China’s president, Xi Jinping, has met along with his American counterpart, Donald Trump, for his or her first face-to-face talks in six years. Trump emerged from the assembly in South Korea in a buoyant temper, describing it as a 12 on a scale of 1 to 10. He’s now pronouncing the United States will decrease price lists on Chinese language imports, with Beijing giving the United States higher get admission to to uncommon earths in go back.
The Chinese language govt’s reaction used to be, when put next, rather muted. In a observation, the international ministry declared that each side had exchanged perspectives on “important economic and trade issues” and mentioned Xi used to be “ready to continue working” with Trump “to build a solid foundation for China and the US”.
In spite of the optimism on display in South Korea, there may be nonetheless a lot to be completed earlier than a industry deal between the 2 international locations is signed. On the identical time, Chinese language officers seem to stay wary of the Trump management’s unpredictability and its destructive attainable for his or her nation’s economic system.
Trump and Xi’s assembly got here one week after China’s best management laid out their building priorities for the following 5 years, after 4 days of debate in Beijing. Their message is obvious: China wishes to spice up its self-reliance.
Officers from the Chinese language Communist birthday celebration turning in a press convention after their four-day assembly in Beijing.
Andres Martinez Casares / EPA
China has been reeling from an financial slowdown in recent times. A assets marketplace crash in 2021, which noticed a number of primary builders default on their money owed, brought about hundreds of thousands of Chinese language other folks to lose wealth. This has dampened client spending and has lowered self assurance within the economic system.
Since China started transferring from central making plans to a extra market-oriented economic system in 1978, it has loved nice luck by way of depending on two mechanisms to stimulate enlargement. The primary is attracting funding within the infrastructure and actual property sectors. The second one, which is in large part regarded as the main driving force of China’s peculiar enlargement, is the export of manufactured items.
Alternatively, funding in China’s infrastructure and assets sectors has been lacklustre at absolute best in recent times. On the identical time, China has been embroiled in a industry conflict with the United States – the biggest importer of Chinese language items – since 2018. This era has been marked by way of cycles of escalating price lists and retaliatory measures.
The exterior surroundings has transform more and more unsure following Trump’s go back to the White Area in January 2025. Trump took Washington’s disagreement with Beijing to bigger heights, implementing price lists of 145% on maximum Chinese language items. Even though many of those measures have been later eased, the volatility of the 2 international locations’ industry courting used to be additional evidenced when Trump threatened to reinstate 100% price lists on Chinese language exports simply weeks earlier than the Seoul assembly.
So, relatively than depending closely on exports, Chinese language officers have introduced that they intend to stimulate enlargement by way of boosting home intake. Their plan is to create extra task alternatives and support healthcare and social advantages to lend a hand carry residing requirements. This will have to permit Chinese language shoppers to shop for extra items and services and products.
Alternatively, bettering home intake will probably be no simple feat. China has vulnerable social safety nets, which inspire shoppers to avoid wasting extra for unsure occasions. Native governments in China, which offer public services and products, have additionally incurred massive quantities of debt prior to now from over the top borrowing to fund tasks. How China intends to support residing requirements amid such debt isn’t sure.
A girl strolling previous a Gucci retailer in Chongqing, China.
Vincent_Nguyen / Shutterstock
Any other key a part of China’s financial plans is to transform the sector’s chief in AI and tech by way of 2035. This, like the federal government’s plans to spice up financial enlargement, may even require self-reliance. The USA has imposed sweeping tech restrictions in recent times to stop complex semiconductors and AI chips made by way of US companies from coming into China.
Those restrictions have intensified because the get started of Trump’s 2nd time period. In Might 2025, for instance, the Trump management ordered US chip design tool makers to halt all gross sales to China. Or even after Trump’s fresh assembly with Xi, exports of complex US era to China nonetheless seem like they’re going to be in large part limited.
Trump mentioned the 2 leaders mentioned China buying some chips from US companies. However he clarified that the deal would now not come with Blackwell, Nvidia’s maximum complex semiconductor, which US lawmakers have warned in opposition to permitting China to acquire. The Chinese language govt has now not discussed any settlement with the United States referring to semiconductors.
Because it stands, the United States appears to be bent on making sure that China is not able to get admission to the tech that would assist Beijing in creating its computing and army prowess. So, to reach tech superiority, China’s leaders have pledged extra funding in schooling and ability. They have got additionally promised measures to safeguard highbrow assets.
Political survival
For years, China’s ruling communist birthday celebration has depended on financial prosperity and nationalism to legitimise its rule. However Xi’s talent to retain regulate could be undermined by way of China’s financial slowdown.
China wishes a destroy from its exterior troubles, which were brought about by way of the United States industry conflict and tech restrictions. And by way of dominating the manufacturing of uncommon earths, a bunch of metals the most important for high-tech production, China has a formidable trump card.
In early October, Beijing positioned restrictions at the export of uncommon earths in a transfer that now seems to were a calculated effort to make stronger China’s negotiating place with Washington. The tactic seems to have paid off, resulting in a discount of US price lists on Chinese language items.
In the end, Xi wishes victories of this type to stay on the best of Chinese language politics. If financial troubles aggravate and enlargement continues to falter, even a pace-setter as tough as Xi might uncover that loyalty sustained by way of rhetoric can’t be sustained.
