Analysis

President Donald Trump met General Secretary Xi Jinping in Beijing for a high-stakes summit that likely will mark a turning point in US-China relations for the rest of Trump’s term. For the first time, China entered negotiations assuming a position of strength, at least according to the CCP. From the CCP’s perspective, it holds the cards. Chinese tech innovation is rapidly accelerating; the US is mired in a war with Iran; and Trump’s domestic popularity is low ahead of midterms that the Republicans may lose. As Xi said explicitly during the summit, China is ascendant and the US is in decline. 

While this perspective is to be expected of Xi, this is the first US-China summit where he may be proven correct, or at least that he has a strong argument for his position. Regardless, the fact that Xi and the CCP thinks it is in the stronger negotiating position has consequences for Xi’s risk tolerance. He thinks the United States is declining, weak, and more in need of trade with China than China is with the United States. To have President Trump coming to Beijing–even if nothing is decided at the summit–is already a victory for Xi Jinping and the CCP in its obsession with political theater over substance, a symbol of China’s equal (and newly found) status as a superpower at least comparable (if not superseding) the United States. 

Not for the first time, Trump brought US business leaders, including Elon Musk, Tim Cook, and Jenson Huang (see “On the Hill”) to promote business. Their presence is notable, not in the least because the summit comes fresh off the heels of some negative US-China business headlines: China’s blocking Meta’s acquisition of Manus; PRC political curtailing of Nvidia’s chip sales to China; and continued restrictions on US companies operating freely in China. The priorities for Musk, Cook, and others, will be to try to reverse these restrictions, not to uphold US national security. Bringing pro-trade business leaders instead of senior military officers and national security experts conveyed to Xi that, at least for Trump, national security takes a back seat to short-term profits.

Despite this press of business promotion, the likelihood for US businesses writ large is that this summit will have achieved nothing. US firms are unlikely to enjoy easier access to China. The priority for China is political: beyond projecting an image of China as a superpower, Xi is pushing for removing US sanctions against Chinese firms accused of abetting Iran, minimizing the US’s capacity to economically damage China, and maintaining China’s path towards regional hegemony and increased global influence. Trump’s supporting cast of business leaders therefore, in part, speaks to the distinction in how the two sides saw this summit. The US viewed the meeting as trade talks with some key political issues thrown into the mix; China saw it as broadcasting its dominance over the United States. The US lost whatever leverage it may have had before Air Force One even took off from the United States.

One major takeaway from the summit is what was not said. These events may well yield a shift in tone–a set of implicit rules–about who is calling the shots in US-China relations, with Xi  coming out on top. In part, this is a predictable product of the two side’s political systems. The US is bound to short-term election cycles and leadership turnover, not to mention influence from multiple stakeholders within the system. China, devoid of leadership term limits or any other constraints of a democratic society, is afforded the luxury of thinking longer term and steering whole-of-society efforts to achieve the CCP’s political ambitions. 

Part of it, however, is also that the CCP is learning the Trump administration’s pressure points, from how to make US companies feel the heat in response to export controls, to engaging US allies as a substitute for their more challenging relationships with Washington. The result is likely a tougher global market for US companies as the opportunity for access to the Chinese market closes with increasing speed. 

Analysis

The uncertainty about the US-China summit illustrates a broader question in Washington: is China an adversary or a key trading partner? President Trump’s accompaniment by corporate leaders on his visit to Beijing highlights a seemingly shared wish to return to “business as usual” with China in the literal sense, prioritizing trade and commerce over national security. For US business leaders, the future of their engagements with China is also unclear. Do they hope to return to China as a key manufacturing base to source from, as an expanding market to sell to, or some combination of the two? 

For many US business leaders, the lure of the Chinese market is too great an opportunity to pass up. Framing China as an adversary threatens the potential of that market access. The challenge is that the China of twenty or even ten years ago, when many major US companies succeeded in the Chinese market, no longer exists. The CCP has reframed US business as increasingly unwelcome, either on national security grounds or because US firms are unwelcome competition for domestic ventures. US companies that maintain a foothold in China–namely those with manufacturing bases, like Meta, or those that continue to engage through joint ventures, like Apple–are finding their revenues and market shares shrinking. That won’t change despite the nostalgia for the old ways and the wishes for the future.

