Chinese exporters have also been increasingly offshoring production and exports to mitigate risks. “Exporters are definitely nervous,” Guo said. “Beijing is supportive of firms offshoring now because it’s an inevitable trend.”
She adds: “It’s clear that China is welcoming investors from ASEAN, Japan, Europe, and the US – basically everyone around the world.”
“As long as they are interested in the Chinese market, they are welcome to have a good trade and investment relationship with China.”
Beijing is also working to shore up relationships abroad, analysts say, highlighting intensified engagement with both regional and global partners in recent weeks.
That extends to overtures to Europe, where Chinese officials have been discussing international trade cooperation and how to manage disputes.
“There will be more time between China and Europe to figure out how to deal with each other,” noted Guo.
Experts note that Beijing has been turning to diplomacy not only as a hedge against further escalation with the US, but also as a way of deepening trade integration with partners also been hit by Washington’s widening tariff regime.
China, Japan and South Korea recently agreed to enhance cooperation and accelerate negotiations on their trilateral free trade agreement – a move that would have been unlikely between the three East Asian rival powers just months ago amid ongoing historical frictions.
“That was a remarkable breakthrough in relations,” said Mahoney.
China is also leaning into its leadership role within the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade bloc which also includes all 10 ASEAN states.
The bloc would serve as a natural platform for China in fostering closer cooperation with other countries also facing challenges from Washington’s tariffs.
“RCEP member countries will naturally deepen trade ties with one another,” said EIU’s Su, highlighting that China’s relative economic stability could make it a more attractive partner in the months ahead.
But she also highlighted limits that came with diplomatic realignment. While several nations have expressed interest in deepening economic ties with China, the RCEP alone was unlikely to fully absorb shock from a weakening global economy.
“Weak consumption will prevent China from replacing the US as a source of demand anytime soon,” she said.
For now, Beijing appears intent on showing that it still has room to manoeuvre – and is willing to play the long game.
As Mahoney puts it: “The possibility of a grand bargain with the US, or some (other) dealmaking, might still be possible, but it seems rather far at present.”
