China

China’s Complex Relationship With Elon Musk: Hero or Villain?

In China, Elon Musk has gained both admiration and criticism. While he is seen as a visionary, he has faced scrutiny from regulators and the public due to issues with customer complaints. The success of Musk’s SpaceX and its Starlink satellite service has also led to concerns from the People’s Liberation Army, especially as Tesla faces growing competition from Chinese electric vehicle (EV) manufacturers, which threatens Musk’s standing in the market.

Musk recently attended a summit in Beijing with U. S. President Donald Trump, alongside other CEOs like Tim Cook and Jensen Huang, focusing on resolving business issues with China. After a formal welcome, Musk expressed his desire to achieve “many good things” in the country. At the same event, Xiaomi’s CEO Lei Jun, an admirer of Musk, took a selfie with him, which became popular on social media, showcasing the public’s interest in Musk.

Despite facing competition on technology and pricing from local companies, Musk and Tesla remain influential in China. Experts note that Musk’s business goals align with China’s technological priorities, including electric vehicles, AI, and advanced robotics, making Tesla’s self-driving technology the standard in the industry. In 2018, Tesla became the first foreign automaker permitted to operate in China without a local partner, and its sales in the country reached about 626,000 vehicles last year, contributing significantly to its revenue.

Other Chinese carmakers, like Chery, draw inspiration from Tesla’s focus on innovation, blending it with Toyota’s emphasis on quality. However, Musk’s other ventures, particularly SpaceX, provoke concern among Chinese military and government officials due to its dominance in satellite communications, especially in light of geopolitical tensions, hinting at efforts to develop domestic alternatives.

Though Musk’s social media platform, X, is banned in China, he has a significant following on Weibo and has been celebrated as a global icon in the country. His recent visit pertains to an attempt to purchase $2.9 billion in solar manufacturing equipment from Chinese suppliers, although this may be affected by China’s potential export restrictions on advanced technologies to the U. S.

Musk’s company is also seeking regulatory approval for more advanced self-driving technology. However, his relationship with China has been delicate, particularly when Tesla faced backlash in 2021 over its handling of customer complaints, highlighted by a public protest at an auto show. Additionally, Teslas were previously banned from military areas due to security concerns.

Looking ahead, organizations believe that Tesla’s standing might challenge Musk’s popularity in China as local companies continue to progress. However, he is likely to remain an influential figure in China’s tech scene for his achievements in the automotive and technology industries.

With information from Reuters

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Column: Trump surrendered to China before he even landed there

Ahead of President Trump’s arrival in Beijing on Wednesday for his summit with Chinese President Xi Jinping, longtime China expert Kurt M. Campbell offered a novel way of watching the two leaders’ high-stakes faceoff. Think of it not as nation-versus-nation or army-versus-army, but as the sort of “single combat” celebrated in ancient literature, along the lines of David and Goliath in the Bible or Achilles and Hector in “The Iliad.”

“This one has the feel of a geopolitical heavyweight matchup,” Campbell, chairman of the Asia Group strategic consulting firm, wrote in Foreign Affairs this week.

Unlike in their initial get-together early in Trump’s first term, both men now are seasoned leaders in their separate ways — Xi an unchallenged dictator, and an envious Trump seeking to be. Both act with few immediate checks on their power, though Xi acts strategically and Trump impulsively and transactionally. And both, as leaders of super-powers, have the capability to shape the economic and security fates of a wary world.

That world, Campbell concluded in his essay, is “eager to see whether the two leaders emerge driving together in the chariot, or with one dragging the other behind,” as Achilles did the vanquished Hector.

However the Trump-Xi meeting ends, Trump is no Achilles going into this match. In fact, in the six decades of U.S.-China relations, perhaps no American president has entered the summit arena in a weaker position than Trump, the would-be strongman and artiste of the deal. Worse, his weakness — and by extension his country’s — is mostly self-inflicted.

Trump had postponed what was intended as an early April meeting in hopes of striding triumphantly into Beijing as the conqueror of Iran, a China ally. Instead China is receiving him as a “giant with a limp,” in the phrase of its Communist Party-controlled Global Times newspaper.

Trump’s Mideast war, the sort he’d promised never to start, lingers for a third month in a costly stalemate — $29 billion and counting — that has humiliated the president in the public words of Germany’s chancellor and the private thoughts of many more global leaders, Xi likely among them. Trump can’t “project the same arrogance” as he did visiting China in 2017, a former Chinese army officer, Yue Gang, told the New York Times.

At home, the conflict has caused gasoline prices and inflation to spike while tanking Trump’s already depressed polls. A newly released CNN poll conducted April 30 to May 4 had 65% of Americans disapproving of his overall job performance and a whopping 70% against his handling of the economy — the issue that arguably got him elected. With experience, American consumers and soybean farmers now know that they, not the Chinese, have paid for Trump’s beloved tariffs.

The president’s standing at home could hardly have been helped by his parting words to reporters at the White House. Asked “to what extent are Americans’ financial situation motivating you to make a deal” with Iran, Trump blithely replied, “Not even a little bit.” He added, in the sort of political gaffe that journalist Michael Kinsley defined as telling the truth: “I don’t think about Americans’ financial situation. I don’t think about anybody.”

He’s already a loser in the negotiations with Xi. For weeks the Trump administration has unsuccessfully urged China to use its leverage to goad Iran to accept a peace on Americans’ terms or, at a minimum, to reopen the Strait of Hormuz, given China’s self-interest as Iran’s biggest oil customer by far. As China scholar Henrietta Levin of the Center for Strategic and International Studies told the Associated Press, “I don’t think China has any interest in solving the problems the U.S. has created for itself in the Middle East.”

Not least, perhaps, because China has seen that, by the Pentagon’s own reckoning, the war has depleted U.S. stockpiles of weaponry after thousands upon thousands of strikes against Iran. And that has further raised questions in China and beyond about whether Trump would have the United States come to the defense of Taiwan, the self-governing, U.S.-armed island that China claims as its own.

After all, the thinking goes, if the United States can’t bring a lesser power like Iran quickly to heel, how might it fare against a near-peer such as China, especially with a diminished U.S. arsenal and Mideast distractions?

It’s mostly a mystery what the leaders’ talks might yield. In a break with diplomatic tradition, though not with Trump’s seat-of-the-pants style, apparently little planning went into this super-power summit — another reflection of a distracted U.S. side. Still, with a number of tech, agribusiness, finance and aerospace chieftains in tow, Trump and his team are hoping for a few politically appealing deliverables, such as sales of U.S. soybeans and Boeing aircraft, to give the president a lift back home.

But don’t look for progress on the longstanding issues dividing the United States and China over trade and military dominance in the Pacific region. And as for another of those perennial issues — climate change and clean-energy technology — the U.S. under Trump has willfully surrendered global preeminence to China, ceding markets for solar, wind energy, electric vehicles, grid storage and more in his backward-looking, ostrich-like obsession with drilling oil and mining coal.

Whatever hyperbolic claims Trump makes for his China trip, the outcome of the summit (on top of his quagmire in Iran) should at least be this: retiring the myth of Trump the deal-maker and savvy businessman.

If he were such a visionary, Trump would be prodding the nation to global leadership in technology and clean-energy investments, not reversing past progress and paying companies billions of taxpayers’ dollars to stop clean-energy projects. In markets worldwide, the future is now and America is forfeiting the game to China.

In this contest, Trump is letting Xi drive the chariot. Unfortunately, average Americans are the ones being dragged through the dust as China rides into the 21st century.

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United States China Tech Rivalry Delays Nvidia AI Chip Exports

The latest developments surrounding Nvidia’s H200 chip sales to China highlight the growing complexity of the technological rivalry between the United States and China. Although Washington has reportedly approved several major Chinese firms to purchase Nvidia’s advanced artificial intelligence chips, no deliveries have taken place so far.

The situation reflects how geopolitical competition is increasingly disrupting even officially approved commercial agreements in the semiconductor sector.

Nvidia, the world’s leading artificial intelligence chip manufacturer, now finds itself caught between United States export control policies and China’s push for technological self reliance.

What Is the H200 Chip?

The H200 is Nvidia’s second most powerful artificial intelligence chip and is designed for advanced AI model training and data center operations.

The chip is particularly valuable for companies developing large language models, cloud computing systems, and next generation AI applications.

Before export restrictions tightened, Nvidia dominated China’s advanced AI chip market with an estimated market share of around 95 percent.

China also represented a major source of revenue for Nvidia, making access to the Chinese market strategically important for the company’s long term growth.

Which Chinese Companies Were Approved?

According to reports, the United States Commerce Department approved around ten Chinese firms to purchase H200 chips.

These reportedly include major Chinese technology companies such as:

  • Alibaba
  • Tencent
  • ByteDance
  • JD.com

Several distributors were also reportedly approved, including:

Under the licensing terms, each approved customer could reportedly purchase up to 75,000 chips.

However, despite these approvals, no actual sales or deliveries have yet been completed.

Why Have the Sales Stalled?

The delays appear to stem from concerns on both the United States and Chinese sides.

Chinese Concerns

Chinese authorities reportedly fear that reliance on Nvidia chips could undermine Beijing’s efforts to strengthen its domestic semiconductor industry.

China has invested heavily in local AI chip development, particularly through companies such as Huawei.

Beijing increasingly sees semiconductor self sufficiency as a national security priority amid escalating technological competition with Washington.

There are also concerns within China regarding supply chain security and possible vulnerabilities linked to imported American technology.

Recent Chinese regulations aimed at reducing foreign dependence in critical technology sectors have reportedly intensified scrutiny of these chip purchases.

United States Restrictions

The United States has simultaneously imposed strict export control requirements on advanced semiconductor sales to China.

Chinese buyers must reportedly prove that the chips will not be used for military purposes and that adequate security procedures are in place.

Nvidia must also satisfy inventory and compliance conditions under American export laws.

Additionally, reports suggest the Trump administration negotiated an unusual arrangement in which the United States would receive a portion of revenue generated from the chip sales. This reportedly requires the chips to pass through American territory before shipment to China.

Such conditions have further complicated the transaction process.

Jensen Huang’s Diplomatic Push

Nvidia Chief Executive Officer Jensen Huang has emerged as a key figure in efforts to preserve Nvidia’s access to the Chinese market.

Huang reportedly joined President Donald Trump during a diplomatic visit linked to talks with Chinese President Xi Jinping.

His participation underscores the economic significance of the semiconductor dispute and the importance of China to Nvidia’s business strategy.

Huang has repeatedly warned that export controls risk permanently weakening Nvidia’s position in China while encouraging Chinese firms to accelerate domestic alternatives.

The Larger Strategic Battle

The Nvidia dispute reflects a broader struggle between the United States and China over technological dominance in artificial intelligence.

Washington increasingly views advanced semiconductor technology as a strategic national security asset. American policymakers fear that unrestricted access to advanced AI chips could strengthen China’s military and technological capabilities.

China, meanwhile, sees semiconductor independence as essential to reducing vulnerability to foreign pressure and sanctions.

As a result, both sides are attempting to balance economic interests with long term strategic competition.

Implications for the Global AI Industry

The uncertainty surrounding Nvidia’s China business could have major implications for the global artificial intelligence industry.

If Chinese companies lose access to Nvidia chips, they may accelerate investment in domestic alternatives, potentially reshaping the global semiconductor market over time.

At the same time, restrictions on AI chip trade risk fragmenting the global technology ecosystem into competing American and Chinese spheres.

This could reduce international collaboration, disrupt supply chains, and intensify geopolitical competition over emerging technologies.

Future Outlook

Despite current delays, neither the United States nor China appears willing to completely sever technological and commercial ties.

However, the Nvidia case demonstrates that semiconductor trade between the two powers is becoming increasingly politicized and strategically sensitive.

The future of AI competition may ultimately depend not only on innovation, but also on which country can build the most resilient and independent technology ecosystem.

For Nvidia, maintaining its position between the world’s two largest economies will likely remain one of its greatest strategic challenges.

Conclusion

The stalled Nvidia H200 deal illustrates how deeply geopolitical tensions now shape the global technology industry.

Although the United States has approved limited chip exports to China, political distrust, national security concerns, and strategic competition continue to obstruct implementation.

As artificial intelligence becomes central to economic and military power, semiconductor trade is no longer simply a commercial issue. It has become a defining arena in the broader contest between Washington and Beijing for technological leadership in the twenty first century.

With information from Reuters,

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Trump marvels at Chinese power as summit kicks off

An extraordinary display of power and precision along Tiananmen Square greeted President Trump in Beijing on Thursday, kicking off a two-day summit with particularly high stakes for the Americans.

