Economic determinants of the formation of China’s diversified and sustainable foreign policy and trade

Abstract

This article examines how China is making its foreign policy and trade more diverse and resilient. China’s economy has slowed, and the country faces strong technological pressure from the United States. In response, Beijing is using several tools: the “dual circulation” strategy, the new 15th Five-Year Plan (2026–2030), and a shift of trade toward ASEAN and Belt and Road partners rather than Western markets alone. This article describes these tools and explains what they mean for Ukraine’s foreign trade policy, both during the war and after it. The article draws on official Chinese and Ukrainian trade and economic data from 2021 to mid-2026, along with statements by China’s Ministry of Foreign Affairs on the war in Ukraine. The analysis shows that China’s export growth remains much faster than domestic consumption growth, so the dual circulation strategy has not yet reached its main goal. It also shows that China keeps repeating the same official position on Ukraine — respect for sovereignty and territorial integrity, and peace based on the UN Charter — while keeping close economic ties with Russia at the same time. Trade data show that China was Ukraine’s largest single trading partner before 2022, and that Ukraine’s exports to China have fallen much faster than Chinese exports to Ukraine during the war. Based on these findings, the article suggests that Ukraine’s future policy toward China should be selective rather than all-or-nothing: keep trade ties in sectors such as agriculture and machinery, apply the same rules the EU uses for Chinese investment, and link any closer cooperation to a peace that restores Ukraine’s territory. The article draws on the authors’ earlier research on China’s trade policy and offers a short, practical framework for Ukraine’s policy toward China. Keywords: China, foreign policy, foreign trade, dual circulation, 15th Five-Year Plan, Belt and Road Initiative, economic resilience, China–Ukraine relations, territorial integrity, post-war reconstruction.