If we think about Brazil, you know, China is the biggest trading partner for many countries, including Brazil, where it's not just a trading partner that buys oil, soybeans, iron ore, but it's also a massive investor in EVs and other industries. It's sort of underpinning some of the energy and electricity infrastructure in these countries.
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Chapter 4: What role does China play in supporting Iran economically?
that everybody was busy trying to figure out, you know, where their exposure is and review their risk assessment practices. I think it is a big risk. And I think for the Chinese stakeholders, there's a question of how do you double down on some of these assets? Because These are big, critical, important markets that have a geopolitical significance.
But how do you hedge against the bigger vulnerabilities? I don't think they're going to divest or withdraw their assets. These are big and important contracts. But equally, they'll want to try and secure them. Now, does that mean diversifying the equity market? Having local partners, maybe having some Russian partners, making them look slightly less Chinese, maybe less debt, more cash, more RMB.
I know that there's a lot of concern about, I guess it's sort of the trading architecture, sort of what happens to currencies of trade, what happens to the technologies of trade. I think that's a really big focus. But if we think back to Iraq, and I know it's different, this is the U.S. 's backyard and hemispheres and we're in Trump world and it's different.
But in 2003, after the U.S.-led invasion of Iraq, the Chinese, again, were extremely worried about their assets and about the upstream contracts. Today, they're the biggest investors in the Iraqi upstream because they have, you know, risk tolerance and greater appetite for risk maybe than many Western countries. They've got patience. They're willing to work with different regimes.
And I think ultimately that is likely to still play out, notwithstanding the fact that everybody's very anxious right now.
You know, when I think about China's strategic reserves and stockpiling, we've seen record oil barrels stockpiling. Is it fair to say that in this environment where there's so much uncertainty in Venezuela, in Russia, in Iran... And China is a huge consumer of a lot of these fossil fuels that we would see more stockpiling in 2026.
What is the right reaction function that we'll see out of Beijing in response to a lot of this geopolitical uncertainty centered around commodities and energy?
I think that's a very reasonable expectation, right, that they'll continue stockpiling oil. And also the prices are relatively low historically. They have no shortage. Sort of physical tank space is abundant. So I think they will keep stockpiling. We've sort of seen already initial indications for the 15th five-year plan about these sort of energy security and commodity security.
So focus on the domestic upstream where they can, where they can do oil, gas, coal, mining. Overseas assets have become a bit more complicated but there was a move to do more mining deals and upstream ventures globally. I think that part of it will be revised with caution.
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Chapter 5: How does the US's stance on Venezuela affect China?
And it honestly wasn't a surprise because over the last two years, I've been seeing a lot of on social media, these reels of people working out in China and But the reason I wanted to share this with you is because I have been hearing and actually I've been seeing, and I don't know if you've seen this, James, in the last, I would say two years, I've noticed a lot more overweight people in China.
And growing up when I would go every year, you know, growing up in Australia, you saw more overweight people. It's also a very overweight country. But every time I went back to China, everyone would be very skinny. Right. And in the last two years, I've noticed a marked change.
And, you know, we can get into the medicine of it, but obviously part of this is economic, part of this is also societal and cultural. They're living more sedentary lives, but they're having better access to food. But in China, there is a strong prevalence of diabetes, as well as increasingly obesity. The figures from the National Health Commission are startling.
So it's predicted that by 2030, 65% of Chinese adults could be overweight or obese. As previously mentioned, more than half of all Chinese adults are now overweight. The number of obese children in China quadrupled since 2000. And China has the world's, I mean, it makes sense given the size of the population, but the world's largest overweight population in the world.
But in April, Beijing launched actually a nationwide weight management campaign to address what it called a major public health threat. So this has taken, I think, a political element now, and I wouldn't be surprised if it comes up as part of the five-year plan, because this has massive implications as well for the economy. I mean, think about the increasing healthcare costs that it will create.
for the nation. But it also, I think, is so different from how people think of China. The other element of this is the commercial element. So there's a lot of talk about GLP-1 being in pill form this year, how that will drastically reduce prices for the access to these weight loss drugs. China currently has GLP-1 drugs that sell for about 385 to 685 US dollars.
I think that's about half of what it costs in the US. But obviously, if China has this flood of new drugs entering the market, which are currently under trial, this could massively push down prices in China and potentially even globally. And there are a couple that I thought looked interesting. There's Mazdatide, and that's created by Innovent Biologics in Suzhou.
There's another injectable, biweekly injectable, GLP-1 by UBT251. There's a Hong Kong pharmaceutical company that's doing a once-daily oral drug called ASC30. And apparently there are over 60 GLP-1 drug candidates that are going late-stage clinical trials in China. And they could, I think, directly compete with Eli Lilly, for instance, and Novo Nordisk.
But one last point that I thought was really interesting. Novo Nordisk actually won a legal case with the Supreme Court in China to uphold its patent of semaglutide, which is used in its GLP-1 drug. And that's used for diabetes and weight loss. So potentially that gives it a bit of a moat in China and elsewhere. But it seems like these new variations...
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