Trump’s meetings with his Chinese counterpart, Xi Jinping, began at the Great Hall of the People moments after a welcome ceremony that seemed to impress the president, featuring a Chinese military honor guard and a greeting from excited school children. American flags waved as “The Star Spangled Banner” rang out on a smoggy day in the heart of the capital.

Children holding Chinese and U.S. flags rehearse before the welcome ceremony for President Trump.

Children holding Chinese and U.S. flags rehearse before the welcome ceremony for President Trump.

(Maxim Shemetov / Associated Press)

Trump reflected on the stakes of his visit at the top of the meeting, telling Xi that the ceremony was an honor “like few I’ve seen before.”

“There are those who say it may be the biggest summit ever,” he said. “I have such respect for China, the job you’ve done.”

Both men struck a conciliatory tone, despite the agenda for the summit featuring some of the thorniest issues facing the two superpowers today, from the U.S. war in Iran to trade relations and the future of Taiwan.

“We’ve gotten along — when there have been difficulties, we’ve worked it out,” Trump added. “We’re going to have a fantastic future together.”

Trump is expected to ask Xi for help reopening the Strait of Hormuz, a vital commercial waterway disrupted by Iran since the start of the war, and for the extension of a truce in the trade war he started at the beginning of his second term.

China, in turn, will ask the Trump administration not to proceed with arms sales to Taiwan, despite their approval by Congress, and for a declaration of opposition to Taiwanese independence. Beijing also seeks access to top-end chips made by American manufacturers.

Chinese President Xi Jinping and President Trump shake hands at the Great Hall of the People.

Chinese President Xi Jinping and President Trump shake hands at the Great Hall of the People.

(Kenny Holston / Associated Press)

The agenda exposes the mutual dependence of the two rival superpowers, marked by distrust but driven by a quest for cooperation and stability.

The welcome ceremony outside of the Great Hall kicked off with Xi shaking the hands of Trump’s delegation, including figures such as his political advisor, James Blair, his communications director, Steven Cheung, and his daughter-in-law, Lara Trump.

They were just a few members of a U.S. delegation accompanying Trump filled with curiosities.

Chinese officials were surprised to learn that Pete Hegseth was joining Trump in Beijing this week, marking the first time a president has brought his secretary of defense on an official state visit. It wasn’t immediately clear to the Chinese what his inclusion was meant to convey.

Eric Trump, the president’s son, is here, seeking to leverage the family name for lucrative business deals as Beijing aggressively campaigns against government corruption at home. And First Lady Melania Trump decided to stay at home, an unusual snub of such a high-level event.

A contingent of U.S. business leaders was given little notice to prepare for the trip, including the CEO of Nvidia, who raced to join Trump aboard Air Force One at a refueling stop in Alaksa.

The diplomatic faux pas follow weeks of Chinese frustration over what they see as the Trump administration’s lack of preparation — a perceived display of incompetence that boosts their confidence heading into the negotiations.

Over the course of the visit, Trump is expected to visit the Temple of Heaven, a monument to imperial China and Confucian thought in the center of Beijing. Ahead of Trump’s arrival, an area roughly the size of 400 American football fields was closed in preparation for a stop here.

On Thursday night, local time, Trump will return to the Great Hall of the People for a banquet dinner. Additional meetings are scheduled for Friday morning before Trump departs midday for home.

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Trump, Xi and Cold War 2.0: Managing Rivalry in a Fragmented World

The world today is no longer witnessing isolated geopolitical crises. From Ukraine and West Asia to Taiwan and the Indo-Pacific, almost every major flashpoint bears the imprint of an expanding strategic contest between the United States and China. The emerging order increasingly resembles a “Cold War 2.0” — though very different in structure, methods and consequences from the US-Soviet rivalry of the 20th century.

Unlike the earlier Cold War1.0, the present contest is not defined by ideological blocs alone. The US and China remain deeply intertwined economically, technologically and financially even as they posture against each other militarily, diplomatically and strategically. It is therefore a paradoxical competition: adversarial coexistence under conditions of mutual dependence.

The forthcoming summit between US President Donald Trump and Chinese President Xi Jinping in Beijing assumes significance far beyond bilateral optics. It is not merely about tariffs or trade balances. It is about whether the world’s two largest powers can manage competition without pushing the international system into prolonged instability.

Cold War 2.0: Similarities and Differences

There are unmistakable similarities between the old Cold War and the current strategic rivalry. Technology races, military posturing, proxy theatres, sanctions, espionage, supply-chain wars and ideological narratives are again shaping global politics. Taiwan today resembles what Berlin once symbolised during the original Cold War — a potential trigger point with global implications.

Yet the differences are even more important.

The US and Soviet Union operated largely in separate economic ecosystems. In contrast, America and China remain deeply integrated through trade, manufacturing, investment flows and technological supply chains. As a result, Cold War 2.0 is less about total decoupling and more about selective disengagement, strategic denial, and competitive coexistence. China’s rise has also changed the nature of power transition; unlike the Soviet Union, China is economically embedded within the global capitalist system while simultaneously challenging Western strategic dominance. Beijing does not seek immediate overthrow of the international order; rather, it seeks gradual restructuring of global institutions and norms to reflect Chinese power and preferences.

Because of this interdependence, direct conflict is expensive for both parties. As a result, selective disengagement, strategic denial, and competitive coexistence are more important in Cold War 2.0 than total decoupling.

The nature of power transitions has also changed as a result of China’s growth. China, in contrast to the Soviet Union, both challenges Western geopolitical dominance and is economically integrated into the global capitalist system. Beijing aims to gradually restructure international institutions and norms to reflect Chinese strength and preferences rather than topple the current international order.

Trump’s Return: Strategic Pressure with Transactional Flexibility

President Trump’s return has introduced a more personalised and transactional dimension to US-China relations. His approach combines aggressive economic nationalism with pragmatic deal-making. Trump views geopolitics substantially through the prism of economic leverage, tariffs, industrial revival and negotiated advantage.

During his earlier tenure, Trump launched the trade war against China, challenged Chinese technological expansion and questioned assumptions of unlimited globalisation. In his second term his tariff rhetoric and coercive stance seems tampering down by Beijing’s stiff retaliation and domestic vows through courts; hence appears focused on “managed competition” rather than ideological confrontation.

Current indications suggest that Trump seeks three broad objectives from Beijing:

  • Reduction of trade imbalances and greater market access for American companies.
  • Chinese restraint regarding Iran, fentanyl precursors and strategic technology transfers.
  • Taiwan and Indo-Pacific tensions should be relatively stable to prevent unchecked escalation. At the same time, Trump appears willing to negotiate tactical understandings with Beijing if they produce visible economic or political gains domestically.

This reflects an important distinction between traditional American strategic establishments and Trump’s worldview. Washington’s institutional security establishment and deep state often sees China as a long-term systemic challenger. Trump, however, also sees Beijing through the lens of bargaining opportunity. This creates unpredictability both for allies and adversaries.

Xi Jinping’s China: Strategic Patience and Controlled Assertiveness

If Trump represents transactional nationalism, Xi Jinping represents centralised strategic continuity with greater diplomatic maturity.

Beijing’s military modernisation, naval expansion, technological aspirations, and Belt and Road outreach reflect a long-term strategy aimed at reducing dependence on the West while enhancing China’s centrality in global affairs. Under Xi’s leadership, China has evolved from a cautious economic power into an increasingly assertive geopolitical actor. Beijing’s long-term objective to lessen reliance on the West and increase China’s influence in world affairs is reflected in its military modernisation, navy expansion, technological aspirations, and Belt and Road outreach.

Xi’s leadership style is marked by centralised authority, ideological discipline and strategic patience. Unlike the short electoral cycles of Western democracies, China’s leadership can pursue long-duration geopolitical objectives with consistency.

Beijing today appears more confident than during Trump’s first presidency. Despite economic headwinds, demographic pressures and property-sector challenges, China has strengthened domestic technological capabilities and diversified export networks.

China’s approach to global dominance differs fundamentally from America’s traditional model.

The United States historically exercised leadership through alliances, military presence, financial systems and institutional influence. Its dominance relied substantially on coalition-building and normative legitimacy, an approach, which seems to be eroding under President Trump, America First/America only agenda.

China’s model is more infrastructure-centric, economically transactional and state-driven. Beijing prefers influence through trade dependency, technology ecosystems, strategic investments and manufacturing centrality. It avoids formal alliances but expands leverage through economic penetration and calibrated coercion.

In essence, Washington exports political influence backed by military power to dislodge all potential competitors; Beijing exports economic dependency backed by state capacity aims at not dislodging potential markets to include U.S., EU and India.

The Taiwan Factor and Indo-Pacific Competition

No issue captures Cold War 2.0 more sharply than Taiwan.

For China, Taiwan remains a core sovereignty issue tied to national rejuvenation. For the United States, Taiwan represents strategic credibility, Island chain dominance in the Indo-Pacific and the larger balance of power against China.

Neither side currently appears to seek direct military confrontation. Yet both are steadily preparing for prolonged strategic competition around Taiwan. China continues military signalling and grey-zone pressure, while the US strengthens Indo-Pacific partnerships and defence arrangements.

Trump’s Beijing visit is therefore expected to prioritise “stability management” rather than dispute resolution. Beijing seeks assurances against perceived American encouragement of Taiwanese independence and military capacity building, while Washington seeks deterrence against coercive reunification efforts.

With recent claims of President Trump on Greenland, Canada, and Panama and actions in Venezuela, he doesn’t have any moral leverage to lecture China on Taiwan, because his security concerns over these areas are woefully short of Chinese security concerns of Island chains. Thus the reality of Cold War 2.0 is more of escalation management more than genuine reconciliation, as competition remains.

The Real Issue: Supply Chains and Technology Agendas

Artificial intelligence, semiconductors, rare earths, cyber systems, quantum technologies and critical supply chains have become strategic weapons. Economic security is increasingly inseparable from national security.

America still leads in advanced innovation ecosystems, financial influence and military alliances. China dominates large parts of manufacturing, industrial supply chains and infrastructure scalability.

The contest is therefore asymmetric. Washington seeks to slow China’s technological ascent through export controls and alliance-based restrictions. Beijing seeks self-reliance through indigenous innovation and strategic diversification.

Simultaneously, both nations are competing to shape global narratives.

The US projects democratic resilience and rules-based order. China projects efficiency, development delivery and non-interference. Many countries in the Global South increasingly engage both sides pragmatically rather than ideologically.

US-Israel War on Iran: Uneasy Calm Amid Strategic Contestation

China and the United States both need  regional stability in Middle East to avoid economic shockwaves and disruption of global energy flows, but their strategic intentions are quite apart. Trump led America’s action plan, duly influenced by Israeli lobby includes military action, coercive deterrence, and the retaining American strategic dominance in West Asia, especially Petro-dollar domination. China, on the other hand, is attempting calibrated balance, openly supporting de-escalation while covertly defending its long-term geopolitical, economic, and energy links with Tehran.

Beijing will refrain from any overt alignment that could lead to direct conflict with Washington, but it is unlikely to desert Iran. China seems confident that it can endure supply chain crisis in Strait of Hormuz longer than Trump and Iran. In any case a over-engaged US with depleted reserves works towards Chinese strategic advantage.

The larger strategic picture shows for Beijing, the crisis offers an opportunity to project itself as a responsible stabilising power while gradually expanding influence through economic leverage and diplomatic positioning; as a result, the likely outcome is not cooperation in the classical sense, but competitive crisis management—limited convergence to avoid uncontrolled escalation, while China advances through strategic patience, economic penetration, and calibrated diplomacy. Demonstrating credibility and deterrence to adversaries, such as China, is another goal for Washington in the Iran theatre.

Thus, Iran becomes yet another arena in which China gains through strategic patience, economic penetration, and calibrated diplomacy, while the US primarily depends on military power and a weakening alliance structures.

Likely Outcomes of the Trump–Xi Engagement: Competitive Coexistence, Not Resolution

Expectations from the Trump–Xi engagement must remain realistic and free from rhetorical overstatement. The structural contradictions driving US–China rivalry — Taiwan, technological dominance, supply chain control, military competition, sanctions regimes and competing visions of global order — are too deep to be resolved through summit diplomacy alone. At best, both sides may seek temporary stabilisation of tensions to avoid simultaneous economic disruption and strategic overstretch. Therefore, the likely outcome is not reconciliation, but managed confrontation under conditions of deep interdependence.

Trump’s pressure tactics may slow certain aspects of China’s technological rise and compel tactical adjustments, but they are unlikely to reverse Beijing’s long-term strategic trajectory or ambition for greater influence in global governance structures.

Equally, China is not positioned to replace the United States as a singular global hegemon, as yet. Internal economic pressures, demographic decline, debt vulnerabilities, trust deficits and the absence of robust alliance structures remain important constraints on Chinese power projection.

