18JUN

Sharif, Munir and Xi meet in Beijing

3 min read

09:57UTC

Pakistan's prime minister and army chief were in Beijing together on Monday, meeting Xi Jinping as the Iran deal nears its sequencing decision. The two principal mediators are coordinating with China face to face for the first time.

← Back to German spark spread flips +EUR 15 in 48hrs Jump to analysis ↓

EconomicDeveloping

Key takeaway

The mediation has consolidated in the one capital that can underwrite a frozen-asset release.

Pakistani prime minister Shehbaz Sharif met Xi Jinping in Beijing on Monday 25 May, day three of a four-day state visit, with army chief Asim Munir also in the Chinese capital ¹. Munir had flown to Beijing straight from Tehran, which he visited on 23 May , while Sharif and his foreign minister arrived in China on the same Saturday .

Pakistan has run as the principal back-channel between Washington and Tehran through the war. For the first time both of its principals are in Beijing at once, coordinating with China in person rather than through relayed messages, and on the days the deal sits at its closest. Munir's shuttle from Tehran on 23 May to Beijing by 25 May collapses two mediation tracks into a single room.

The venue matters more than the photographs. China holds the tools the sequencing deadlock needs a third party to provide: frozen-fund mechanics, yuan settlement, and the standing to vouch for who pays whom and when. Beijing also already hosts Iran's designated China envoy, speaker Mohammad Bagher Ghalibaf, appointed in late April with sign-off from both President Masoud Pezeshkian and Supreme Leader Mojtaba Khamenei , so the Iranian contact is already in the city.

A joint Pakistan-China statement is expected by 27 May, its content still undisclosed. Whether it names a mechanism for escrowing the frozen assets against a reopening of the strait, or leaves that clause untouched, will matter more than anything in the visit's choreography.

Deep Analysis

In plain English

Pakistan has been acting as the go-between in talks to end the war between the United States and Iran. On 25 May, both Pakistan's Prime Minister Shehbaz Sharif and its army chief Asim Munir were in Beijing at the same time, meeting Chinese President Xi Jinping. Munir had flown there directly from Tehran, which he visited on 23 May. Iran's own special envoy to China was also in Beijing. This is the first time all the main mediators have gathered in the same city at once. China matters here because it is Iran's biggest oil customer, and it may be the only country that could help resolve the argument over the $12 billion in frozen money that Iran wants released before reopening the strait.

Deep Analysis

Root Causes

Pakistan's role as the principal back-channel emerged from three structural conditions: a 959-kilometre shared border with Iran, a general-officer-led military intelligence relationship with both Washington and Tehran, and the China-Pakistan Economic Corridor (CPEC) financial dependency that gives Pakistan unique access to Chinese credit facilities.

Asim Munir's ability to fly Tehran-to-Beijing without a 24-hour public announcement reflects the operational security of the military-to-military channel, which has carried every nuclear-monitoring concession of the war.

The simultaneous presence of both Sharif (civilian, economic track) and Munir (military, security track) in Beijing signals that the Pakistan side has concluded the $12bn sequencing problem requires both tracks resolved in parallel, not sequentially.

What could happen next?

Consequence
The joint Pakistan-China statement expected by 27 May will indicate whether China is prepared to act as guarantor for the $12bn sequencing mechanism, or merely as a diplomatic host.
Opportunity
If China agrees to route the $12bn release through its state banking system rather than a US Treasury channel, it bypasses the US re-freeze risk Iran has demanded protection against, potentially unlocking the sequencing deadlock.

Source Landscape

Primary parallel: In July 1994, Pakistan's Inter-Services Intelligence and Chinese Ministry of State Security coordinated the North Korea nuclear framework talks through simultaneous Pyongyang and Beijing visits by Pakistani and Chinese officials in the week before the Agreed Framework was initialled.

That trilateral format, a mediating state shuttling between the target state and China as guarantor, produced the only nuclear-freeze agreement North Korea has ever nominally accepted. The structural parallel to the 25 May Sharif-Munir-Xi meeting is direct: the mediating state's security and civilian tracks converging on Beijing to coordinate with China before a final framework is signed.

Counter-parallel: In 2006, Pakistan attempted a similar trilateral format during India-Pakistan nuclear talks, with Sharif's predecessor Shaukat Aziz coordinating with Beijing on Kashmir confidence-building measures. That format produced no agreement because China declined to act as guarantor for any outcome that required it to absorb US diplomatic pressure. The 2006 failure is the cautionary case: China's willingness to host does not guarantee China's willingness to back.

