By Farah Master, Colleen Howe and Liz Lee
HONG KONG/BEIJING (Reuters) – British Prime Minister Keir Starmer’s visit to China is the latest victory Beijing can claim in its competition with Washington, but the deal he brings back to London also shows the limits of the balancing role middle powers may try to play.
He follows Canadian counterpart Mark Carney, who struck a trade deal on a similar trip weeks ago before heading to Davos to announce a new global trade order as U.S. President Donald Trump undermines long-standing relationships with allies.
European leaders have also visited since Trump began his second term a year ago, as has Indian Prime Minister Narendra Modi and others, but it is unclear what tangible long-term economic and security benefits such visits would bring to Western powers.
“America’s traditional allies feel bad and are now hedging their bets, but they are far from capable or willing to replace the United States with China,” said John Quelch, a global strategy expert at Duke Kunshan University.
From the perspective of London, Ottawa and other Western capitals, the visits signal to Trump that alternatives exist if he keeps up pressure on Greenland to renegotiate the USMCA trade deal between the United States, Canada and Mexico.
But Alicia Garcia-Herrero, chief Asia-Pacific economist at Natixis, said these were “superficial gestures at a time when global growth is stalling.”
“These visits highlight the tight restrictions on any ‘pivot’ to China,” she said. “They have exposed the fragility of middle powers, chasing scraps as China’s torrent of exports swamps their industries.”
They support the narrative of a broad shift toward China as a “reliable partner” to the world that benefits Beijing, in contrast to Trump’s chaotic tariff policy and his mounting threats and demands on partners and rivals.
“President Trump’s efforts to decouple the United States from China also decouple the United States from the world,” Quelch added.
STARMER wins on visas, whiskey
The reward for deals struck by Western powers on such visits is deeper integration with a country that last year ran a trade surplus the size of the Dutch economy but whose consumption is too weak for even its own producers to prosper at home.
During a visit to the world’s second-largest economy, Starmer offered 30 days of visa-free travel to China for Britons and reduced tariffs on whiskey, while British drugmaker AstraZeneca announced a $15 billion investment in China.
He offered nothing more than a “candid conversation” about tensions over China’s increasingly assertive stance on Taiwan, strengthening ties with Russia following the Ukraine invasion and a rights crackdown in the former British colony of Hong Kong.
British and American politicians criticizing Starmer’s trip have also raised accusations of espionage and human rights abuses, which Beijing denies.
Likewise, Carney left China with the expectation that Beijing would reduce or eliminate tariffs on canola, lobster, crab and peas, but this prompted threats of 100% tariffs from Trump, who warned Ottawa not to allow Chinese electric vehicles into North America.
Even before Starmer concluded his trip to China, Trump warned Britain of the dangers of doing business with Beijing, after the prime minister praised the economic benefits of renewed ties with China.
China’s export-driven growth poses risks to the West
China’s imports were flat last year at $2.6 trillion, but were driven primarily by energy and commodities from emerging markets rather than the West.
Yet its trade surplus jumped by a fifth to a record $1.2 trillion as its manufacturers muscled their way into nearly every other market in the world in response to Trump’s tariffs at the expense of domestic producers.
Such a growth rate will make China’s trade surplus expected to roughly reach the size of the French economy of US$3 trillion in 2030, and reach the size of the German economy of US$5 trillion in 2033.
Its exports to the EU rose by 8.4% last year, while imports fell by 0.4%. China’s exports to the UK increased by 7.8%, while purchases fell by 4.7%. Sales in Canada increased by 3.2%, while purchases fell by 10.4%.
Eswar Prasad, former China director of the International Monetary Fund (IMF), said: “Significantly increasing trade integration with China is a particularly dangerous proposition for countries trying to protect or develop their own manufacturing industries.”
“It will be difficult for China to provide safe harbor to countries trying to cope with the adverse economic impact of U.S. tariffs,” added Prasad, who now teaches trade policy at Cornell University.
However, some analysts say that for countries such as the United Kingdom or Canada, a major trade victory with China may not be that important or even realistic at the moment.
Resetting relations may be the best they can get, but it may still be valuable because previous deteriorations in relations exposed supply chains’ heavy dependence on China.
Analysts say the Asian giant’s trade countermeasures are helping to widen rather than narrow the two-way trade imbalance.
Noah Barkin, a Europe-China expert at the German Marshall Fund and Rhodium Group, said the visit by Starmer and Carney was “a propaganda coup by Beijing” while warning, “This is not a pivot towards China. It is about easing tensions with Beijing.”
“No country wants to be in open conflict with two superpowers at the same time,” he added.
(Additional reporting by Gao Liangping and Kevin Yao in Beijing and David Kirton in Shenzhen; Writing by Marius Zaharia; Editing by Clarence Fernandez)