Consequently, the more plausible scenario is a prolonged strategic contest marked by partial economic bifurcation in critical technologies, competing digital and AI ecosystems, intensified military signalling in the Indo-Pacific, and expanded geopolitical competition across the Global South through infrastructure financing, trade dependency, arms transfers and narrative warfare.

Emerging World Order: What should remaining World Do?

Cold War 2.0 will not produce a neat bipolar world nor purely multipolar. Unlike the 20th century, today’s international system is multipolar, economically interconnected and technologically diffused. Middle powers such as India, regional blocs and strategic swing states will play increasingly important roles in shaping outcomes through strategic balancing avoiding bloc politics. The aim remains to avoid collateral damage in a competition, which neither U.S. nor China can decisively win in the foreseeable future.

The prudent course lies in strategic autonomy backed by economic resilience, technological self-reliance, diversified partnerships and flexible diplomacy. Nations will increasingly pursue sector-specific alignments while resisting pressure to become instruments of either camp’s maximalist strategic narratives.

In this evolving landscape, Trump’s coercive unilateralism and “America First” orientation may paradoxically accelerate the very multipolarity Washington seeks to resist. Many nations, including close American partners, increasingly seek strategic hedging against unpredictability in US policy, even while remaining cautious of China’s expanding influence and coercive economic practices

Cold War 2.0 is unlikely to end through a dramatic collapse or military victory. It will instead remain a long geopolitical test of endurance, adaptability, economic resilience and strategic patience in an era of competitive coexistence, issue based cooperation and crisis management below the threshold of military confrontation.

Trump’s leadership may make the contest louder, sharper and more transactional, while Xi’s China may continue pursuing calibrated expansion with long-term strategic discipline. Yet the underlying structural reality remains unchanged: the US–China rivalry is here to stay, and the rest of the world must learn to navigate carefully between pressure and prudence, rhetoric and reality, competition and coexistence.

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Trump arrives in Beijing for talks with China’s Xi on Iran war, trade and U.S. arms sales to Taiwan

President Trump arrived in Beijing on Wednesday for his hotly anticipated talks with Chinese President Xi Jinping on the Iran war, trade and U.S. arms sales to Taiwan.

The meat of the summit doesn’t start until Thursday, when the leaders hold bilateral talks, visit the Temple of Heaven, where Chinese emperors once prayed for bumper crops, and take part in a formal banquet. But the Chinese offered Trump a pomp-filled welcome, literally rolling out the red carpet for him after Air Force One landed in the Chinese capital.

The president was greeted by Chinese Vice President Han Zheng; Xie Feng, China’s ambassador to Washington; Ma Zhaoxu, executive vice minister of foreign affairs; and the U.S. envoy to Beijing, David Perdue.

The welcoming ceremony included a military honor guard, a military band and some 300 Chinese youths waving Chinese and American flags and chanting, “Welcome, welcome! Warm welcome!” as Trump made his way to his waiting limousine. The youth greeters were decked out in white and robin’s egg blue outfits that matched the paint job of the iconic presidential plane.

President Trump walks with China's Vice President Han Zheng during an arrival ceremony

President Trump walks with China’s Vice President Han Zheng during an arrival ceremony Wednesday at Beijing Capital International Airport, as Eric and Lara Trump, Elon Musk, Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and U.S. Trade Representative Jamieson Greer follow.

(Mark Schiefelbein / Associated Press)

“We’re the two superpowers,” Trump told reporters as he departed the White House on Tuesday for the long flight to Beijing. “We’re the strongest nation on Earth in terms of military. China’s considered second.”

While Trump likes to project a sense of strength, the visit occurs at a delicate moment for his presidency as his popularity at home has been weighed down by the U.S. and Israel’s war with Iran and rising inflation as a consequence of that conflict. The Republican president is seeking a win by signing deals with China to buy more American soybeans, beef and aircraft, saying he’ll be talking with Xi about trade “more than anything else.”

The Trump administration hopes to begin establishing a Board of Trade with China to address differences between the countries. The board could help prevent the trade war ignited last year after Trump’s tariff hikes, an action China countered through its control of rare earth minerals. That led to a one-year truce last October.

But Trump is visiting Beijing when Iran continues to dominate his domestic agenda. The war has led to the effective closure of the Strait of Hormuz, stranding oil and natural gas tankers and causing energy prices to spike to levels that could sabotage global economic growth. The U.S. president declared that Xi didn’t need to assist in resolving the conflict, even though Iran’s Foreign Minister Abbas Araghchi was in Beijing last week.

Fellow rescuers carry the coffins of two members of the civil defense who were reportedly killed in Israeli airstrikes

Fellow rescuers carry the coffins of two members of the civil defense who were reportedly killed in Israeli airstrikes in Nabatieh the previous day, during their funeral in the southern city of Sidon on May 13, 2026. Israel hammered south Lebanon with strikes on May 12 ahead of talks between the two countries in Washington, as Beirut reported 380 people killed in Israeli attacks since an April 17 ceasefire took effect.

(Mahmoud Zayyat/AFP via Getty Images)

“We have a lot of things to discuss. I wouldn’t say Iran is one of them, to be honest with you, because we have Iran very much under control,” Trump told reporters Tuesday.

Taiwan high on the agenda

The status of Taiwan also will be a major topic as China is displeased with U.S. plans to sell weapons to the self-governing island, which the Chinese government claims as part of its own territory.

Trump told reporters on Monday that he would be discussing with Xi an $11 billion weapons package for Taiwan that the U.S. administration authorized in December but has not yet begun fulfilling. The arms package is the largest ever approved for Taiwan.

But Trump has demonstrated greater ambivalence toward Taiwan, an approach that’s raising questions about whether the U.S. leader could be open to dialing back support for the island democracy.

The Taiwanese flag at Democracy Boulevard is lowered at the Chiang Kai-shek Memorial Hall

The Taiwanese flag at Democracy Boulevard is lowered at the end of the day as the Chiang Kai-shek Memorial Hall is seen in the background in Taipei on May 13, 2026.

(I-Hwa Cheng/AFP via Getty Images)

At the same time, Taiwan — as the world’s leading chipmaker — has become essential for the development of artificial intelligence, with the U.S. importing more goods so far this year from Taiwan than China. Trump has sought to use Biden-era programs and his own deals to bring more chipmaking to America.

The Chinese Communist Party’s news outlet, People’s Daily, published a strongly worded editorial ahead of Trump’s arrival underscoring that Taiwan is “the first red line that cannot be crossed in China-U.S. relations” and is “the biggest point of risk” between the two nations.

Trump was already portraying the trip as a success before he even left White House grounds. He openly mused about Xi’s planned reciprocal visit to the U.S. later this year, lamenting that the White House ballroom under construction would not be completed in time to properly fete the Chinese leader.

“We’re going to have a great relationship for many, many decades to come,” Trump said of the U.S. and China.

Counter snipers and other security forces watch over Air Force One while refueling at Joint Base Elmendorf

Counter snipers and other security forces watch over Air Force One while refueling at Joint Base Elmendorf during a trip with US President Donald J. Trump in Anchorage, Alaska, on May 12, 2026. Donald Trump was due in Beijing on May 13, 2026 on the first visit to China by a US president in nearly a decade, as he seeks to ramp up trade despite potential friction over Taiwan and Iran.

(Brendan Smialowski/AFP via Getty Images)

Trump embarked on Air Force One for the big meeting with a coterie of aides, family members and business world titans, including Nvidia’s Jensen Huang and Tesla and SpaceX’s Elon Musk. While en route to Beijing, he posted on social media that his “first request” to Xi during the visit will be to ask the Chinese leader to bolster the presence of U.S. firms in China.

“I will be asking President Xi, a Leader of extraordinary distinction, to ‘open up’ China so that these brilliant people can work their magic, and help bring the People’s Republic to an even higher level!” Trump wrote.

Tajikistan's President Emomali Rahmon and China's President Xi Jinping attend a welcoming ceremony

Tajikistan’s President Emomali Rahmon and China’s President Xi Jinping attend a welcoming ceremony at the Great Hall of the People on Tuesday, in Beijing.

(Maxim Shemetov—Pool / Getty Images)

Despite Trump’s outward confidence, China appears to be entering the meeting from “a much stronger place,” said Scott Kennedy, a senior adviser on Chinese business and economics at the Center for Strategic and International Studies, a Washington think tank.

China would like to reduce tech restrictions on accessing computer chips and find ways to reduce tariffs, among other goals.

“But even if they don’t get much on any of those things, as long as there’s not a blow-up in the meeting and President Trump doesn’t go away and look to re-escalate, China basically comes out stronger,” Kennedy said.

U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met on Wednesday to discuss economic and trade issues at Incheon International Airport, just west of the South Korean capital of Seoul, according to the Chinese state run Xinhua News Agency.

Bystanders are kept back by police tape as they film the motorcade of President Donald Trump as he arrives

Bystanders are kept back by police tape as they film the motorcade of President Donald Trump as he arrives at the Four Seasons Hotel on Wednesday in Beijing.

(Kevin Frayer / Getty Images)

Trump wants 3-way nuclear arms deal

Trump also intends to raise the idea of the U.S., China and Russia signing a pact that would set limits on the nuclear weapons each nation keeps in its arsenal, according to a senior Trump administration official who briefed reporters ahead of the trip. The official spoke on the condition of anonymity under ground rules set by the White House.

China has previously been cool to entering such a pact. Beijing’s arsenal, according to Pentagon estimates, exceeds more than 600 operational nuclear warheads and is far from parity with the U.S. and Russia, which each are estimated to have more than 5,000 nuclear warheads.

The last nuclear arms pact, known as the New START treaty, between Russia and the United States expired in February, removing any caps on the two largest atomic arsenals for the first time in more than a half-century. As the treaty was set to expire, Trump rejected a call by Russia to extend the two-country deal for another year and called for “a new, improved, and modernized” deal that includes China.

The Pentagon estimates China will have more than 1,000 operational nuclear warheads by 2030.

Madhani, Weissert and Boak write for the Associated Press. Boak reported from Washington. AP writers Darlene Superville in Washington, Huizhong Wu in Bangkok, Hyung-jin Kim in Seoul, South Korea, and Kanis Leung in Hong Kong contributed to this report.

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Trump needs Xi much more than Xi needs Trump | Xi Jinping

In the past few months, the geopolitical chessboard has tilted dramatically, setting the stage for a highly anticipated yet asymmetrical summit between Donald Trump and Xi Jinping, now officially confirmed for May 13-15 following statements from both the White House and China’s Foreign Ministry. Washington has repeatedly signalled the importance it attaches to the meeting, while Beijing has approached it in its characteristically measured fashion, framing the summit less as a breakthrough than as part of the broader need for “communication” and “strategic guidance” between major powers.

This subtle diplomatic choreography speaks volumes about the shifting global balance of power. For the first time in decades, it is the United States that finds itself in a position of profound vulnerability, increasingly dependent on China’s cooperation to extricate itself from a self-inflicted disaster.

The source of this American predicament is the failure of its recent military adventurism in the Middle East. Having launched an illegal, unprovoked war against Iran alongside Israel, the US military has found itself trapped in a costly and protracted deadlock. In retaliation, Tehran has effectively choked off the Strait of Hormuz, with over a dozen US warships now enforcing a blockade that has rerouted dozens of vessels, sending shockwaves through global energy markets and raising fears of a worldwide economic meltdown. Washington now finds itself scrambling for an exit.

In a striking reversal of their usual hawkish rhetoric, top US officials — including Secretary of State Marco Rubio and Treasury Secretary Scott Bessent—have been making increasingly desperate public appeals for China to intervene. They are urging Beijing to use its considerable influence to convince Iran to reopen the vital waterway.

What makes this dynamic particularly striking is the contradiction at the heart of US policy. Even as Trump and Rubio appeal for China’s help on the Hormuz crisis, the broader US posture remains confrontational, with ongoing disputes over technology restrictions and other issues continuing to shadow the relationship. The contradiction exposes an administration increasingly driven by desperation.

Washington’s narrative conveniently frames China as the party most desperate for a resolution, citing Beijing’s heavy reliance on Middle Eastern energy imports. However, this assessment drastically miscalculates China’s strategic preparedness. Far from being paralysed by the disruption, Beijing has already demonstrated remarkable resilience. Through meticulous stockpiling, diversified supply chains, and robust domestic production, China has coped with the closure exceptionally well, avoiding the kind of immediate economic shock Washington appeared to expect.