Voices from the business community have recently found receptivity in Washington for the view that China is primarily a partner, whether on managing climate change, advocating for shared approaches to AI safety, or for trade. This perspective sits uneasily against hawkish voices that see China as the most significant threat to US national security and way of life since World War II. (China hawks view Beijing as more dangerous than the Soviet Union; the USSR never had money.) Both have plausible reasons for their positions. After all, some minimal degree of cooperation is necessary if we are to avoid all-out war, and severing engagement is not practical for businesses that still must rely on China for their supply chains. 

This reality makes it challenging for the US government to decide firmly what its relationship is with China, which in turn makes for muddled signals: are US businesses being encouraged to invest in China, as would be assumed given those accompanying President Trump in Beijing, or will they be punished for doing so, as is the signal coming from some in Congress? 

Regardless of signals from the Hill, US businesses need to be aware that China risk is more than compliance risk. In other words, following US government guidance–which itself is subject to frequent changes–is insufficient to protect US businesses against the risk posed by engagement with China, ranging from IP theft and loss of valuable corporate assets, to cyber attacks and loss of market position. While the US government may still be trying to figure out its position on China; US businesses can make their own decisions about the risk of engaging China.

Analysis

While we wait for possible additional details, our earlier predictions about the Trump-Xi summit likely yielding limited results have, so far, proven accurate. The headlines agree that the meeting was largely symbolic and ended with little in the way of material outcomes. Tariff delays agreed upon last October are now extended until the next round of negotiations, which are currently scheduled for this September. This is a good sign for short-term market stability, as projections made with these circumstances in mind will remain true. Looking further down the line, the promises made and the limited deals cut last week offer clues as to what comes next.

US access to Chinese mined and refined rare earth metals remains a critical concern for both businesses and national security. US negotiators appeared to come away with a small victory, with China agreeing to help with US shortages of yttrium, scandium, indium and neodymium. However, this concession does not appear in readouts from the Chinese side. Note also the lack of announcement further delaying Chinese export controls originally implemented in October 2025, which are currently set to be reinstated in November. If allowed to take effect again, the export controls would upend the trade of critical technologies by requiring Chinese government permission to sell any foreign-made product containing even trace-levels of Chinese mined or refined rare earth products. Just as rare earth supply chains are finally finding their equilibrium in these uncertain times, that stability may come with a count-down timer if Chinese export controls are not delayed further. 

It is telling that the two sides came to no agreements on significant business deals despite President Trump’s impressive entourage. The lack of comparable business figures on the Chinese side, combined with an absence of major breakthroughs, already tells us that business deals were not Xi’s priority. Among the attending CEOs, Boeing’s Kelly Ortberg likely achieved the best deal, with China agreeing to purchase 200 jets; these numbers, however, were well below the goal of 750 jets, and Boeing’s stock value dropped almost five percent on the announcement.

China also made several generic promises that may or may not come to pass. Central to Washington’s read-out of the event is China’s agreement to the establishment of a Board of Trade and Board of Investment, which are intended as bilateral institutions dedicated to managing the US-China trade relationship. Continued tariff negotiations, for instance, are likely to be handled here, along with decisions about what goods will be labeled as sensitive. A potential victory for the US is China’s promise to buy US$17B of US agricultural products annually for the next three years, in addition to previous soybean purchase promises. Whether such promises will be made good, however, remains to be seen, as China has failed to fulfill a significant portion of its existing soybean purchase commitment. Deals like these are seldom guarantees that China will do as promised, but rather serve as bargaining chips for future negotiations. 

A generous interpretation is that the Trump-Xi summit managed to kick the can down the road on global trade. More problematically, it is possible that these new boards of trade and investment signal the US’s capitulation to China: It recognizes that China is not going to change how it does business and, therefore, the US is learning to accommodate that reality. Although stability remained Beijing’s central message, it came with the implicit threat that further upending current trade and political relations is an acceptable outcome if that is what is necessary to achieve China’s goals. In the end, businesses should enjoy the promise of stability, but remember that promises are not reality, and even if they all come to pass, they will last only until September.

