China’s new global strategy — from exporters to investors

This report is from CNBC’s The China Connection newsletter this week, delivering insights and analysis on the powerhouse of the world’s second-largest economy. You can subscribe here.

China is transitioning from a global exporter to an investor, precisely in the region that the United States is focusing on.

One of China’s immediate concerns has been local investment this year, as President Donald Trump has increased U.S. influence in Venezuela, Iran and Greenland.

Speaking at Davos on Tuesday, Chinese Vice Premier He Lifeng appealed to world leaders to provide a fair and predictable environment for Chinese companies operating overseas.

Significant investments in factories and technology are at stake. China’s trade surplus will soar to a record $1.2 trillion in 2025, while Beijing’s transactions and contracts with countries tied to the Belt and Road Initiative soar to new highs. Latin America, the Middle East and Africa are key regions for this initiative and are widely seen as routes for China to build global influence.

Looking ahead to 2026, the Financial Times’ FDI Intelligence Survey predicts that China will become the largest source of foreign direct investment in 2026, overtaking the United Arab Emirates and then India. The United States tied for fourth place with Saudi Arabia.

The composition of that investment is also changing. China’s overseas investment is increasing in technology and manufacturing, in part because tariffs are encouraging Chinese electric car companies to localize production overseas.

Global companies and leaders are also interested in how Chinese technology develops.

Over the past six months, Beijing-based self-driving delivery vehicle company Neolix has begun hosting visitors from around the world, including logistics companies and the French Ministry of Transport, Neolix executive president Will Zhao told me last week.

“2025 was the year we really started making these kinds of contacts with potential partners around the world,” he said, noting that those partners include consultants and lawyers working with local governments on regulating self-driving cars.

“Many countries want our investment in manufacturing,” Zhao pointed out.

Neolix received its license to operate in the UAE late last year and announced a strategic partnership with the Portuguese mobility company earlier this month. Zhao said the company plans to deploy more than 10,000 self-driving delivery vehicles outside China this year and enter three new countries, ideally Europe.

However, Chinese companies do not necessarily have to look far to expand overseas.

Global investment firm KKR said in its 2026 macro outlook that intra-Asia trade will be a “huge theme” for the year ahead. “For us at KKR, this is a scalable long-term trend with real investment potential across logistics, manufacturing, consumer markets and digital enablement.”

According to KKR, China is increasing its market share not only by exporting but also by building local operations in countries such as Vietnam.

“One new benefit for the region is that countries are increasingly trading in the renminbi, a trend that has gained momentum post-COVID-19,” the report said.

This trend was accelerating even before President Trump’s latest global tariffs.

By 2024, 60% of Asia’s trade will already be intra-regional, and KKR predicts it will grow by 8% in the following years. A key factor, the report says, is that the region’s more than 800 million millennials are reaching an age where they can spend more.

Underscoring the changes in global trade, Southeast Asia has become Beijing’s largest trading partner and was the driving force behind a 5.5% increase in China’s global exports last year, despite a 20% drop in shipments to the United States due to the trade war.

US logistics giant FedEx is also embarking on what its CEO Raj Subramaniam calls “re-globalization,” according to a recent interview with The New York Times.

Subramaniam said FedEx has opened facilities in Istanbul, Bangalore and Dublin in the past six months. “We have been making various moves within Asia. A new platform in Osaka.”

In a world shaken by tensions between the United States and China, such decisions are not made lightly. Subramaniam also chairs the U.S.-China Business Council, which meets regularly with Chinese policymakers.

Changes in global trade also have an impact within China.

In a presentation to reporters last week, Professor Cui Shoujun of Renmin University’s School of International Relations pointed out that companies are hiring more foreign relations graduates. Just 10 years ago, most of them would have worked in government jobs.

If trade tensions continue, Chinese companies are looking to adapt by leveraging talent and factory expansion.

Geoff Mahon, director of international business and geopolitical advisory at StrategyCorp, spoke about the recent reset in China-Canada relations and why Canada is positioned to develop a more pragmatic approach to China.

Sam Radwan of Enhance International predicts that China’s real estate market will correct by another 40% by 2030, saying this is a systemic problem.

Goldman Sachs’ Hui Xiang said China is making progress in diversifying its exports, but bolder policy measures are needed to shift the economy from real estate and infrastructure to consumption and services.

Chinese markets rose on Wednesday on the back of weakness in the region as investors kept an eye on geopolitical tensions following new tariffs on Greenland by US President Donald Trump.

Hong Kong’s Hang Seng index rose more than 0.3%, taking its year-to-date rise to 3.7%.

The mainland China CSI 300 index ended almost flat with a gain of 0.09%, and is up 2.01% since the beginning of the year.

January 19-22: Chinese Vice Premier He Lifeng visits Switzerland and attends the World Economic Forum in Davos

January 27: December industrial profits