Consequently, Beijing views the Hormuz standoff as a pivotal stress test it has already passed. Knowing the stakes, China is in no rush to bail out a belligerent Washington. Recent diplomatic engagements have made this increasingly clear. China has maintained close communication with Iran throughout the crisis, with Foreign Minister Wang Yi hosting his Iranian counterpart for talks on the situation. Rather than simply pressuring Iran to reopen Hormuz, Beijing is positioning itself to demand a comprehensive “grand bargain.” Why settle for a minor concession when you can force the US to cease its hostilities against Iran, lift its crippling sanctions, and accept a new multipolar security architecture in the Middle East?

Iran has submitted a response to a US proposal to end the war, focused on ceasing hostilities and addressing Strait security, which Trump promptly rejected as “completely unacceptable,” highlighting the continued deadlock Washington hopes Beijing can break.

China did not start this fire, but it is now the indispensable power capable of extinguishing it, and strictly on its own terms. Beyond the immediate crisis, Beijing’s ultimate strategic focus remains unwavering: the core issue of Taiwan. This broader assertiveness will undoubtedly carry over into the Trump-Xi summit. While Trump is desperate for tangible deliverables and a successful photo-op to distract from domestic turmoil, Xi can afford to play the long game.

Unlike previous administrations that settled for vague diplomatic pleasantries, Beijing is expected to intensify the pressure significantly. China will likely demand that the US explicitly oppose Taiwan independence, moving decisively beyond the current, tepid commitment to merely “not support” secessionist forces.

Recognising Trump’s eagerness for a win, the US president may attempt to use Taiwan as a bargaining chip. He could offer concessions on the issue in exchange for Chinese cooperation on reopening the Strait of Hormuz, massive purchases of American agricultural and energy products, or even help brokering peace in other conflicts.

However, Beijing is far too disciplined to fall for such short-term traps. Taiwan is a non-negotiable core interest, and any temporary trade-off would be strategically foolish.

While Trump may lavish praise on his personal relationship with Xi Jinping and project an image of amicable deal-making, Beijing harbours no illusions about the man across the table. China’s leadership understands that Trump cannot be trusted; any agreement reached today could be discarded tomorrow based on his whims or domestic political calculations. Even as Beijing entertains the prospect of a “grand bargain” and maintains a cordial facade, it refuses to structurally rely on Trump’s commitments.

By stabilising its bilateral relationship with the US over the coming months — especially with several high-level meetings scheduled between the two leaders throughout the year — China aims to secure a predictable external environment conducive to its long-term rise.

For Beijing, however, the stakes extend far beyond Taiwan alone. A key priority for China will also be securing firm guarantees regarding the trajectory of Japan’s remilitarisation. As Tokyo rapidly expands its military capabilities and grows increasingly vocal about its willingness to intervene in a Taiwan contingency, China will demand that Washington strictly curtail its ally’s ambitions.

On a broader geopolitical scale, Beijing is positioning itself as a responsible and stabilising great power, repeatedly calling on the international community to de-escalate the Hormuz crisis and prevent wider economic disruption. In doing so, China is drawing a stark contrast with a United States that is openly launching illegal wars, engaging in what critics describe as state terrorism, including the extrajudicial kidnapping and killing of foreign leaders and their family members.

Ultimately, the coming days are critical not only for the future of US-China relations, but for the resolution of the US-Israel war on Iran and the broader structure of the international order. The era of US unilateralism is gasping for air in the Gulf. Armed with strategic patience and increasingly strong leverage over the crisis, China enters the Trump-Xi summit in a commanding position.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.

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China Warns US Over Taiwan Arms Sales Ahead of Trump Xi Summit

China renewed its strong opposition to U.S. arms sales to Taiwan ahead of the high profile summit between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing.

Taiwan is expected to be one of the most sensitive issues discussed during the two day meeting, alongside trade disputes, regional security, and the ongoing Iran conflict.

Beijing considers Taiwan part of its territory, while the United States maintains unofficial relations with Taipei and remains legally committed to helping the island defend itself.

China Repeats Opposition to Arms Sales

China’s Taiwan Affairs Office warned Washington against expanding military cooperation with Taiwan and criticized U.S. weapons sales to the island.

Spokesperson Zhang Han described Taiwan as a core Chinese national interest and called on the United States to honor previous commitments under the One China framework.

Beijing argues that Taiwan is an internal Chinese matter and strongly opposes any foreign military involvement with the island.

Record US Weapons Package Raises Tensions

The Trump administration approved an $11 billion weapons package for Taiwan in December, marking the largest U.S. arms sale to the island to date.

Reports have also suggested that another arms package worth around $14 billion could be approved after Trump’s visit to China, though its current status remains unclear.

The United States says such sales are necessary to ensure Taiwan can defend itself against possible military pressure from China.

Taiwan Defence Budget Faces Scrutiny

The issue gained further attention after Taiwan’s opposition controlled parliament approved only part of a proposed $40 billion defense budget requested by President Lai Ching-te.

The approved funding prioritizes purchases of U.S. weapons while reducing spending on some domestic defense programs, including drones.

American officials reportedly expressed disappointment that the budget fell short of what Washington believes Taiwan needs for adequate defense preparedness.

Taiwanese officials fear Beijing could use the reduced spending as leverage during talks with Trump to argue against further U.S. military support for the island.

Taiwan Rejects Beijing Sovereignty Claims

Speaking at the Copenhagen Democracy Summit, Lai described Taiwan as a sovereign and independent nation that would not yield to external pressure.

China quickly rejected those remarks, reiterating that Taiwan has never been and will never become an independent country.

Beijing also repeated warnings that it retains the option of using force to bring Taiwan under its control, although it continues to publicly favor peaceful reunification.

Taiwan’s ruling Democratic Progressive Party responded by emphasizing the island’s democratic system, independent government, and military institutions.

Taiwan Remains Central to US China Rivalry

Taiwan has become one of the most dangerous flashpoints in U.S. China relations, with both powers viewing the issue as tied directly to national credibility and regional influence.

For China, Taiwan represents sovereignty, territorial integrity, and national unity. For the United States, support for Taiwan is linked to maintaining regional stability and reassuring allies in the Indo Pacific.

Analysts warn that increasing military activity, arms sales, and political tensions surrounding Taiwan continue to raise the risk of miscalculation between Washington and Beijing.

Analysis

China’s warning ahead of the Trump Xi summit highlights how deeply the Taiwan issue shapes the broader strategic rivalry between the United States and China.

Despite ongoing diplomatic engagement and trade negotiations, Taiwan remains the most sensitive and potentially explosive issue in the bilateral relationship. Both sides see compromise on Taiwan as politically risky and strategically costly.

The large U.S. arms packages demonstrate Washington’s determination to strengthen Taiwan’s defense capabilities, especially as China rapidly expands its military presence around the island.

At the same time, Taiwan’s internal political debates over defense spending reveal concerns within the island about balancing military preparedness with economic and domestic priorities.

For Beijing, any increase in U.S. military support for Taiwan is viewed as interference in China’s internal affairs and a challenge to its sovereignty claims.

The summit between Trump and Xi may help reduce immediate tensions, but the fundamental disagreement over Taiwan is unlikely to ease. As military capabilities expand and political rhetoric hardens on all sides, Taiwan will remain a central test of whether the United States and China can manage strategic competition without drifting toward confrontation.

With information from Reuters.

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China’s Xi expected to press Trump on Taiwan, tariffs during summit | Donald Trump News

Taipei, Taiwan – Chinese President Xi Jinping is expected to seek concessions on Taiwan and US tariffs when he meets United States President Donald Trump for a high-stakes summit taking place in the shadow of the war on Iran.

Trump will arrive in China on Wednesday evening for a three-day visit that will mark the first trip by a US leader to the country since 2017, when Trump visited in the early days of his first term.

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Unlike Trump, who is renowned for his mercurial policymaking, Xi is widely seen as predictable in his goals for the summit, particularly as they concern Beijing’s longstanding “core interests” related to national security and territorial integrity.

At the top of that list is Taiwan.

While Taiwan’s government considers itself the head of a de facto sovereign state, Beijing views the island as an inalienable part of its territory.

The US formally cut ties with Taiwan – also known as the Republic of China – decades ago, but is committed to aiding the self-governing democracy’s defence under the 1979 Taiwan Relations Act.

Under the law, Washington has provided Taiwan with billions of dollars in arms and pursued cooperation in areas such as military training and intelligence sharing, which Beijing considers interference in its internal affairs.

The US government officially acknowledges that China views Taiwan as part of its territory, but does not express a stance on whether it agrees.

Washington is also intentionally vague about whether it would intervene to defend Taiwan if China sought to annex it by force.

In a call with US Secretary of State Marco Rubio last month, Chinese Foreign Minister Wang Yi made clear that Taiwan would be raised at the summit, describing the issue as “the biggest risk in the China-US relationship”, according to a Chinese readout of the call.

China’s embassy in Washington, DC, reiterated that message after Trump’s departure for the summit on Tuesday, naming Taiwan as the first of “four red lines” that “must not be challenged”.

While analysts say it is unlikely that the US will change its position on Taiwan due to Chinese pressure, Trump said this week that the summit’s agenda would include US arms sales to the island, raising questions about the future of a stalled multibillion-dollar arms deal.

The US Congress approved the arms package reportedly worth $14bn earlier this year, but the sale still requires Trump’s final approval.

Xi will use his meetings with Trump to “influence and potentially convince Trump to agree to scale back, if not completely suspend, sales to Taiwan,” William Yang, a Taipei-based analyst at the Crisis Group, told Al Jazeera.

If Trump were to make concessions on weapons sales to Taiwan, he would be breaking with a longstanding policy against consulting with Beijing that dates back to former US President Ronald Reagan.

Cancelling or watering down the deal would be a serious blow to Taiwanese President William Lai Ching-te, who is locked in an intense fight with the opposition over defence spending, Yang said.

“They are hoping to first influence Trump’s decision around this issue and potentially create a situation where it will be much harder for [Lai’s] government to request more special defensive spending in the future,” Yang said.

Restoring the US-China framework

Xi is also eager to smooth over US-China relations after a tumultuous 18 months that saw Trump launch a second trade war with the world’s second-largest economy, according to analysts.

The standoff saw each side roll out escalating tit-for-tat tariffs – briefly sending duties well above 100 percent – and other punitive measures, such as export controls, before Washington and Beijing hit pause in May.

During their last meeting in South Korea in October, Xi and Trump agreed to a one-year reprieve in their trade war, while keeping some trade measures in place, including certain tariffs and export controls.

Over the past month, the US has rolled out several rounds of new sanctions targeting Chinese firms, including refiners accused of buying Iranian oil and companies accused of helping Tehran obtain materials to build drones and missiles.

Earlier this month, Beijing issued a “prohibition order” directing firms to disregard the US sanctions on its oil refineries.

“Beijing wants predictability and certainty for the remainder of Trump’s term through January 2029, because Beijing needs to be able to plan its own economic policies,” Feng Chucheng, a founding partner of Beijing-based Hutong Research advisory, told Al Jazeera.

These policy considerations include understanding tariff levels the US will apply to China and its trade partners, Feng said.

Wang Wen, dean of the school for global leadership at Renmin University in Beijing, said China wishes to return to a relationship based on “peaceful coexistence, mutual respect, and win-win cooperation”.

“We hope that this meeting will bring the US policy towards China back to these three principles,” Wang told Al Jazeera.

The stakes are high for Beijing, where the view of Trump has shifted from a “predictable transactional counterpart” to a “more action-oriented and harder-to-restrain opponent,” Hung Pu-Chao, deputy executive director of the Center for Mainland China and Regional Development Research at Taiwan’s Tunghai University, told Al Jazeera.

Restoring the US-China relationship to a stable footing is one way to mitigate these risks, Hung said.

Rather than secure concessions, Hung said, China’s priority is “trying to adjust the current strategic position and negotiating pace that are unfavourable to it, and bring US-China interactions back into a framework that it can better control”.

At the summit, Xi is likely to agree to increase purchases of US agricultural exports and Boeing planes, Feng said, and could also back Trump’s plan to create a “Board of Trade” and a “Board of Investment” to oversee US-China economic ties.

But China is unlikely to make compromises on rare earths – a sector it dominates – unless the US makes major political concessions, Feng said.

Calling for dialogue on the war on Iran

The US-Israel war on Iran will loom large over the summit.

Although not a main player in the conflict, China has been hit by the economic fallout of the war and the shutdown of the Strait of Hormuz, through which one-fifth of global oil and natural gas supplies usually pass.

Beijing has called for negotiations and a comprehensive ceasefire since the start of the conflict, a message Xi is likely to reiterate in his talks with Trump, according to Jodie Wen, a postdoctoral fellow at the Center for International Security and Strategy at Tsinghua University in Beijing.

