Starwood Capital's Barry Sternlicht says China knows there's a new sheriff in town in Trump

Barry Sternlicht
David Orrell | CNBC

China "respects strength," and that could bode well for relations between Washington and Beijing under Donald Trump's presidency, global investor Barry Sternlicht told CNBC on Monday.

Sternlicht, founder, chairman and CEO of the $51 billion investment firm Starwood Capital Group, said on "Squawk Box" that China knows things have changed with the Trump win.

"A strong U.S. economy, regardless how it happens, is good for the Chinese," he argued, saying he's optimistic about the American economy under Trump.

Following their first post-election talk, Trump and China's president held a telephone call over the weekend, and established a "mutual respect," according to a statement from the president-elect's transition team.

Trump was highly critical of China throughout the campaign, drumming up headlines with his pledges to slap 45 percent tariffs on imported Chinese goods and to label the country a currency manipulator on his first day in office.

Trump wants to be the best president of all time: Barry Sternlicht

Sternlicht suggested Trump may need to temper that kind of rhetoric if he wants to succeed. "If you want to be great in this country as president, you have to go to the center," he said. "If that happens, he has a chance to be great.

In May, during the thick of the presidential race, Sternlicht told CNBC he knows both Trump and Democratic nominee Hillary Clinton, and could support either of them if they move to the center.

Sternlicht said Monday he expects Trump will rely on his advisors. "Everything for Trump, I think for those of us know him, will be about his Cabinet. Donald will delegate. He will go to experts in fields and instincts ... will drive his thoughts."

Over the weekend, Trump chose Republican National Committee Chairman Reince Priebus to be his chief of staff and Steve Bannon, ex-president of conservative Breitbart News and more recently chief of Trump's campaign, to serve as "chief strategist and senior counselor."

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— Reuters contributed to this report.