BEIJING/HONG KONG, Jan 28 (Reuters) – When U.S. President Donald Trump took office a year ago with an “America First” agenda, many saw trouble for China’s sluggish economy, but Beijing has thawed frosty relationships with other trade partners to post a record trade surplus.
While Trump’s policies have strained ties with traditional U.S. allies, China has turned its focus to fostering ties with key partners, including Canada and India, analysts say.
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Backed by its $20 trillion economy and $45 trillion worth of stock and bond markets, China is emerging as a “steady partner” for many countries, said Aleksandar Tomic, economics professor at Boston College.
“I think China has done a good job and rightly so to position itself as the reliable and stable trade partner,” said Derrick Irwin, co-head of intrinsic emerging markets equity at Allspring Global Investments.
“They basically said, look, you’ve got a massive trade partner in the U.S. that’s become a little more uncertain. We can offer predictability and certainty. And I think that’s very fair.”
Starmer’s four-day visit to China will be the first by a British prime minister since 2018 and follows that of Canadian Prime Minister Mark Carney earlier this month, the first Canadian prime minister to visit Beijing since 2017.
CHINA ECONOMY RESILIENT
While the world’s two largest economies have been locked in geopolitical disputes for the past few years, Trump’s return to the White House in January 2025 sharply escalated tensions on multiple fronts, including trade and technology.
Trump raised tariffs on China to over 100% in April, before partially reversing and settling for a temporary truce, while Beijing boosted its exports to non-US markets and rolled out support measures for its private enterprises and markets.
Chinese shipments to the U.S. fell 20% in 2025, but rose 25.8% to Africa, 7.4% to Latin America, 13.4% to Southeast Asia and 8.4% to the European Union last year.
“Many countries previously have not been China-friendly are now kind of pivoting to China … because the United States is becoming a lot less predictable,” Tomic said. “The more the U.S. gets difficult to deal with, the more it opens up for China.”
The country recorded the largest-ever monthly forex inflows of $100.1  billion in December, according to bank settlement data from its forex regulator. Its official forex reserves hit a 10-year high of $3.36 trillion.
Its financial market has emerged robust from trade disputes with the Shanghai index climbing 27% over the past year, outperforming U.S. equities, the market turnover hitting a record high and the yuan expanding its global usage.
With the dollar becoming less appealing to investors due to Trump’s erratic approach to trade and international diplomacy, Beijing is also pushing ahead with its ambition to bolster the global usage of yuan, said bankers with knowledge of the matter.
Some of the big global banks are scrambling to boost yuan liquidity in offshore hubs and put in place frameworks for faster payment settlements in yuan in trade corridors of China and Southeast Asia, the Middle East, and Europe, they added.
“We have seen quite a few cycles of China trying to internationalise yuan and then pulling back,” said a banker at a global bank with China presence. “This time it’s different … Trump policies are very conducive for boosting yuan usage.”
More than half of China’s cross-border transactions are now settled in yuan, from almost none 15 years ago, while nearly half of China’s overseas bank lending is now in renminbi, according to the latest data from the PBOC and SAFE.
CHINA CAUTION
But some foreign policy analysts caution against China’s new, friendlier economic and political playbook.
Despite the new trade pacts, Patricia Kim, a foreign policy fellow at Washington-based Brookings Institution, said distrust of the U.S. does not translate into trust in Beijing for U.S. allies and partners.
“Many of these countries harbour deep concerns about China’s approach to trade, its use of economic coercion, and unresolved maritime and historical disputes,” Kim said.
“In the current moment, China may appear more restrained or pragmatic when compared with the Trump administration’s extreme rhetoric and actions. But Beijing’s actual behaviour has not been especially reassuring.”
Reporting by Liz Lee in Beijing, Samuel Shen in Shanghai and Sumeet Chatterjee in Hong Kong; Editing by Michael Perry
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