“Xi will talk about this issue with Donald Trump and say that we all know that the war has a huge impact on the world, on Asian countries and the US, so we must have dialogue,” Wen told Al Jazeera.

Trump said on Tuesday that he does not need China’s “help” resolving the war, though the White House has pressured Beijing to lean on Iran to reopen the strait.

Xi and his top diplomat, Wang, have met more than a dozen global leaders and high-level officials since the start of the war, playing a behind-the-scenes mediating role.

China has had a “comprehensive strategic partnership” with Iran since 2016, and buys more than 80 percent of its oil.

Wen, the postdoctoral fellow at Tsinghua University, said Xi is unlikely to agree to any involvement except as a mediator, which she described as consistent with China’s longstanding approach to global affairs.

“China’s foreign policy principle is non-intervention,” she said. “This is our principle.”

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Trump and Xi to meet in Beijing: The key issues shaping the China summit | Donald Trump News

United States President Donald Trump has departed for Beijing ahead of a high-stakes summit with Chinese President Xi Jinping, after weeks of unsuccessful US efforts to persuade China to help bring Iran back to negotiations and ease tensions around the Strait of Hormuz.

The leaders of the world’s two largest economies are due to meet on Thursday and Friday during Trump’s first visit to China since 2017, with talks expected to focus on trade, Taiwan, artificial intelligence and the war involving Iran.

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Here is what we know about the upcoming summit and the key issues expected to dominate the agenda.

Why does the Trump-Xi summit matter?

The Trump-Xi summit is a high-level meeting between Trump and Xi Jinping taking place in Beijing as the world’s two largest economies face growing tensions over trade, technology, Taiwan and the Iran war.

The summit is particularly significant because Trump will be the first US leader to visit China in nearly a decade, while the talks also come at a time of heightened geopolitical and economic uncertainty. Originally expected earlier this year, the meeting was delayed by the war on Iran.

Before departing for Beijing, Trump said he and Xi would have a “long talk” about Iran, although he stressed that trade would remain the central focus of the visit.

“Trade remains politically powerful, especially for Trump, because it gives rivalry a language that voters can easily understand,” said Salvador Santino Regilme, associate professor and programme chair of international relations at Leiden University. “Yet the deeper conflict concerns hierarchy, legitimacy and the future architecture of global order.”

Regilme added that both countries remain locked in a relationship shaped by strategic rivalry and deep economic dependence.

“The United States still relies heavily on China’s manufacturing capacity and low-cost production, while China depends on access to US consumers, technology, capital markets and the wider stability of the dollar-centred global economy.”

“This is the paradox of US-China rivalry: each side wants greater autonomy, yet both remain tied to a structure of mutual dependence that neither can easily dismantle without hurting itself,” Regilme added.

What are the biggest issues at the Trump-Xi summit?

Analysts say the US and China are entering the summit with different priorities.

Trump is expected to focus heavily on trade with the aim of securing what he can present as economic wins ahead of November’s midterm elections. Washington has pushed for China to increase purchases of American goods, including Boeing aircraft, beef and soya beans, while also seeking closer investment and trade cooperation.

Beijing, meanwhile, is expected to press the US to ease restrictions on advanced semiconductor exports and roll back measures limiting China’s access to critical chip-making technology. Taiwan is also likely to remain one of the most sensitive and contested issues in the summit.

Trump has also said he plans to raise the case of Jimmy Lai, the jailed Hong Kong media tycoon and pro-democracy figure sentenced earlier this year under Beijing’s national security law.

Beyond bilateral disputes, the two leaders are also expected to discuss the war on Iran, tensions around the Strait of Hormuz and the growing risks linked to artificial intelligence.

The biggest flashpoints include:

Tech vs rare earths

Technology and supply chains are expected to be among the key issues at the summit, as Washington and Beijing remain locked in a widening battle over semiconductors and critical minerals.

The US has tightened restrictions on advanced chips and chip-making equipment going to China, saying the measures are needed to slow Beijing’s military and AI development.

China, meanwhile, controls roughly 90 percent of global rare earth refining, materials essential for semiconductors, electric vehicles, military equipment and electronics, and has responded with tighter export controls on several critical minerals.

Beijing is expected to push for fewer US technology restrictions, while Washington wants China to resume shipments of rare earths and critical minerals after export controls disrupted parts of the American automotive and aerospace sectors.

 Iran war and the Strait of Hormuz

The Iran war is expected to be one of the most closely watched issues at the summit.

Analysts expect Washington to press Beijing to use its influence over Tehran, particularly because China remains the largest buyer of Iranian oil — by far — purchasing more than 80 percent of Iran’s shipped crude exports. US officials have also urged China to support efforts to reopen and secure the Strait of Hormuz, a vital route for global energy supplies.

The conflict has also increased pressure on China’s economy and energy security. About half of China’s crude oil imports come from the Middle East, while disruptions in the Gulf have left commercial shipping vulnerable to attacks and delays.

“I have no doubt that Trump is going to at least try to enlist Xi Jinping to assert some pressure for the Iranians to come back to the table and agree to a settlement,” said Dan Grazier, a senior fellow and director of the National Security Reform programme at the Stimson Center.

Experts say Iran may be one of the few areas where US and Chinese interests overlap, as both countries benefit from stable energy flows through the Gulf.

“Both sides would like to see the strait opened,” said Gregory Poling, director and senior fellow at the Center for Strategic and International Studies (CSIS), but he noted Beijing is unlikely to align itself too closely with Washington’s approach towards Tehran.

While China wants shipping through the Strait of Hormuz restored, Poling argued the diplomatic and strategic pressure created by the disruption is falling far more heavily on Washington.

“It is not China being humiliated in the strait … It’s the US.”

INTERACTIVE - IRGC releases map of control over Strait of Hormuz - May 5, 2026-1777975253

Taiwan: An existential problem

Taiwan is expected to be one of the most sensitive issues, with Beijing repeatedly warning that it remains the biggest source of tension in US-China relations.

China claims the self-ruled island as part of its territory and has increased military pressure on Taiwan in recent years through regular air and naval operations around the island.

Tensions have risen further under Taiwanese President William Lai Ching-te, whom Beijing has sharply criticised because his party views Taiwan as already sovereign.

The US officially recognises the communist mainland as China but is legally committed under the Taiwan Relations Act to support Taiwan’s self-defence, a policy that has long angered China. Washington has approved tens of billions of dollars in military sales to Taiwan over the years, including an $11bn package announced last year, and Trump recently said he discussed the issue with Xi ahead of the summit.

Analysts say Taiwan will be paying close attention to what Trump and Xi say publicly after the summit, especially on defence and arms sales.

“What matters is the precise wording,” Regilme said. “Whether Trump reaffirms support for Taiwan’s defence, whether he sounds ambiguous on arms sales, and whether he gives Xi any rhetorical opening to claim that Washington is restraining Taipei.”

Regilme said Beijing is likely to push for limits on US arms sales and stronger political restrictions on Taiwan, while also discouraging any movement towards formal independence. At the same time, Taipei fears it could become part of a broader geopolitical bargain between Washington and Beijing.

“In great-power politics, small words often carry large consequences, especially for those whose survival depends on the credibility of others,” Regilme added.

Tariffs

Trade is also expected to be a sticking point after years of friction between the US and China over tariffs and economic competition.

The latest trade dispute intensified last year when Trump imposed new tariffs on Chinese goods. China responded with its own tariffs.

At the height of the dispute, tariffs on some goods climbed above 100 percent, prompting concerns about the impact on global trade and supply chains.

The two countries later agreed to temporarily lower tensions through a trade truce reached during talks in South Korea. As part of the deal, China agreed to buy more US agricultural products, including soya beans, while Washington rolled back some tariffs.

What would count as a successful outcome for Trump and Xi?

Analysts say a successful outcome for Trump would likely need to be visible and easy to sell politically at home. That could include Chinese purchases of US goods, movement on tariffs, cooperation on Iran, or progress on rare earth exports.

“Trump’s foreign policy style places enormous value on the public performance of dealmaking, so the optics of success may matter almost as much as the substance,” Regilme said.

For Xi, success would mean preserving stability without appearing to bow to Washington, while securing greater economic predictability and recognition of China as a global power.

“A comprehensive trade deal seems unlikely because the structural sources of rivalry remain unresolved,” Regilme added.

Instead, he said a limited agreement is more likely, potentially involving tariff pauses, purchase commitments, rare earth arrangements or a framework for future negotiations.

“Such an agreement would manage the rivalry temporarily, while leaving untouched the deeper problem: the two economies remain mutually dependent, but their governments increasingly treat that dependency as a strategic danger.”

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In war with Iran, China sees a familiar pattern of U.S. mistakes

The Trump administration has repeatedly framed the war in Iran as a quick, winnable fight, vowing to defeat the Islamic Republic “totally and decisively” — incomparable to the “dumb” wars in Iraq and Afghanistan.

But from China’s perspective, the parallels are clear.

“You can blow everything up — destroy it all,” one Chinese official told The Times, describing the Americans, “but you don’t have a strategy.”

President Trump arrives in Beijing this week for talks with a Chinese government that is confident as ever in its ascendance on the world stage, taking stock of its leverage and still baffled the U.S. administration chose yet another costly war in the Middle East.

China has watched as the United States, over seven weeks of fighting an outmatched enemy, has depleted nearly half of its stockpiles of high-end munitions — including its THAAD and Patriot batteries — and fired its Army chief of staff, among other Pentagon leaders, who had warned of critical shortages.

Marco Rubio, Trump’s national security advisor and secretary of State, has said the military operation that started the war known as Operation Epic Fury “is over.”

But the Strait of Hormuz, one of the world’s most vital commercial waterways, remains effectively shuttered. Iranian attacks in the region continue. And talks between Washington and Tehran have failed to reach a diplomatic agreement to bring a definitive end to the conflict.

“The Chinese have high regard for the operational proficiency of U.S. forces, but they recognize that, thus far at least, the Trump administration has not achieved its core objectives in going to war with Iran,” said David Ochmanek, a former deputy assistant secretary of Defense now with the Rand Corp.

The war has given Beijing an opportunity, Ochmanek said, “to double down on the claim they have made for the past year and a half that the [People’s Republic of China], not the U.S., is a force for global stability.”

The war has allowed China to demonstrate some diplomatic prowess. An initial ceasefire reached between the United States and Iran last month was only clinched after Beijing pressured Tehran to agree. And China’s advocacy for an open strait — rejecting Iranian attempts to impose a toll system — while opposing the U.S. war itself has allowed Beijing to maintain leverage with both sides.

It has also inflicted costs. Allies of Beijing noticed when the government did not leap to the defense of Tehran at the start of the war. And China has its own vested interest in a free and open waterway, where nearly 50% of the country’s crude oil imports pass through each day.

Building up to the start of the war and throughout its initial weeks, Washington diverted significant military assets from Asia — where Trump’s own national security strategy says they are needed most — to the Middle East.

The USS Abraham Lincoln was redirected from the South China Sea, along with scores of advanced missile interceptors from South Korea and Japan and nearly the entire U.S. inventory of long-range air-to-surface missiles in the Pacific.

Policy experts at the Pentagon were brought in to discuss a potential invasion of Kharg Island, the jewel of Iran’s oil industry, to draw lessons from planning a defense of Taiwan, according to a Defense official, who was granted anonymity to speak candidly. A Marine expeditionary unit was sent from Okinawa to the region for the potential operation.

Chinese officials and analysts have been candid in their assessments of U.S. hard power, impressed by a military they acknowledge remains the best in the world.

But Beijing sees a persistent flaw in U.S. strategy: the belief that military strength alone can reshape political realities, a view further weakened by the pressures on a democratic government whose public grows impatient with wars that drag on beyond days or weeks.

China’s autocracy is free from accountability to the public — and anyway has confidence that Chinese public opinion would be on its side if it were to launch a major military operation against its main target, Taiwan.

But there are lessons of caution to be learned from the Americans, as well.

Over the last year, the Taiwanese Navy has been practicing the rapid deployment of cheap and domestically produced smart mines for the sea — a potential bulwark against enemy blockades of ports and hostile invasion forces.

It is the type of asymmetric warfare that has so far frustrated the U.S. military in the Strait of Hormuz, protracting a war that Trump vowed would last a month or less.

Taiwan, too, would confront Beijing with political realities that military force cannot erase. Nearly 90% of the Taiwanese people oppose a Chinese takeover, and about 60% say they would resist it at all costs.

“Chinese analysts see two things at once,” said Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies. “They are impressed by U.S. military reach, precision and operational capability, but they also see a familiar pattern of American power struggling to translate battlefield success into a durable political outcome.”