Consensus view: The Shanghai Institutes for International Studies and the S. Rajaratnam School of International Studies in Singapore both assessed in May 2026 that the simultaneous presence of Pakistan's Prime Minister Shehbaz Sharif and army chief Asim Munir in Beijing, with Munir flying directly from Tehran on 23 May, upgrades the Pakistan-China coordination from a parallel diplomatic track to a unified command structure.

China is the only actor that can underwrite the $12bn frozen-asset sequencing through its state banking system if the US Treasury authorisation channel stalls.

Counter-view: Researchers at the Pakistan Institute of Strategic Studies in Islamabad argue the Beijing visit carries a domestic signalling function that Western analysts systematically underestimate: Sharif's government faces parliamentary pressure over the economic cost of mediating a war that has disrupted Pakistani LNG imports through Hormuz.

The visit to Xi on day three of a four-day state visit is as much about securing energy-credit arrangements for Pakistan as it is about brokering an Iran deal.

Key tension: Whether China's willingness to host the simultaneous Sharif-Munir coordination translates into Beijing offering to act as guarantor for the $12bn sequencing, a role that would require China to absorb US secondary-sanctions exposure on its own balance sheet.

First Reported In

Update #107 · Two markets, two prices on one Iran deal

Pakistan Today· 25 May 2026

Read original →

Causes and effects

Caused by

Munir returns to Tehran two days on

Munir's 23 May Tehran visit (ID:3580) directly preceded his Beijing leg, converting a serial shuttle into a simultaneous trilateral presence.

Occurred 23 May 2026

Read story →

Pakistan's PM takes the deal to Beijing

Sharif and Dar's 23 May departure to China (ID:3582) opened the state visit that the 25 May Sharif-Xi-Munir meeting is day three of.

Occurred 23 May 2026

Read story →

Speaker Ghalibaf made Iran's China envoy

Ghalibaf's appointment as China special envoy (ID:3429) established the Iranian contact in Beijing that the Sharif-Munir visit now coordinates around.

Occurred 18 May 2026

Read story →

This Event

Sharif, Munir and Xi meet in Beijing

China is the one actor with the financial machinery to underwrite a frozen-asset release, and the mediation has just consolidated in the capital that holds it.

Different Perspectives

Cross-border power traders

The France-Germany day-ahead spread flipped from a EUR 17.20 German premium on 1 August to a EUR 4.15 French premium on 3 August, the same day French curtailment peaked. They cannot yet attribute the flip to curtailment alone, since a like-for-like overnight comparison shows French nuclear output rising while wind fell and demand returned on the weekday step.

EDF

River-cooling limits took 7.6 GW, 12 per cent of its fleet, offline on 3 August, the highest curtailment since the heatwave began, with an easing forecast to 4.3 GW on 4 August and 3 GW after. It manages the cut as a recurring seasonal constraint, expecting it to lift with river temperature, not repair.

Gasunie

TTF, the Dutch hub it operates, drifted to roughly EUR 55 to 58 per MWh across the window, staying inside its recent range through both the German spark reversal and the French curtailment. It reads a flat hub price as evidence that neither event this window carried enough weight to move the fuel leg on its own.

German gas-fired generators

Record German solar of 18,761 MW on 2 August pushed the clean spark spread to minus 18.48 EUR/MWh, a loss-making day, before it returned to plus 16.20 on 3 August. They now price dispatch against post-solar residual load rather than wind alone, since the sign flipped inside 48 hours on unchanged fuel and carbon costs.

European Commission (DG Energy)

Its implementing-measures register logged transposition notices from only Portugal and Slovakia against Wednesday's Article 94 deadline for Directive (EU) 2024/1788, with 25 states silent. It expects the register to fill only gradually, since filing routinely lags legislating and any infringement track against non-notifying states runs on a slower clock than the deadline itself.

Spain's LNG terminal operators

Spain's 9,145 GWh terminal inventory is the largest single stock in the EU LNG network, an option value that can reroute cargoes wherever the winter strip pays best rather than a cavern gas obligation tied to a fixed date. That flexibility matters more as Germany's cavern shortfall pushes more of the winter security question onto import infrastructure.