CNBC’s The China Connection Newsletter: Watch this on President Trump and Xi’s summit

Hello, I’m Evelyn. I am writing to you from Beijing. Welcome to the latest edition of The China Connection. This is a snapshot of what I’ve seen and heard from local businesses.

I’m rejoined by my Singapore-based colleague Anik Bao to unpack expectations in China and abroad for the high-profile summit in Washington, DC, later this week. Fanfare aside, what will this conference accomplish?

Ahead of this week’s long-awaited summit, many in China sound far more optimistic about bilateral relations than the United States.

This reflects Beijing’s growing confidence after it became the first major economy to retaliate against the Trump administration’s “Liberation Day” tariffs in April 2025. But America’s list of concerns continues to grow. Staying ahead of China in the artificial intelligence race has become a recent concern for the US government.

As Chinese President Xi Jinping heads to the United States for his first state visit since the Obama administration, companies are paying attention to:

The two countries are expected to extend a trade ceasefire that expires in November, but questions remain over how long it will last.

During a meeting in South Korea last fall, US President Donald Trump and Mr Xi agreed to suspend rare earth export restrictions and retaliatory tariffs for one year.

When the two leaders subsequently met in May, Beijing agreed to increase purchases of U.S. agricultural products and Boeing jets, while the two sides planned new trade and investment cooperation mechanisms.

The two countries also decided to jointly pursue “constructive strategic stability.”

That May summit marked the beginning of a “U-turn in China-US relations,” said Zhou Bo, a retired senior colonel, China Forum expert, and senior fellow at Tsinghua University’s Center for International Security Strategy.

He said it was unusual for the Chinese government to be recognized as an equal power. “Stability is found only between countries of equal power.”

So far, China has ramped up its purchases of U.S. soybeans in recent weeks, completing nearly half of the 25 million tons of annual quantities it promised this year, according to Reuters.

but boeing At an event with Morgan Stanley last week, CEO Kelly Ortberg downplayed expectations that the Chinese government would fulfill its commitment to order 200 jetliners in a single blockbuster deal, instead expecting more orders from individual airlines.

Chad Brown, a senior fellow at the U.S.-based Peterson Institute for International Economics, told reporters on Monday that “the best thing the United States can hope for is probably to maintain the status quo.” “It’s really because of the influence that China now has in rare earths and permanent magnets.”

“Until that issue is resolved, China will indeed continue to have such influence and veto any significant demands that the U.S. government may have,” he said.

The Chinese government confirmed on Monday that Mr. Xi will visit the United States from Wednesday to Friday. The visit is expected to mirror President Trump’s 1 1/2-day visit to Beijing in May.

China’s AI research labs have closed the gap with their American rivals this year, but American companies are warning of the risks of developing technology faster than they can control.

However, it is unclear what kind of cooperation regarding this technology will take place. Chou said a general dialogue similar to the previous AI talks in Geneva is possible.

U.S. Treasury Secretary Scott Bessent said senior negotiators from both countries discussed establishing a “U.S.-China AI Dialogue” in New York over the weekend. He noted that the United States has proposed establishing a notification system for AI incidents.

His counterpart, Chinese Vice Premier He Lifeng, is in the United States to hold talks until Wednesday in preparation for the summit.

U.S. concerns about AI have accelerated since early last week, according to people familiar with the idea who have been in Washington in recent days and said AI will also be a part of talks between Mr. Trump and Mr. Xi. The sources requested anonymity due to the sensitive nature of trade talks.

Key aspects are likely to cover how China uses AI to disempower nefarious actors, the people said, asserting that efforts to get China to buy products are important. Nvidia The H200 chip was not a significant part of the discussion.

U.S. executives scheduled to attend President Trump’s state dinner include Amazon’s Jeff Bezos, Elon Musk, Google’s Sundar Pichai and Michael Dell, Nvidia’s Jensen Huang, OpenAI’s Sam Altman, Citigroup’s Jane Fraser and Apple’s Tim Cook, U.S. officials said.

However, sources said as of Friday, the United States had not received any visa applications for Chinese business participants.

Regarding the Investment Committee, although a formal proposal was made in May, few details have been made public.

Orville Shell, director of the Arthur Ross Center for U.S.-China Relations and vice president of the Asia Society, said both Chinese and U.S. companies need assurance that the geopolitical environment is stable enough to see the return on investments in each other’s countries.

And that’s a difficult question in the current environment.

When Mr. Xi and Mr. Trump meet in Washington, any discussion regarding Taiwan is expected to take a backseat to Iran.

Beijing has largely avoided direct intervention in the war between the United States and Iran, instead acting as a facilitator for ceasefire negotiations.

Iranian Foreign Minister Abbas Araghchi met with China’s top diplomat, Wang Yi, in Beijing last week, as the Iranian government seeks more support from its biggest oil buyer. For his part, President Trump told Fox News that he is “open to” meeting with Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly in New York this week.

“Given how difficult and urgent this issue is, and how devastating the war is to the global economy and energy markets, I think Iran will feature heavily in the conversation,” said Daniel Kritenbrink, a partner at the Asia Group and former U.S. assistant secretary of state.

He said the United States would seek to force China to avoid supporting Iran, military or otherwise, and possibly use its relationship with Iran to encourage a resolution.

While Xi is likely to restate Beijing’s long-standing positions at the next summit, such as opposition to U.S. arms sales to Taiwan, Krietenbrink does not expect Taiwan to feature as prominently as Beijing.

In May, Mr. Xi emphasized to President Trump the consequences of mishandling Taiwan. The Chinese government considers this independent and self-governing island part of its territory.

This week’s summit is just the latest meeting aimed at stabilizing bilateral relations. If all goes well, Trump and Xi could meet two more times this year.

However, China’s domestic demand remains weak and China’s export machinery is expected to remain largely unchanged as the US continues to rely on Chinese companies for many critical components.

“People are even starting to wonder if we could climb to the top and die,” said Schell of the Asia Society. He cited growing global distrust of Chinese exports, including the impact on jobs in Germany’s auto sector, and said something must happen that would make both countries more flexible.

“China has achieved much through the reliable miracle of economic boom, exporting manufacturing and becoming a supplier to the world,” he said. “Why can’t we just relax a little and enjoy this success? Why be so aggressive that it makes so many countries on our borders (and maritime borders) uncomfortable?”

He added: “You could ask Donald Trump the same question.”

—CNBC’s Garrett Downs and Ashley Trujillo contributed to this report.

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September 23-25: Chinese President Xi Jinping is scheduled to meet with President Donald Trump in the United States

September 25: Stock markets in mainland China are closed for the Mid-Autumn Festival. hong kong open