That matters for Taiwan, Singleton said, “because China’s own military modernization has borrowed heavily from the American model, relying heavily on joint operations, high-tech precision strikes, decapitation concepts and information dominance.

“If the world’s most experienced military can still struggle to convert military pressure into political success,” he added, “Beijing has to ask whether the [People’s Liberation Army] could do better in a far more complex Taiwan scenario.”

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Trump-Xi talks in Beijing: What’s at stake

President Trump’s first visit to China in nine years is a high-stakes trip reflecting the rivalry and mutual dependence of two superpowers hoping to avoid a collision course — even if Trump cast it more as a meeting between close friends and business partners.

Speaking to reporters before departing Washington on Tuesday, Trump downplayed tensions between the two countries, including on trade, calling Chinese President Xi Jinping a “wonderful guy” and a friend and saying the working relationship between the two countries is “very good.”

Trump acknowledged China’s might — saying that the Asian nation and the United States are clearly the world’s two superpowers — and that the focus of the meeting “more than anything else will be trade.”

“We’re gonna have a great relationship for many, many decades to come,” Trump said. “My relationship with President Xi is a fantastic one. We’ve always gotten along, and we’re doing very well with China, and working with China’s been very good — so we look forward to it.”

Trump also downplayed the importance of the meeting for the war in Iran. He said Xi might be able to help the United States reach a deal to end the war, but that he doesn’t need it, “because we have Iran very much under control.”

The state visit marks the first by an American president to China since Trump’s trip here in 2017, only months into his first term. President Biden never came, becoming the first to not do so since diplomatic ties were normalized, an absence that underscored simmering distrust and animosity between Washington and Beijing that has only worsened since.

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In the capital, security forces sealed off an area around the Temple of Heaven roughly the size of 400 football fields ahead of the U.S. president’s visit, anticipating a stop at the monument to imperial China and Confucian thought.

On his previous trip, Trump received the rare honor of a state banquet inside the Forbidden City. This time he is expected to dine at the Great Hall of the People, an imposing structure off Tiananmen Square that hosts high-level gatherings of the Chinese Communist Party.

Trump’s positive spin on Tuesday aside, his agenda for meetings beginning Thursday with Xi highlights the vast array of American interests that depend on — and often clash with — Beijing’s policies.

After launching a trade war against China at the beginning of his second term, Trump now comes hat in hand requesting an extension of a tariff truce, fearful Xi might follow through on his threats to halt the export of rare earth minerals to the United States that are vital to the manufacturing of American goods, including everyday consumer equipment and advanced defense technologies.

His visit comes as a ceasefire in the war with Iran, brokered with help from Beijing, is on “massive life support,” according to the president. Trump is expected to appeal to Xi for assistance in getting Tehran to restore free and open passage through the Strait of Hormuz.

And in a dramatic reversal, the Trump administration has begun discussions with the Chinese about establishing a channel of communication on artificial intelligence, alarmed that recent technological leaps could pose global risks.

All of these requests are expected to come at a cost.

A man in a dark suit and wind-blown gold-colored tie

President Trump departs the White House on May 12, 2026, for his second state visit to China.

(Kevin Dietsch / Getty Images)

In earlier remarks before the trip, Trump said he expected U.S. arms sale to Taiwan — including one already approved by Congress — to become a chip in the negotiations.

“I’m going to have that discussion with President Xi,” Trump said. “President Xi would like us not to, and I’ll have that discussion. That’s one of the many things I’ll be talking about.”

The notion that U.S. support for Taiwan is a negotiable matter is sure to rattle America’s allies throughout the region, from Japan to the Philippines, which are reliant on U.S. security guarantees amid China’s Indo-Pacific military aggression.

Despite geopolitical tensions, both sides are expected to announce business and investment agreements, underscoring how deeply intertwined the world’s two largest economies remain.

China plans on making a significant purchase of Boeing aircraft, and the president has brought 17 American corporate leaders with him on the trip to discuss additional opportunities, including Apple’s Tim Cook, BlackRock’s Larry Fink, Meta’s Dina Powell McCormick and Tesla’s Elon Musk.

The two leaders are expected to have other opportunities to talk in person throughout the coming year, including potential meetings at the Group of 20 summit in Florida, the APEC summit in Shenzhen, China, and a state visit in Washington that Trump said he will host for Xi at some point in the coming months.

Trump on Tuesday said Xi’s visit will be “toward the end of the year” and “exciting.” He also lamented that the ballroom he is building on the White House grounds — on the site of the historic East Wing he demolished — won’t be ready in time.

Jennifer Hong, senior director at the Institute for Indo-Pacific Security, said her concern is that the state visit becomes part of a “tyranny of calendaring,” where the Chinese agree to schedule more high-level meetings sought by Trump that put off vital U.S. decision-making.

“I do think this trip is necessary for the U.S. government — I think that there are things that are on hold because he doesn’t want to rock the boat,” Hong said, noting the Trump administration’s delay in arms sales to Taiwan, despite the packages already having received congressional approval.

“I’m just worried this will be a stringing along of promises, or maybe some reprieve for a year or so,” she added, “as we continue to handicap ourselves on national security matters for the sake of more meetings.”

Trump on Tuesday repeatedly dismissed China’s potential help in resolving the war in Iran, which has driven up prices domestically and around the world as oil shipments through the strategic Strait of Hormuz have been badly disrupted and U.S. efforts to fully reopen the channel have so far been unsuccessful.

“I don’t think we need any help with Iran, to be honest with you,” Trump said. “They’re defeated militarily.”

Trump also said the financial pain many Americans are feeling from the war, including at the gas pump, simply isn’t a factor — “not even a little bit,” he said — in his ongoing negotiations with Iran.

“The only thing that matters when I’m talking about Iran [is that] they can’t have a nuclear weapon,” he said. “I don’t think about Americans’ financial situation. I don’t think about anybody.”

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Trump downplays US-Iran differences as he heads to Beijing to meet with Xi | Xi Jinping News

Donald Trump gives conflicting messages on prominence of Iran war in upcoming talks, with his administration emphasising trade.

United States President Donald Trump has departed the White House en route to Beijing, where he will meet with his Chinese counterpart Xi Jinping.

Trump spoke briefly with reporters on Tuesday as he boarded the Marine One helicopter. He was then set to arrive in China aboard Air Force One on Wednesday, ahead of the planned meetings on Thursday and Friday.

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United States officials have taken pains in recent days to downplay how big a topic the US-Israel war on Iran will be during Trump’s visit.

Beijing has made its opposition to the war clear, at times asserting behind-the-scenes pressure on its trading partner Iran. However, it has largely avoided being pulled into the fray.

In recent days, US Secretary of State Marco Rubio and Treasury Secretary Scott Bessent have stepped up their calls for China to use its influence to help reopen the Strait of Hormuz, through which about 20 percent of the world’s oil supply flowed before the war began.

But Trump again gave conflicting messages on Tuesday about how much the war would feature in his meetings in China.

“We’re going to have a long talk about it. I think he’s been relatively good, to be honest with you,” Trump said of his plans to discuss the conflict – and how it has roiled global oil markets – with Xi.

Minutes later, he added, “We have a lot of things to discuss. I wouldn’t say Iran is one of them, to be honest with you, because we have Iran very much under control.”

“I don’t think we need ⁠any help with Iran. We’ll win it one way or the other, peacefully or otherwise,” he said.

Trade to loom large

The upcoming meetings will be the first face-to-face exchanges since the leaders of the world’s two largest economies met on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Busan, South Korea, in October 2025.

It is the second time Trump will travel to China as president, and the first time since his second term began on January 20, 2025. Xi is expected to travel to the US later this year.

Beyond the war, the US administration has stressed that trade will be a top subject discussed, with Trump seeking a series of business deals and agreements.

Underscoring that initiative, Trump invited an array of US business leaders to accompany him on the trip, including Tesla CEO Elon Musk, who had previously chaired Trump’s so-called Department of Government Efficiency (DOGE), and Apple CEO Tim Cook.

Both sides are expected to seek to avoid a return to the tariff war that defined Trump’s early days in office, which saw Trump set tariffs on Chinese goods at 145 percent, while China announced a further tightening of rare-earth export controls that would have hurt US industry.

The two sides reached a fragile truce in October of last year.

China’s continued support for Iran’s ballistic programme and its defence of Tehran’s nuclear programme has also risked again derailing relations.

Last month, Trump threatened to impose a 50 percent tariff on China after reports that Beijing was preparing to deliver a shipment of new air defence systems to Iran. He later backed away from the threat, claiming that he had received written assurance from Xi that he would not provide Tehran with weaponry.

Days later, Trump said that the US Navy had intercepted a Chinese vessel carrying a “gift” for Iran. Neither side offered further details of the incident.

Xi was also expected to push Trump on US arms sales to Taiwan, the self-governing island that China claims as its own.

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China Escalates Pressure on Paraguay Over Taiwan Relations

China has intensified its diplomatic rhetoric against Santiago Peña following his recent visit to Taiwan, reflecting Beijing’s growing efforts to isolate Taipei internationally and weaken the remaining countries that maintain formal diplomatic ties with the island.

Paraguay is one of only 12 states that officially recognize Taiwan instead of the People’s Republic of China. During his visit, Peña reaffirmed support for Taiwan and described relations with Taipei as rooted in shared democratic values and political freedom.

Beijing responded sharply, accusing Paraguayan politicians of serving as “pawns” of Taiwanese separatist forces and suggesting that leaders supporting Taiwan may have “ulterior motives.” The unusually aggressive language highlights how sensitive the Taiwan issue has become within China’s broader foreign policy strategy.

Why Paraguay Matters to China and Taiwan

Although Paraguay is not a major global power, its diplomatic recognition carries significant symbolic and strategic importance for both China and Taiwan.

For Taiwan, maintaining formal diplomatic allies is essential to preserving international legitimacy and resisting Beijing’s efforts to diplomatically isolate the island. Each country that continues to recognize Taiwan represents political resistance against China’s One China principle.

For China, reducing Taiwan’s remaining diplomatic partnerships is part of a long term strategy aimed at reinforcing Beijing’s claim that Taiwan lacks the status of an independent state. Over the past decade, several countries have switched diplomatic recognition from Taipei to Beijing after economic and political engagement with China.

Paraguay therefore represents one of Taiwan’s most important remaining diplomatic footholds in South America.

Economic Pressure Shapes the Debate

The controversy surrounding Paraguay’s Taiwan relationship is increasingly driven by economic considerations. Some Paraguayan politicians, agricultural exporters, and business groups argue that maintaining ties with Taiwan limits access to Chinese markets and investment opportunities.

China is the world’s second largest economy and a major importer of agricultural products, making diplomatic recognition economically attractive for many developing states.

Supporters of relations with Beijing argue that Paraguay could gain greater trade access, infrastructure investment, and financial opportunities if it abandoned Taiwan.

However, Peña and supporters of Taiwan emphasize ideological and political considerations, framing the relationship as a partnership based on democratic governance and political sovereignty rather than purely economic interests.

This reflects a broader global trend where smaller states increasingly face pressure to balance economic incentives against political alignment and strategic values.

China’s Diplomatic Messaging Is Becoming More Aggressive

The sharp rhetoric from China’s foreign ministry demonstrates Beijing’s increasingly confrontational diplomatic approach on issues related to Taiwan.

By describing Paraguayan leaders as “pawns” and questioning their motivations, China is signaling that support for Taiwan will be treated not merely as a diplomatic disagreement but as active opposition to Chinese national interests.

This language also serves multiple audiences simultaneously.

Internationally, Beijing seeks to discourage other governments from strengthening ties with Taiwan.

Domestically, strong rhetoric reinforces nationalist narratives surrounding territorial sovereignty and reunification.

Regionally, China is attempting to increase pressure on Paraguay by suggesting that continued support for Taiwan contradicts public opinion and economic interests.

The emphasis on opinion polls claiming support for relations with Beijing also reflects China’s strategy of portraying diplomatic recognition of Taiwan as politically unsustainable.

Taiwan’s Shrinking Diplomatic Space

The dispute illustrates Taiwan’s increasingly difficult international position as China expands its diplomatic, military, and economic influence globally.

Under President Lai Ching-te, Taiwan has continued emphasizing democracy, sovereignty, and international partnerships. However, Beijing views Lai as supporting separatist policies and has intensified political and military pressure against Taipei.

Taiwan’s formal diplomatic allies have steadily declined over recent decades as China has used economic incentives and geopolitical influence to persuade states to switch recognition.

As a result, every remaining ally now carries outsized symbolic importance for Taipei’s international visibility and diplomatic legitimacy.

Analysis

China’s reaction to Peña’s Taiwan visit demonstrates how the Taiwan issue has evolved into one of the most emotionally and strategically sensitive dimensions of Chinese foreign policy.

