The Chinese New Year is almost upon us, and perhaps its animal for 2017 is timely in our current political climate. According to astrologers, the Rooster is cocky, opinionated and attention seeking - sound familiar?

China, one of the powerhouse economies of the world, is entering an uncertain New Year now that Donald Trump rules the roost in Washington. For years it has been tipped to take over America as the biggest global economy. But now its fortunes (and indeed ours) hinge on whether President Trump’s hard-line protectionist agenda will ruffle feathers and ultimately lead to a trade war.

The omens might not look terrific (to use one of the Donald’s favourite words). In just one week, he has accused China of currency manipulation, threatened steep import tariffs on Chinese goods and even indicated that the US will recommence official relations with Taiwan, despite objections from China.

Jason Hollands from investment firm Tilney Bestinvest says a Sino-American trade war would be 'highly damaging' for the entire global economy, but with China really losing out given its trade surplus. 'While the era of Trump could lead to a wide range of potential outcomes for the US, from supercharged growth to spiralling inflation and indebtedness, it is particularly difficult to see it as bullish for China.' This could be why Asian funds saw outflows of £147 million in November, according to the latest stats from the Investment Association.

So why do so many fund managers remain (surprisingly) upbeat about China? Take Dale Nicholls, portfolio manager of the Fidelity China Special Situations investment trust, who says: 'When I speak to companies in China, Trump is not a major talking point, partly due to the lack of real clarity around policy but also because the companies continue to focus on the significant domestic market opportunities ahead of them.'

Then there’s Will Hobbs and Chris Stevenson of Barclays Investment, who say China still ticks all the boxes when it comes to emerging markets with credible macroeconomic policies, structural growth, decent governance and liquid, diversified markets.

Many believe China has the fiscal tools in place to manage any future instability, though there is speculation that Beijing could ape Trumponomics and boost infrastructure spending to maintain growth. Some even believe a trade war could lead to long-overdue changes that will ultimately benefit China.

Nicholas Yeo, a manager on the Aberdeen New Dawn and Aberdeen Asian Smaller Companies investment trusts, says: 'In the long term, it would compel policymakers to accelerate structural reform of outmoded state-owned sectors.' The country’s notoriously sluggish state-owned enterprises are already undergoing a gradual reform to let market forces play a bigger role. 'It’s all part and parcel of China’s boom-bust transition from an insulated and impoverished nation of farmers to a liberalised and prosperous global powerhouse.'

Fund managers also point to an increasingly wealthy population with bags of discretionary spending – just think of the Chinese demand for our own luxury brands, like Burberry, in recent years. This is why commentators are talking about a 'new' China, powered by consumerist appetites that can’t be easily restricted by the Government.

Ed Smith, asset allocation strategist at Rathbones, believes China is far less vulnerable to American protectionism than other emerging markets. 'China is not without its problems, such as a rapid accumulation of debt and an acute drop in productivity growth. But we believe that there are reasons to be more optimistic on the country’s prospects this year than many out there envisage.' Rathbones own 'nowcast' of Chinese growth suggests that the country’s much-trumpeted downturn reached its nadir towards the end of 2015.

Indeed, the Chinese economy continues to defy its many doubters. Much like the UK, predictions of a collapse in the Chinese housing market have yet to be (substantially) realised. High levels of debt continue to cause alarm but while it continues to be funded by domestic savings, even China’s most bearish critics say a potential crisis should be kept at bay for some years to come (if it even happens).

But still, rooster politicians like Trump should provide investors with a wake-up call. When it comes to your investment portfolio, always look at the long-term - and never put all your eggs in one basket.

Iona Bain is a financial journalist and founder of youngmoneyblog.co.uk