China’s new world playbook —from exporter to investor

This report is from this week’s CNBC’s The China Connection e-newsletter, which brings you insights and evaluation on what’s driving the world’s second-largest financial system. You possibly can subscribe right here.

China is transferring from world exporter to investor, proper into areas the U.S. is eyeing.

As U.S. President Donald Trump this 12 months intensified U.S. affect on Venezuela, Iran and Greenland, one of many fast issues on the Chinese language aspect was its native investments.

Talking at Davos on Tuesday, Chinese language Vice Premier He Lifeng urged world leaders to offer a good and predictable setting for Chinese language companies working abroad.

There are vital investments in factories and tech at stake. Whereas China’s commerce surplus ballooned to a document $1.2 trillion in 2025, Beijing’s offers and contracts with nations tied to the Belt and Highway Initiative surged to new highs. Latin America, the Center East and Africa are key areas for the initiative, broadly seen as a channel for China to construct world affect.

Looking forward to 2026, the Monetary Instances’s FDI Intelligence survey predicted China would be the largest supply of abroad direct funding in 2026, forward of the United Arab Emirates after which India. The U.S. tied with Saudi Arabia for fourth place.

The composition of that funding can also be shifting. Extra Chinese language abroad investments are in tech and manufacturing, partly as a result of tariffs are pushing Chinese language electrical automotive firms to localize manufacturing overseas.

World companies and leaders are additionally curious to see how China’s tech stacks up.

Over the previous six months, Beijing-based autonomous supply car firm Neolix has begun receiving world guests, together with logistics companies and the French Ministry of Transportation, Will Zhao, govt president of Neolix, informed me final week.

“2025 was the 12 months we began to actually make this type of contact with world potential companions,” he stated, noting these companions embody consultants or legal professionals who work with native authorities on autonomous car regulation.

“A variety of nations are on the lookout for our funding for manufacturing,” Zhao famous.

Neolix obtained an working license within the UAE late final 12 months and introduced a strategic alliance with a Portuguese mobility firm earlier this month. Zhao stated the corporate plans to deploy greater than 10,000 autonomous supply autos exterior China this 12 months and enter three new nations, ideally in Europe.

However Chinese language firms do not essentially need to look far for abroad enlargement.

Commerce inside Asia is a “mega theme” for the 12 months forward, world funding agency KKR stated in its 2026 macro outlook. “For us at KKR, it is a scalable, secular pattern with actual funding potential that spans logistics, manufacturing, client markets, and digital enablement.”

China has elevated its market share not solely by exports, KKR stated, however by constructing native operations in nations akin to Vietnam.

“One of many rising advantages for the area includes the rising frequency of nations transacting in renminbi, a pattern that has gained momentum post-COVID,” the report stated.

The pattern picked up even earlier than Trump’s newest spherical of world tariffs.

In 2024, 60% of Asian commerce was already carried out throughout the area, with KKR predicting subsequent progress of 8% within the following few years. A significant component, the report stated, is that greater than 800 million millennials within the area are about to attain an age at which they are going to be spending extra.

Underscoring the shift in world commerce, Southeast Asia has change into Beijing’s largest buying and selling companion and helped propel China’s world exports to develop by 5.5% final 12 months, regardless of a 20% drop in shipments to the U.S. as a result of commerce battle.

U.S. logistics large FedEx can also be navigating what its CEO Raj Subramaniam calls “re-globalization,” based on his latest interview with the New York Instances.

Within the final six months, FedEx has opened services in Istanbul, Bangalore and Dublin, Subramaniam stated. “We have executed totally different strikes round Intra-Asia. A brand new platform in Osaka.”

Such selections do not come evenly in a world rocked by U.S.-China tensions. Subramaniam can also be chair of the U.S.-China Enterprise Council, which meets often with Chinese language policymakers.

The worldwide commerce shifts additionally have an effect inside China.

In a presentation to reporters final week, Cui Shoujun, a professor at Renmin College of China’s Faculty of Worldwide Research, identified that firms are hiring extra international relations graduates — who simply 10 years in the past would have largely headed to authorities jobs.

If commerce tensions are right here to remain, Chinese language firms are utilizing human expertise and manufacturing facility enlargement to adapt.

Jeff Mahon, Director of Worldwide Enterprise and Geopolitical Advisory at StrategyCorp, mentioned the latest reset in China-Canada relations – and why Canada has been put ready to develop a extra pragmatic method with China.

Sam Radwan of Improve Worldwide predicted an additional 40% correction in China’s actual property market by 2030 and stated it was a systemic concern.

Goldman Sachs’ Hui Shan stated that whereas China has made progress diversifying exports, shifting its financial system from property and infrastructure towards consumption and providers requires bolder coverage motion.

China markets rose Wednesday in opposition to a subdued regional backdrop as buyers monitored geopolitical tensions following contemporary tariffs from U.S. President Donald Trump tied to Greenland.

Hong Kong’s Hold Seng Index rose over 0.3%, placing its year-to-date beneficial properties at 3.7%.

Mainland’s China CSI 300 closed almost flat, up 0.09%, and is 2.01% increased for the 12 months. 

Jan. 19-22: Chinese language Vice Premier He Lifeng to go to Switzerland and attend the World Financial Discussion board at Davos

Jan. 27: Industrial income for December