Analysis

AI agents are increasingly center stage in discussions about the future of Chinese technology. In part, this is because of the high-profile acquisition (and subsequent blocking) of Manus by Meta, which focused mainstream attention on AI agents and assistants as a frontier technology. China’s attention on this emerging technology, however, encapsulates its bifurcated interest in AI agents as at once a harbinger of future economic growth, they also risk undermining the party’s monopoly on information and power. As Manus found out the hard way, the CCP is therefore focused on AI agents and agentic AI as a technology to be both encouraged and controlled, with a prioritization on the latter. 

The State Council’s “AI+” action plan announced in 2025 set a target of 70 percent adoption of AI agents in China by 2027, although what that precisely means (and how it will be achieved by PRC companies) remains undefined and up for debate. Building on this, China’s new guidance on AI agents–the first time that the CCP has acknowledged agentic AI as a technology in its own right–speaks to the prioritization of politics over innovation. Chinese firms will be encouraged to rapidly produce and apply new agentic models throughout the economy, but under a “safety first, innovation second” principle whereby development should comply with political directives above all else. In other words, “AI safety” stands for ensuring that the CCP’s priorities remain paramount; AI agents should follow party directives and parrot party positions on certain topics, all while reinforcing the primacy of the party over the economy. 

Defining AI safety in terms of the CCP’s political and ideological priorities is percolating into Chinese-led transnational conversations about AI regulation. On the face of it, advocating for AI safety seems like a sensible area of agreement for the US and China, and indeed is one potential arena on which Beijing and Washington should cooperate. What China means by “AI safety,” however–namely ensuring the primacy of the CCP’s politics in how agents are developed and used–will likely be lost in the conversation. The growing number of AI safety conversations happening around the world will therefore likely welcome China’s message on the topic without realizing that how the CCP understands “safety” is different to how it is understood elsewhere. (An analog from the world of terrorism is instructive. China and Russia often labeled any domestic dissidents or supporters of democracy as terrorists.)

For the US tech industry, this means that China can point to “safety concerns” to block a range of US-China tech engagements, from supplying hardware to attempted acquisitions of Chinese tech companies. It also means that, while tempting, using Chinese technologies, particularly frontier innovations like AI agents, is akin to interfacing with the CCP. In short, the real safety risk from China’s AI agents for US businesses is less about the technology itself, and more that their adoption–tempting as it may be–will fast track the handing over of US businesses IP, proprietary information, and trade secrets to Chinese competitors without even being asked.

Analysis

On May 11, 2026, Eileen Wang, the mayor of Arcadia, CA, resigned and pleaded guilty to federal charges for acting as an unregistered agent of the PRC. Department of Justice prosecutors allege that from late 2020 through 2022, prior to her time as mayor, Wang and her associate, Yaoning “Mike” Sun, used a website called US News Center to publish Beijing-directed propaganda. Sun pleaded guilty in October 2025 and later received a four-year federal sentence for his role as a covert agent of China. 

The prosecution exposes a vulnerability in US local institutions. Skeptics who dismiss municipal politics as irrelevant to great power competition overlook the fact that national politics is influenced from the local and state level. Moreover, Wang is not unique; where there is one agent, there are more. Linda Sun (unrelated to Yaoning Sun), who was serving PRC masters while in the New York governor’s office, is another example. In May 2026, the House Select Committee on the CCP warned that PRC actors targeted a committee aide for policy insights on rare earth minerals. In the United Kingdom, Bill Yuen and Peter Wai faced charges for allegedly assisting a foreign intelligence service by surveilling dissidents. Foreign influence on US politics is foreign influence and is illegal regardless of level. 

The PRC pursues this grassroots approach because it works. The PRC executed this operation through information laundering to give foreign policy goals a localized appearance. By placing PRC-approved content, including articles denying human rights abuses in Xinjiang, into community publications, the operation disguised state tasking as local news rather than PRC state propaganda. Use of WeChat also served as a central pillar of this effort as a coordination channel. Although WeChat is a legitimate tool for communication for Chinese diaspora communities, Wang’s case highlights how PRC linked actors exploit these familiar, PRC controlled platforms for tasking and feedback. 

This case also creates a practical due diligence requirement for US businesses. Companies often trust local officials and community media for securing permits, market access, and public engagement. If these partners follow foreign directives, they transform an unsuspecting company into a tool for a foreign influence campaign. Furthermore, current due diligence, such as standard background checks, fail to identify these vulnerabilities because they rarely capture coordination within foreign directed messaging groups or the way actors launder narratives through community media.