Beijing no longer views diplomatic recognition of Taiwan as a minor symbolic issue. Instead, it increasingly interprets international engagement with Taipei as a challenge to China’s sovereignty, territorial integrity, and geopolitical authority.

The pressure on Paraguay also reflects the broader transformation of global diplomacy under growing United States China rivalry. Smaller countries are increasingly caught between competing geopolitical and economic pressures, particularly when balancing relations with democratic partners against the economic power of China.

For Paraguay, the debate is ultimately about strategic identity as much as economics. Maintaining relations with Taiwan offers political alignment with democratic values and preserves diplomatic independence from Beijing’s influence. Switching recognition to China could deliver economic benefits but may also reduce Paraguay’s foreign policy autonomy.

For Taiwan, retaining Paraguay is important not only diplomatically but psychologically. Every diplomatic loss strengthens Beijing’s narrative that international recognition of Taiwan is disappearing and that eventual reunification is inevitable.

The dispute therefore reflects a much larger geopolitical contest over legitimacy, influence, and the future international status of Taiwan. As competition between China and Taiwan intensifies, diplomatic battles involving even relatively small states are likely to become increasingly significant within global geopolitics.

With information from Reuters.

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Arcadia mayor, accused of being Chinese foreign agent, strikes plea deal

Eileen Wang, an Arcadia city leader facing charges of acting as an illegal foreign agent of China, resigned Monday after reaching an agreement to resolve the federal case.

Wang, who served as mayor of the San Gabriel Valley suburb, entered into a plea agreement with prosecutors over charges that she acted under the control of the People’s Republic of China to promote propaganda in the U.S. between 2020 and 2022, according to court filings.

Wang, who was previously elected to the City Council in November 2022, stepped down as mayor on Monday hours after the plea agreement was unsealed. Arcadia officials and Wang’s attorneys said the conduct described by federal authorities occurred before Wang was elected.

Wang appeared in federal court in downtown Los Angeles during a brief hearing Monday, where a judge instructed her lawyers to set a date when she would formally enter a guilty plea.

The maximum sentence for the charge is 10 years in prison.

Dressed in a blue suit jacket and skirt and accompanied by four lawyers, Wang listened to the proceeding through a Mandarin interpreter. She sniffled throughout the hearing, wiping at her eyes and her nose with her hand and a tissue.

The magistrate judge ordered a $25,000 bond and for her to surrender all of her passports and travel documents. Assistant U.S. Attorney Amanda B. Elbogen asked that the judge order Wang to refrain from any communication with the Chinese government, including consular officials in the U.S.

“Individuals in our country who covertly do the bidding of foreign governments undermine our democracy,” said First Assistant U.S. Attorney Bill Essayli in a statement Monday. “This plea agreement is the latest success in our determination to defend the homeland against China’s efforts to corrupt our institutions.”

In a statement, Wang’s attorneys, Brian A. Sun and Jason Liang, said “she apologizes and is sorry for the mistakes she has made in her personal life.”

“Her love and devotion for the Arcadia community have not changed and did not waver. She asks for the community’s understanding and continued support,” her attorneys said.

The city of Arcadia’s website said Wang was “vacating her position” and the process of selecting someone to step in as mayor would begin at the next City Council meeting.

“We understand this news raises serious concerns, and we want to be direct with our community about what we know and where we stand,” City Manager Dominic Lazzaretto said in a statement. “The allegations at the center of this case, that a foreign government sought to exert influence over a local elected official, are deeply troubling. We take them seriously.”

From late 2020 through at least 2022, Wang worked with Yaoning “Mike” Sun, her former fiance, to run a website called U.S. News Center that branded itself as a news source for Chinese Americans, according to the plea agreement unsealed Monday. Both Wang and Sun “executed directives” from Chinese government officials, posting requested articles and reporting back with screenshots showing how many people viewed the stories, the agreement says.

On June 10, 2021, the agreement says, Wang received a message from a government official about “China’s Stance on the Xinjiang Issue,” which included a link to a letter to the editor in the Los Angeles Times from the consul general of the People’s Republic of China in Los Angeles. The consul general had been responding to a Times editorial supporting a boycott of products made with cotton produced in the Xinjiang region of China.

At the time, news reports were highlighting the Chinese government‘s campaign of incarceration, persecution and “reeducation” of Uyghurs in the Xinjiang province.

“There is no genocide in Xinjiang; there is no such thing as ‘forced labor’ in any production activity, including cotton production. Spreading such rumor is to defame China, destroy Xinjiang’s safety and stability,” read the message from the Chinese government official, according to the plea agreement.

Minutes after receiving the link, Wang posted the article on her website and responded to the Chinese government official with a link to the article on her website, according to the court filing.

“So fast, thank you everyone,” the government official responded, the court records show.

Prosecutors also say Wang edited articles at the request of officials and shared information showing the reach of the posts.

“Thank you leader,” she wrote on Aug. 20, 2021, after being complimented for a post that was viewed more than 15,000 times, according to the plea agreement.

Wang never disclosed that the Chinese government had directed her to post the content, according to court documents.

Wang’s attorneys stressed in their statement “that the conduct underlying the information and the agreement with the government relates solely to Ms. Wang’s personal life — i.e., a media platform that she once operated with someone whom she believed to be her fiancé — and not to her conduct as an elected public official.”

Prosecutors charged Sun, a resident of Chino Hills, in December 2024 with conspiracy and acting as an illegal agent of a foreign government. Wang said her relationship with Sun ended in the spring of 2024.

Sun had also served as campaign manager for her City Council campaign to lead Arcadia, a landing spot for many Chinese and Taiwanese immigrants. Prosecutors accused Sun and his Chinese government contacts of cultivating Wang in hopes that she would rise in politics and help them strengthen China’s influence in California.

“We broke up the fiance relationship,” Wang told the City Council after he was charged. “We keep the friendship.”

Sun was sentenced in February to four years in federal prison after pleading guilty in October 2025 to one count of acting as an illegal agent of a foreign government.

Sun worked as an illegal agent for the People’s Republic of China, submitting reports to high-level government officials about work he was doing on the government’s behalf, according to a federal sentencing memorandum. This activity included combating Falun Gong, a spiritual practice banned in China, and supporters of Taiwanese independence. Sun also was accused of monitoring the then-president of Taiwan during her April 2023 trip to the U.S.

Facing calls for her resignation on the heels of her former fiance’s indictment, Wang vowed at the time not to step away from the council, emphasizing that she was “not responsible for the action of others.”

Wang said in a 2024 interview that she moved to Southern California from China 30 years ago. Her mother was a Chinese medicine and acupuncture doctor and her father was a physician in Sichuan province before working at USC, she said.

Wang appeared as usual at last week’s city council meeting, shepherding along discussions on street paving, the upcoming budget and a potential e-bike ordinance. Lazzaretto, the city manager, said in his statement that the city has conducted an internal review related to the charges and found no wrongdoing.

“We can confirm that no City finances, staff, or decision-making processes were involved,” Lazzaretto said in a statement. “We have found no actions that require reconsideration or that are invalidated as a result of these developments.”

Clara Harter contributed to this report.

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California ex-mayor admits acting as agent of China, US authorities say | Crime News

Ex-mayor of wealthy Los Angeles suburb promoted pro-China propaganda at behest of Chinese officials, prosecutors say.

The former mayor of a wealthy suburb in the United States city of Los Angeles has admitted to acting as an illegal agent of China, according to authorities.

Eileen Wang, the former mayor of Arcadia, agreed to plead guilty to one count of acting as an illegal agent of a foreign government from late 2020 until 2022, the US Department of Justice said on Monday.

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Wang admitted that she did not notify the US government that she was acting on behalf of China while promoting pro-Beijing propaganda, the Justice Department said.

Wang, 58, operated a website, called the US News Center, that published content supportive of the People’s Republic of China (PRC) while purporting to provide news for Chinese Americans, the department said.

Wang ran the site with Yaoning Sun, a Californian man who was sentenced to four years in prison after pleading guilty to acting as an illegal agent of a foreign government in October 2025, according to US prosecutors.

Wang’s activities included republishing a “PRC official-written essay” that denied allegations that the Chinese government was committing genocide against ethnic-minority Uighurs in its far-western region of Xinjiang, according to prosecutors.

Wang resigned as mayor on Monday, according to a statement published on the City of Arcadia’s website.

She faces a maximum penalty of 10 years in prison.

Her lawyers, Brian A Sun and Jason Liang, said Wang wished to apologise for “mistakes she has made in her personal life”.

“It is important to note, however, that the conduct underlying the information and the agreement with the government relates solely to Ms. Wang’s personal life – i.e., a media platform that she once operated with someone whom she believed to be her fiancé – and not to her conduct as an elected public official,” Sun and Liang said in a statement.

“Her love and devotion for the Arcadia community have not changed and did not waver,” they added.

“She asks for the community’s understanding and continued support.”

US Assistant Attorney General for National Security John A Eisenberg issued a statement expressing deep concern over Wang’s activities.

“Individuals elected to public office in the United States should act only for the people of the United States that they represent,” he said.

“It is deeply concerning that someone who previously received and executed directives from PRC government officials is now in a position of public trust at all, but particularly so because that relationship with that foreign government had never been disclosed.”

China’s embassy in Washington, DC, did not immediately respond to a request for comment.

Wang’s prosecution comes as US President Donald Trump and Chinese President Xi Jinping are set to meet in Beijing on Wednesday for a summit expected to focus on the US-Israel war on Iran, trade, and the status of Taiwan, among other issues.

The summit comes after the two leaders agreed to a yearlong pause in their trade war during a meeting in South Korea last October.

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U.S. business leaders to travel with Trump for China trip

Elon Musk, and more than a dozen other U.S. business executives, will accompany President Donald Trump on his trip to Beijing this week as part of a wide-ranging summit with Chinese President Xi Jinping. File photo by Francis Chung/UPI | License Photo

May 11 (UPI) — President Donald Trump will be accompanied by 16 senior executives of U.S. companies for his trip to Beijing to meet with Chinese President Xi Jinping.

The White House on Monday shared a list of the executives, which include Tesla’s Elon Musk, Apple’s Tim Cook, BlackRock’s Larry Fink and Boeing’s Kelly Ortberg, among others.

Cisco CEO Chuck Robbins was unable to join the trip, however executives from Blackstone, Cargill, Citigroup, Coherent, GE Aerospace, Goldman Sachs, Illumina, Matstercard, Meta, Micron Technology, Qualcomm and Visa will also travel to China with Trump.

Trump is expected to discuss trade, artificial intelligence, Taiwan and the Iran War, with the creation of a board of investment and a board of trade with China high on his list of goals for his meetings with Xi.

“We’re doing a lot of business [with China], but it’s smart business,” Trump told reporters during a press briefing in the Oval Office on Monday.

“We used to be taken advantage of for years with our previous presidents,” he said. “And now we’re doing great with China. We make a lot of Monday with China.”

The U.S. caravan will depart for Beijing on Tuesday, with meetings scheduled for the rest of the week between the two delegations.

Each of the executives traveling for the meetings has significant business interests in China, which is why they were asked to join Trump for the trip, White House officials have said.

President Donald Trump delivers remarks at an event he is hosting for a group that includes Gold Star Mothers and Angel Mothers in honor of Mother’s Day in the Rose Garden of the White House on Friday. Photo by Aaron Schwartz/UPI | License Photo

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Fears of an AI breakthrough force the U.S. and China to talk

Three years ago, in the idyllic town of Woodside south of San Francisco, the United States and China held their first high-level talks on the dangers posed by artificial intelligence. President Xi Jinping and his longtime foreign minister appeared serious in their conviction that a channel should be a established between Beijing and Washington — a red phone for AI in case of emergencies.

They authorized a diplomatic effort that would begin in 2024 in Switzerland, only months before the U.S. presidential election. A large U.S. delegation arrived with high hopes that were abruptly dashed, according to four sources who attended the talks. The Chinese contingent dismissed American concerns over runaway AI as academic, almost theoretical, quickly turning the conversation to export controls seen in Beijing as yet another U.S. effort to hold China back.

“They naturally view any American diplomatic initiative involving limitations or restrictions of one flavor or another on a capability as being a trap,” Jake Sullivan, U.S. national security advisor under President Biden, said in an interview.

Despite the distrust — and Democrats losing the White House to Donald Trump — an accord was struck in November of that year in Peru, where both sides agreed to keep AI out of the command and control of nuclear weapons.

“It was a breaking of the seal that we could actually do something on AI,” Sullivan said. “In the transition, I told the incoming Trump team that they should really pick up that dialogue. But the Trump administration’s view was just far more laissez-faire, and they didn’t seem particularly interested in it.”

