Visit by Britain’s Starmer shows drawbacks of ‘China pivot’ in countering Trump

By Farah Master, Colleen Howe and Liz Lee

HONG KONG/BEIJING, January 30 (Reuters) – British Prime Minister Keir Starmer’s visit to China is the latest victory for Beijing in its rivalry with Washington, but the deals he brings to London also show the limits of the balancing act that middle powers can try to play.

He follows his Canadian counterpart, Mark Carney, who struck a trade deal weeks ago on a similar visit before traveling to Davos to herald a new global trade order as US President Donald Trump soured long-standing ties with allies.

European leaders, India’s Narendra Modi and others have visited since Trump’s second inauguration a year ago; But it is less clear what long-term economic and security benefits such visits provide to Western powers.

“Traditional U.S. allies feel challenged and are now hedging their bets, but they are a long way from replacing China with the United States,” said John Quelch, a global strategist at Duke Kunshan University.

From the perspective of London, Ottawa and other Western capitals, the visits show alternatives exist to Trump if he keeps up the pressure on issues from Greenland to renegotiating the USMCA trade agreement between the United States, Canada and Mexico.

But Alicia Garcia-Herrero, chief Asia-Pacific economist at Natixis, said these were “superficial gestures in an environment where global growth has stalled.”

“These visits highlight the serious limits of any ‘pivot’ towards China,” he said. “They are exposing the fragility of middle powers, chasing after scraps, as China’s flood of exports disrupts their industries.”

And they benefit Beijing by promoting broad-based narratives that China is the world’s “reliable partner” despite Trump’s chaotic tariff policies and a growing list of threats and demands against both its partners and rivals.

“President Trump’s efforts to separate the United States from China also separate the United States from the world,” Quelch added.

STARMER POINTS EARNED IN VISA AND WHISKEY

The agreements reached by Western powers as a result of such visits have come in exchange for deeper integration with a country that last year had a trade surplus the size of the Dutch economy but where consumption is so weak that even its own producers cannot prosper.

During his trip to the world’s second largest economy, Starmer provided 30-day visa-free access and reduced whiskey tariffs for Britons traveling to China, while British pharmaceutical manufacturer AstraZeneca announced that it would invest $15 billion in China.

He has achieved nothing but “open dialogue” on tensions arising from China’s increasingly assertive stance on Taiwan, stronger ties with Russia after the Ukraine invasion, and a crackdown on rights in Britain’s former colony of Hong Kong.

British and US politicians critical of Starmer’s trip also raised accusations of espionage and human rights abuses, which Beijing denied.

Similarly, Carney left China with the expectation that Beijing would cut or lower tariffs on canola, lobster, crab and peas; but this triggered a 100% tariff threat from Trump, who warned Ottawa against allowing Chinese electric vehicles into North America.

Even before Starmer wrapped up his visit to China, Trump warned Britain that doing business with Beijing was dangerous after the prime minister touted the economic benefits of resetting relations with China.

CHINA’S EXPORT-FOCUSED GROWTH CREATES A RISK FOR THE WEST

China’s imports last year remained steady at $2.6 trillion, but those imports were largely driven by energy and commodities from emerging markets rather than the West.

However, the trade surplus rose by a fifth to a record $1.2 trillion as manufacturers responded to Trump’s tariff measures by turning to almost every other market in the world, at the expense of domestic producers.

Such a slow growth rate would allow China’s trade surplus to reach roughly the size of the $3 trillion French economy by 2030 and the $5 trillion German economy by 2033.

Last year, exports to the European Union increased by 8.4%, while imports decreased by 0.4%. While China shipped 7.8% more products to the UK, it bought 4.7% less. In Canada, sales rose 3.2% while purchases fell 10.4%.

“This makes it a particularly risky proposition for countries seeking to maintain or grow their own manufacturing industries to significantly increase trade integration with China,” said Eswar Prasad, a former China director at the International Monetary Fund.

“China does not provide much of a safe haven for countries trying to cope with the negative economic impacts of U.S. tariffs,” added Prasad, who now teaches trade policy at Cornell University.

Still, some analysts say the significant trade gains with China may not be as important, or even realistic, for countries like Britain or Canada right now.

Resetting relations may be their best bet, but this may still be valuable as the previous deterioration in relations has exposed critical dependencies on China in the supply chain.

Analysts said the Asian giant’s trade measures helped widen two-way trade imbalances rather than narrow them.

Noah Barkin, Europe-China expert at the German Marshall Fund and Rhodium Group, said Starmer and Carney’s visits were “a propaganda coup for Beijing” and warned: “This is not a turning point towards China. This is about reducing tensions with Beijing.”

“No country wants to engage in open conflict with two superpowers at the same time.”

(Additional reporting by Liangping Gao ‌and Kevin Yao in Beijing and David Kirton in Shenzhen; Writing by Marius Zaharia; Editing by Clarence Fernandez)