U.S. President Donald Trump (Republican) gestures to Chinese President Xi Jinping as he leaves after visiting Zhongnanhai Garden in Beijing, May 15, 2026.
Evan Vucci | AFP | Getty Images
Hello, I’m Evelyn. I am writing to you from Beijing. Welcome to the latest edition of The China Connection. This is a concise summary of what I have seen and heard from local companies.
US President Donald Trump has left Beijing after a much-anticipated two-day visit with Chinese President Xi Jinping. Fanfare aside, what has changed for business?
big story
After the important Trump-Xi meeting in Beijing last week with more than a dozen US government officials, the US and China agreed on one word: “constructive strategic stability.”
But what does that actually mean?
From an economic and trade perspective, the term amounts to “a form of commercial détente,” said James Zimmerman, president of the American Chamber of Commerce in China.
In practical terms, he said, this would demonstrate a willingness to dialogue, create space to resolve disputes without reintroducing the uncertainty of a trade war, and boost business confidence.
China stressed that this framework will set the tone for at least three years, or the remainder of President Trump’s term.
“This is a fundamental change from the previous definition of unilateral strategic competition,” said Hai Zhao, director of international political research at the Chinese Academy of Social Sciences, a state-backed think tank.
He said the two countries can use the months leading up to Xi’s planned visit to the United States on September 24 to lay the foundations for further cooperation on fentanyl, immigration, expanded people-to-people exchanges and tourism.
3 major shifts
It would not have been possible to get to this point without changes on several fronts.
First, US Secretary of State Marco Rubio accompanied President Trump on his visit to Beijing in 2020, when he was still a senator, despite travel sanctions imposed by China.
Mr. Zhao said Mr. Rubio, who also serves as interim security adviser, is currently his “designated interlocutor.” “Therefore, there is no reason for China to invite him for this visit and cooperate with him in the future.”
Zhao also said the Chinese government hopes that President Trump will be able to keep domestic anti-China forces at bay and maintain bipartisan support for stable U.S.-China relations after November’s midterm elections.
Second, the Chinese government has made its position on Taiwan clear.
Mr. Xi warned Mr. Trump that the island, which the Chinese leader has described as the biggest issue in U.S.-China relations, could put relations between the two countries in “great danger” if handled incorrectly.
Meanwhile, President Trump opposed the idea that Taiwan should pursue independence, especially with support from the United States, and urged both sides to “calm down,” according to an interview with Fox News that aired Friday afternoon.
The comments signaled a clearer position on Taiwan than during the Biden administration, when the White House had to reaffirm long-standing U.S. positions after the president’s comments implied otherwise.
Third, China is increasingly playing a long game over technology.
Nvidia CEO Jensen Huang was mum about China’s chip sales when he stopped to speak to reporters on his way to a group meeting with Chinese Premier Li Qiang.
Huang said Trump “asked me to come,” adding that he was in Beijing to support the president during the summit.
But when asked about the Nvidia H200 chips, President Trump suggested that China had chosen not to buy the chips, but left open the possibility that that could change.
“This is a calculated defensive move by President Xi,” Ting Lu, Nomura’s chief China economist, said in a note.
“The Chinese government is reluctant to bind major tech companies to a regime of U.S. regulations that directly enriches the U.S. Treasury through a 25% surcharge and weakens Beijing’s efforts to support domestic AI chip makers.”
Just as China in 2025 was much better prepared to withstand US tariffs than it was in 2018, the strategic stakes in the technology race are now becoming clearer.
need to know
China’s April economic data disappoints, with retail sales growth slowing to lowest since 2022
Retail sales in April increased by only 0.2% compared to the same month last year, while fixed asset investment has declined since the beginning of the year as the real estate slump worsened. Industrial production rose 4.1%, which was also lower than expected.
US can hold AI talks with China because ‘we are in the lead,’ Bessent tells CNBC
The United States and China “will develop protocols in terms of how we move forward with AI best practices to ensure that non-state actors do not have access to these models,” U.S. Treasury Secretary Scott Bessent told CNBC’s Joe Kernen on Thursday.
State dinner, selfie with Musk, fan noodle run: scenes from Trump’s Beijing visit
In parallel with the Trump-Xi summit, videos and photos emerged on social media of US executives, particularly Tesla CEO Elon Musk and Nvidia CEO Jensen Huang, interacting with locals and strolling around Beijing.
very soon
May 18-19: APEC senior officials meet in Shanghai
May 19-20: Russian President Vladimir Putin makes a state visit to China
May 21: Xiaomi holds a launch event for YU7 GT SUV in Beijing
May 20-23: APEC Trade Ministers Meeting in Suzhou
May 24-27: IEEE International Symposium on Circuits and Systems in Shanghai
