China’s new international playbook —from exporter to investor

This report is from this week’s CNBC’s The China Connection publication, 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 shifting from international 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 speedy considerations on the Chinese language facet was its native investments.

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

Looking forward to 2026, the Monetary Occasions’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 be shifting. Extra Chinese language abroad investments are in tech and manufacturing, partly as a result of tariffs are pushing Chinese language electrical automobile 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 automobile firm Neolix has begun receiving international guests, together with logistics companies and the French Ministry of Transportation, Will Zhao, govt president of Neolix, instructed me final week.

“2025 was the 12 months we began to essentially make this type of contact with international potential companions,” he stated, noting these companions embody consultants or attorneys who work with native authorities on autonomous automobile regulation.

“A number 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 outdoors China this 12 months and enter three new nations, ideally in Europe.

Commerce inside Asia is a “mega theme” for the 12 months forward, international 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, shopper markets, and digital enablement.”

China has elevated its market share not solely by exports, KKR stated, however by constructing native operations in nations equivalent 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 international commerce, Southeast Asia has turn out to be Beijing’s largest buying and selling associate and helped propel China’s international exports to develop by 5.5% final 12 months, regardless of a 20% drop in shipments to the U.S. because of the commerce battle.

U.S. logistics big FedEx can be navigating what its CEO Raj Subramaniam calls “re-globalization,” in accordance with his current interview with the New York Occasions.

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

Such choices do not come evenly in a world rocked by U.S.-China tensions. Subramaniam can be chair of the U.S.-China Enterprise Council, which meets frequently 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 College of Worldwide Research, identified that firms are hiring extra overseas 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 growth to adapt.

Hong Kong’s Cling 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.