Donald Trump’s forthcoming visit to Beijing in May follows trips by Canada’s Mark Carney, the UK’s Keir Starmer, and Germany’s Friedrich Merz. The agreements reached, says Dominika Remžová, reflect not only the interests of political elites but also how economic structures shape each country’s China policy
In response to growing uncertainty about US leadership of the liberal democratic order, leaders across the Global North are calling for closer engagement with China. Carney, Starmer, and Merz have all emphasised strategic pragmatism during their visits. While expressing openness to Chinese clean-tech investment, each leader highlighted different trade priorities. Canada focused on exports of agricultural goods, the UK on financial and professional services, Germany on manufacturing products.
This broadly mirrors public opinion. Recent polls suggest that growing shares of the population in these three countries see China as more technologically advanced and reliable than the US. Citizens also see reducing dependence on China as less feasible than reducing dependence on the US. This does not, however, amount to wholesale reassessment of Beijing’s policies. Views of China’s leadership remain predominantly negative, although the recent uptick in positive views is notable; the first major improvement since historic lows during Covid-19.
The UK, Germany, and Canada are all mixed (either liberal or coordinated) market economies that produce more than they consume. Their sectoral strengths, however, differ. In GDP terms, Canada relies significantly on energy and raw materials, Germany on manufacturing, the UK on services. All three have expanding green-tech sectors.
This distinguishes them from the US, whose unique position as a major global producer and consumer of fossil fuels gives it greater scope to pursue a more self-sufficient (in Trump’s case, petrostate-oriented) model. This means the US could significantly reduce its dependence on Chinese clean-tech supply chains. The UK, Germany, and Canada are neither capable nor willing to decouple from China; hence their respective approaches to de-risking.
The US could reduce its dependence on Chinese clean-tech supply chains but the UK, Germany, and Canada are neither capable nor willing to decouple from China
For these three countries, engagement makes sense, but only as a tool rather than a new paradigm. This distinction matters. The chief architect of the Washington Consensus has abandoned the neoliberal paradigm. Yet mercantilism is inherent to China’s state-led economic model, including its long-term goal of self-reliance, captured in the Dual Circulation Strategy.
Moreover, China remains an illiberal party-state that pursues bilateral multilateralism in its global engagements. All this sits uneasily alongside the countries’ preference for open markets and multilateral rules, though selective adoption of elements of the Beijing Consensus – especially its focus on industrial policy – is increasingly encouraged.
The agreements signed during the visits reflect Western preferences for free trade and each country’s sectoral strengths. This creates distinct opportunities and challenges vis-à-vis Beijing.
A major outcome of Carney’s trip was the reduction in Chinese tariffs on Canadian canola seed and other agri-food exports. In return, Canada eased restrictions on Chinese electric vehicles (EVs), replacing a 100% tariff regime introduced in 2024 (in coordination with the US) with a quota system allowing for annual imports of 49,000 vehicles under a most-favoured-nation tariff rate. This contrasts with more restrictive approaches in the US and the EU, though the latter recently allowed price undertakings as an alternative to its 2024 tariff regime, while aligning more closely with the UK's more permissive approach. Both the UK and Canada have less significant domestic car industries than Germany and the US.
Starmer’s visit focused on expanding access to the Chinese market for legal, financial and health services. This resulted in investment deals involving Octopus (energy) and AstraZeneca (pharmaceuticals). The latter announced a $15bn investment in China-based R&D activities. Chinese clean-tech firms have also gained greater market access. HiTHIUM (energy) announced £200m investment in the UK’s grid infrastructure, and Chery (EVs) committed to establishing its European headquarters in Liverpool.
Merz’s trip focused on boosting German industrial exports, particularly in higher-value manufacturing. The only significant outcome, however, was China’s commitment to purchase 120 Airbus aircraft.
While the signed agreements reflected Western preferences for free trade and each country’s sectoral strengths, it's China that will benefit from greater investment as a result of them
Despite their varied focus and scope, all three visits produced only modest outcomes for the Western states. Greater investment and value-added flows to China than the other way around. This is not surprising, given China’s position as the world’s largest exporter and a leading mercantilist power.
Among the three, the UK’s service-oriented economy appears most complementary to China’s manufacturing strength. China’s efforts to boost domestic consumption, including developing its service sector, could open opportunities for UK exporters. In practice, however, China remains heavily focused on production, limiting opportunities for foreign service providers.
Moreover, China’s continued lack of reciprocity in market access, and the conditionality attached to imports and investments – as reflected in Octopus’s joint venture arrangements – are unlikely to change. Challenges will likely continue to outweigh opportunities. Germany’s automotive, machinery, and chemical industries are particularly vulnerable, because they compete directly with Chinese firms that increasingly outperform their European counterparts on price and quality.
Domestic politics further complicates the states’ pursuit of a coherent China policy. Democratic governments – liberal and illiberal – must balance competing pressures from different industries with their own interests. In Germany, export sectors pull government policy in different directions, resulting in cautious engagement mixed with strategic concern, and oscillating between hawkish and dovish rhetoric. This incoherence is deepening vulnerabilities at a time when global economic policy is shifting towards protectionism, industrial policy, and self-sufficiency.
Democratic governments – liberal and illiberal – must balance competing pressures from different industries, each with their own interests, while pursuing a coherent China policy
In the short-term, Chinese green-tech imports may support the three states’ energy transitions. But stricter conditionality should be attached. The local content requirements of the EU’s Industrial Accelerator Act are increasingly insufficient if the EU is to avoid a de-industrialised future that would damage the industrial core of Germany and Central and Eastern Europe.
Addressing this challenge requires selectively adopting elements from the China playbook, and developing coherent China policies at national and (for EU member states) supranational levels. These policies must be grounded in a clear understanding of China’s economic model and its implications for global engagement. If G7 countries continue along neoliberal pathways, they must treat engagement with China as a tool that aligns with their long-term national interests, rather than as a paradigm that reshapes them.