“That’s all changed in the past few weeks,” he added.

A Trump administration once eager to gun for technological supremacy is now, for the first time, reckoning with the power AI could unleash if left unchecked.

In a surprise reversal, quiet discussions have taken place ahead of President Trump’s state visit to China this week to explore reviving talks on an emergency channel, officials told The Times, prompted by shared alarm in Beijing and Washington over the debut of Mythos, Anthropic’s powerful new model.

One senior administration official told reporters Sunday that the White House was looking to create a channel of communication for AI like others that they have “in many areas that have intense focus with the U.S. and China.”

“I think what that channel of communication looks like, its formality and what that looks like, is yet to be determined,” the official said, “but we want to take this opportunity with the leaders meeting to open up a conversation. We should establish a channel of communication on that matter.”

Mythos’ capabilities are seen across the industry and government as those of an unprecedented cyberweapon, able to infiltrate and exploit digital communication systems — including government databases, financial institutions and healthcare programs — with untold consequences.

Whether an announcement will come to fruition this week is not yet clear. Any talks between the United States and China over AI regulations — designing some kind of arms control agreement governing the use of a technology that neither side fully understands or controls — will be fraught with suspicion, misunderstandings and risk, experts say.

“Right now, there is almost no support from U.S. policymakers to engage in formal discussions on AI governance with China,” said Aalok Mehta, director of the Wadhwani AI Center at the Center for Strategic and International Studies.

“The logic is that this is a winner-takes-all race,” Mehta said, “and that it’s imperative to accelerate AI progress to ensure that the United States wins that race.”

America in the lead

China would enter those discussions with a powerful argument, that U.S. leadership in AI — and the prevailing strategy of American AI companies — is propelling the world to a fraught frontier.

Every major U.S. player in the arena — OpenAI, Google, Anthropic, Microsoft and Meta Platforms — is racing to be the first to build a model capable of artificial general intelligence, or AGI, a threshold without a common definition, but that most agree will require a model to perform any intellectual human task.

The prevailing theory is that the first to achieve AGI will secure a prize that multiplies itself: a self-training, recursively improving intelligence, growing exponentially and leaving all competitors in its wake.

Chinese companies, by contrast, are following a state-sanctioned strategy focused on integrating AI into siloed industries and systems, training models to improve individual tasks and accelerate growth in a more tailored approach.

“The Chinese believe there is no single race, but multiple races,” said Scott Kennedy, senior advisor on Chinese business and economics at the Center for Strategic & International Studies. “The U.S. is focused on achieving AGI, while China is focused on diffusion and applications of AI into the rest of their economy — manufacturing, humanoid robotics, all aspects of the internet of things.”

China scholars, AI industry insiders and successive administrations have questioned Beijing’s strategic thinking and forthrightness.

“It’s so baked into the community here that AGI will have this transformative potential that people can’t believe China isn’t focused on this, as well,” said Matt Sheehan, a scholar of global technology issues at the Carnegie Endowment for International Peace with a focus on China. “It says it’s focused on applications, but is that a fake out for an AGI program hidden in the mountains somewhere?”

But most insiders believe that Beijing’s guidance to Chinese companies reveals its true intentions.

“They are not as AGI-pilled as the United States is, and I think that remains the case today,” Sullivan said, “so they regarded a lot of the conversation in the U.S. around extreme frontier risk — misalignment and loss of control — as a bit abstract, and not really as relevant to how they saw AI diffusing in China.”

President Biden greets Chinese President Xi Jinping in Woodside, Calif., in 2023.

President Biden greets Chinese President Xi Jinping in Woodside, Calif., in 2023.

(Doug Mills / Pool Photo)

Although China’s progress has exceeded U.S. expectations — especially since DeepSeek released its model over a year ago — the state has focused computer power on specific applications rather than the broad strategy needed to develop more powerful models capable of advancing toward AGI.

“It’s not just chips. It’s money,” Sheehan added. “China’s leading companies are much more financially constrained than U.S. companies. There’s concern over a bubble here, but OpenAI is valued at something near $800 billion. Leading Chinese companies that have gone public are valued at $20 billion. There’s just an orders-of-magnitude gap in available financing.”

Still, some in the U.S. government fear China won’t need comparable computing power if it simply steals the technology wholesale.

Doing so isn’t simple. But last month, in a memo, the White House Office of Science and Technology Policy accused Chinese actors of “industrial-scale campaigns to distill U.S. frontier AI systems,” in effect replicating the performance of the most advanced existing models “at a fraction of the cost.” The memo did not accuse Beijing of endorsing the activity.

In the process, the memo added, carefully constructed security protocols are deliberately stripped away.

China’s negotiating advantage

Whatever its strategic calculus may be, China would enter talks with the Trump administration trailing in the race — while disagreeing on the nature of the finish line.

AGI, in theory, could reach a stage of recursive self-improvement that results in a loss of human understanding or control. But if it is only the Americans, and not the Chinese, seeking to reach that threshold, then who is responsible to stop it?

Daniel Remler, who led AI policy at the State Department during the Biden administration and took part in the Geneva talks, cast doubt on Chinese claims of disinterest in AGI and ignorance of its risks. China falling behind in the race is no strategic design, he said.

“Chinese technologists are close observers of the U.S. AI ecosystem, and sometimes they say what they think,” Remler said. “Many were impressed by the [Mythos] model to the point of despair. Leaders in China’s top AI labs have been vocal in recent months, even before Mythos, about how compute-constrained they are at the frontier. Some have said they may never catch their American competitors.”

Talks at this point in the race could follow a familiar pattern in the recent history of U.S.-China diplomacy, in which Beijing claims it is behind the United States in development, ultimately securing a handicap and greater concessions at the negotiating table.

In other competitive domains — such as with China’s entry into the World Trade Organization and in cybersecurity negotiations between Beijing and the Obama administration — agreements were ultimately reached that Washington believes in hindsight disadvantaged American companies.

The Trump administration, Remler added, “needs to approach AI diplomacy with China with clear-eyed expectations anchored to our own national interests.”

Silicon Valley itself is divided over regulating AI. Anthropic, which was founded on concerns that other AI companies were failing to take safety and alignment concerns seriously, raised alarms over Mythos, its own model, to the Trump administration, a moment that has prompted reflection at the White House on the best path forward.

Spooked after meeting with leaders from America’s top banks over their vulnerabilities, Treasury Secretary Scott Bessent internally advised U.S. government reviews of future model releases — a practice already underway in China, where the training parameters for models, known as “weights,” have been publicly released.

Even the suggestion of government oversight sparked backlash from Silicon Valley. Last week, the White House sent out a memo to reassure industry allies that submitting new models for federal review would be strictly voluntary.

If talks ultimately resume between Washington and Beijing on AI, experts believe the negotiations would be far more complex than those that resulted in arms control agreements governing nuclear weapons in the Cold War.

The superpowers would not only be discussing threats of instability to the global financial system, but also fears of proliferation — advanced AI tools getting into the hands of bad actors interested in using bio- or cyberweapons that could target both countries.

And they ultimately would have to decide whether to discuss regulating the integration of AI into the Chinese and U.S. militaries, an almost unfathomable goal between the world’s biggest adversaries, where trust is lowest and verification would be hardest.

Those in the industry who most fear what artificial superintelligence could bring have told the Trump administration that talks with China are an existential necessity.

Dario Amodei, the chief executive and co-founder of Anthropic, speaks at an event in New York in 2025.

Dario Amodei, the chief executive and co-founder of Anthropic, speaks at an event in New York in 2025.

(Michael M. Santiago / Getty Images)

But even within Anthropic, which has championed diplomacy, there are concerns that Beijing could exploit its current disadvantage to entangle American industry at the cusp of its crowning achievement.

Rather than pushing for a single sweeping agreement, industry insiders are advising the administration to pursue targeted deals with Beijing to mitigate specific risks, like the pact on nuclear command and control, two industry sources said.

In private, both Xi and Chinese Foreign Minister Wang Yi seemed to understand that the gravity of the emerging technology before them required some form of cooperation, Sullivan said.

“At a conceptual level, I believe they had a conviction on that and authorized it,” Sullivan said, “but I believe their level of urgency was considerably lower than ours, and saw this as a longer-term process that would play out over time.”

“Their level of urgency and their stake in it has gone up,” he added.

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China’s AI IPO Boom Leaves US in the Dust

Chinese AI firms dominate Hong Kong IPOs with $22 billion in exits, while US tech listings lag amid investor skepticism.

China’s artificial intelligence companies are driving a sharp divergence in global IPO markets, dominating first-quarter listings in Hong Kong and outpacing U.S. tech peers as investor sentiment fractures across regions.

Consider the trend: Chinese AI firms listed in Hong Kong accounted for four of the largest public listings in the first quarter. According to new data from PitchBook, these companies — Z.ai, MiniMax, Biren Technology and Iluvatar CoreX Semiconductor — collectively helped drive more than $22 billion in AI-related exit value during the quarter.

Adding Edge Medical, a surgical robotics company, brings the total for all five Chinese listings to over $24 billion.

The performance stands in sharp contrast to the muted reception many U.S. technology IPOs have faced. Investors have grown increasingly skeptical of richly valued software companies amid concerns that AI could disrupt traditional software business models.

“It’s genuinely a confluence of factors rather than any single driver,” Harrison Rolfes, senior research analyst at PitchBook, told Global Finance. “The DeepSeek moment in early 2025 fundamentally shifted investor perception of Chinese AI capability, and that rerating carried momentum into these listings.”

Rolfes said geopolitical considerations also played a major role, creating what he described as a “national champion premium” among investors in Hong Kong and broader Asian markets.

“Structurally, these companies came to market at more digestible valuations relative to their growth profiles compared to U.S. tech IPOs, which have repeatedly disappointed at high entry multiples,” he said.

Investor enthusiasm surrounding Chinese AI firms has emerged as U.S. IPO performance deteriorates.

A Record Stretch of IPO Underperformance

According to PitchBook data, the median U.S. IPO has underperformed its benchmark by 42 percentage points within 120 days of listing over the trailing 12 months.

“That’s historically the worst stretch in our dataset,” Rolfes said.

PitchBook noted that 2025 already represented a record low, with median IPOs trailing benchmarks by 35.6 percentage points after 120 days. Early 2026 listings are performing even worse, according to the report.

The closest comparison, Rolfes said, was the post-boom correction in 2021, when median U.S. IPOs lagged their benchmarks by 32 percentage points following aggressive pricing during the .

Globally, the median venture capital-backed IPO has underperformed the Morningstar U.S. Market Broad Growth Extended Index—a broad U.S. equity benchmark—by nearly seven percentage points over the past year. In the U.S., the index as a growth-stock yardstick shows that the gap widens sharply to 42 percentage points within 120 days of listing.

Roughly 66% of companies that have gone public since the start of 2025 are currently trading below their IPO prices, PitchBook found.

“The deterioration is progressive, suggesting that initial pricing optimism is giving way to fundamental reassessment as lockup expirations approach and more information reaches the market,” according to the May 5 report.

The divergence in performance has been particularly stark among high-profile tech listings.

SaaSpocalypse to Blame?

CoreWeave, based in Livingston, New Jersey, saw its shares nearly triple since its debut as investor demand for AI computing infrastructure accelerated. But many other venture-backed listings have struggled—badly.

Among the U.S.-listed laggards are shares of eToro, down 45.2%; Netskope, down 61%; Klarna, down 67.1%; Figma, down 85.7%; and Gemini Space Station, down 86.3%.

PitchBook said broader public SaaS markets have also weakened as investors increasingly treat AI as a threat to incumbent software firms rather than a growth catalyst.

“Public markets appear to be treating AI not as a tailwind for existing software but as a displacement risk, which many are calling a ‘SaaSpocalypse,’ in which incumbents are repriced downward even as private AI unicorns command record valuations,” according to the report.

For investors, the divergence raises questions about whether U.S.-listed AI companies still offer the best risk-adjusted exposure to the global AI boom.

“The companies leading Hong Kong’s surge — semiconductor designers, applied AI platforms and robotics-adjacent businesses — are generating real revenue with defensible vertical positioning, and they have outperformed their U.S. counterparts by a wide margin,” Rolfes said.

What’s Next?

Expect investors to take a closer look at how heavily their portfolios are tilted toward specific geographies, considering AI-related valuation premiums are persisting longer in Hong Kong than in New York.

Rolfes also cautioned that some of the highest-valued Chinese AI names could eventually face corrections. Still, the underlying businesses are stronger than many Western investors have assumed, he argued.

“The broader takeaway,” he said, “is that Chinese AI has likely graduated from a risk to monitor to a market to understand.”

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