If India and Pakistan erupt into an all-out war, the global fallout will be severe. But one nation stands to lose far more than others: China. Despite the obvious concerns in Washington, it is Beijing that would take the biggest hit — economically, strategically, and politically.
China's Investments Are Exposed
China’s deep entanglement with Pakistan through the China-Pakistan Economic Corridor (CPEC) leaves it dangerously exposed. Billions of dollars in Chinese investment have been poured into Pakistani infrastructure, from highways to ports. If war tears Pakistan apart, China’s Belt and Road ambitions suffer a major blow.
Stability in Pakistan is key to China's long-term strategy of accessing the Arabian Sea and reducing its dependence on vulnerable shipping lanes like the Strait of Malacca. An Indo-Pakistani war would wreck critical supply routes and financial projects Beijing has spent over a decade cultivating.
China’s Borders Would Be at Risk
Unlike the United States, China physically borders both India and Pakistan. A major conflict would not just be a distant concern for Beijing — it could spill across China's frontiers, forcing Beijing to reinforce its western borders and stretch its military capacity.
The memories of the 2020 Galwan Valley clash between Indian and Chinese forces remain fresh. If India were to ramp up its military posture across multiple fronts, China could be dragged into a dangerous and costly escalation it does not want.
The U.S. Is Insulated — And Might Even Benefit
By contrast, the United States is geographically and economically insulated from the conflict. While India is an important American ally, and the U.S. would certainly take diplomatic and humanitarian actions, America's critical supply chains are not anchored in the region.
In fact, an Indo-Pakistani war could create an opportunity for American defense contractors to deepen military cooperation and arms sales to India. Rather than draining U.S. resources, the conflict would likely fuel demand for American military hardware and technology.
Demographic and Alliance Implications
India is a central player in the Quad alliance alongside the United States, Japan, and Australia — a coalition designed to counter China's growing influence. If India were weakened by war, it could present a temporary strategic opening for Beijing.
However, the costs would be far greater for China. A destabilized Pakistan could collapse into chaos, creating a failed state on China's western border. Refugees, terrorism, and political instability would flood into China's Xinjiang region, precisely where Beijing is already struggling to maintain control.
The Bottom Line
An all-out war between India and Pakistan would be disastrous — but China would suffer the most. Its investments would be crippled. Its borders would be threatened. Its grand strategic ambitions through Belt and Road would be stalled, if not shattered.
Meanwhile, the United States would remain insulated, and could even strengthen its ties with India in the aftermath.
The world may watch nervously if India and Pakistan descend into conflict, but no country has more to lose than China.