1 October 2026

Xi Jinping got the red carpet treatment from Trump - but not everything he wanted

Bbc | Laura Bicker

At the summit in Washington, President Xi Jinping enjoyed a high degree of ceremonial attention, but was unable to reach the main aims of his policy. The bilateral trade truce was extended by only a few months, from November to January, instead of being prolonged for a full year, so that the issues concerning tariffs, rare earth supplies, and advanced American chips were left for future talks.

Beijing is facing a domestic economic slowdown marked by low levels of consumer spending, a slow-moving property market, and high unemployment among young people, which means that protecting exports has become essential. Xi once again stated that U.S. arms sales to Taiwan are a red line after a previously postponed $14 billion arms deal that Trump used as a tool of diplomatic leverage. Regarding artificial intelligence, no specific safety agreements were reached beyond each side asserting its commitment to human control, and panda diplomacy has once again begun with the sending of Ping Ping and Fu Shuang to Atlanta.

Comment

The fact that the trade truce has been extended only to January shows how regularly bilateral economic leverage is used to delay agreed-upon compromises concerning rare earth supplies and access to advanced chips. Although the ceremonies held at the White House serve to give Beijing a favourable image at home, the decision to postpone serious disagreements about the fourteen billion dollar arms package for Taiwan leaves the basic security issues entirely unresolved.

Strategic Question for Discussion
How can Beijing adjust its export-dependent model of economic growth if the bilateral trade truce continues to provide only short-term extensions rather than long-term agreements while still securing access to advanced semiconductor supplies from the United States?
The evidence indicates that Beijing will keep on using state-supported industrial policy both to ensure that its domestic supply chains are secured and at the same time to separate trade negotiations from the sensitive territorial disagreements concerning Taiwan. Yet the continued weakness of domestic consumer demand limits the length of time during which exports alone can make up for the unresolved structural deficits.
Share your assessment in the comments below.