David Mahon summarises the outcomes of the recent US-China summit in Beijing from his unique Beijing-based perspective

By David Mahon*

"Temper your sharpness, disentangle your ideas, moderate your brilliancy, live in harmony with your age. This is being in conformity with the Tao. Such a man is impervious alike to favour and disgrace, to benefits and injuries, to honour and contempt.”

- Lao Zi, fifth century BCE.

China received President Trump and his entourage in Beijing last week under intense global scrutiny. The détente benefited both sides, and the watching world took some solace that, in volatile times, these two presidents met in person.

Expecting little, few were disappointed at the outcome of Trump’s three days in China. The fact they passed without major mishap, and that it was the first US-China engagement at which they met as great-power equals, was significant. President Xi was a gracious host, showing moments of uncommon spontaneity in a political culture where, while Chinese leaders are usually hospitable, even towards adversaries, they usually work within tight, well-prepared formulas. Trump was unusually contained behind his characteristic grin.

It is important that an American president met his counterpart on Chinese soil for the first time in nine years. Any time great powers meet, there is potential for deeper understanding and a chance that each may temper the other’s actions in projecting its power, at least at the margins.

Washington’s poor preparation for the détente was emphasised by what appeared to be a hurried meeting between Chinese Vice Premier He Lifeng and US Secretary of the Treasury Scott Bessent in Seoul on the eve of Trump’s arrival. No China specialists or even experienced diplomats accompanied Trump. His entourage was comprised of the usual former conservative TV anchors and real estate magnates. Trump is dismissive of the US foreign service to the extent that 115 of Washington’s 182 embassies still lack ambassadors, and he has removed many of Washington’s experienced sinologists.

Elon Musk, Apple’s Tim Cook and NVIDIA founder and CEO Jensen Huang accompanied Trump, and may have shared their China experience and insight, but that was not evident. Trump was characteristically crass. For example, he made no attempt to recall, if he ever knew it, the name of Taiwanese president Lai Ching-te, the political ghost at the Beijing banquet.

Trump said China agreed to purchase 200 Boeing jets — confirmed by Boeing, but not yet by Beijing. His delegation mentioned a breakthrough on China’s commitment to buying more US farm products, although no agreements were signed, nor were there any memoranda to support a Chinese commitment to buy more US oil and for the US to lift sanctions on Chinese companies buying Iranian oil. Trump’s team indicated that they extended the trade truce, and both sides announced Washington would establish jointly staffed boards of trade and investment to manage the US-China economic relationship to avoid conflict. As Iran has learned, a US truce is one in which the US continues to wage war through blockade. Washington’s determination to block China’s rise, supported by both Republicans and Democrats, has been a fulcrum of US foreign policy since President George W. Bush, making meaningful collaboration on future boards of trade and investment highly unlikely. More tariffs will be applied and embargoes mandated.

Trump referred to exchanges in which China agreed to restrict help for Iran’s nuclear development, but these were missing from Chinese summaries of the discussions. China does, however, not want Iran to develop a nuclear weapon.

In a strange alchemy of toxicity and attraction, the US-China détente worked superficially. Trump craves the centre of the stage and constant flattery. In Chinese traditions of hospitality, the guest is flattered and contention avoided, for at all times Chinese hosts confer face on their guests as they would expect face to be conferred on them. In a Chinese diplomatic context, face is a governing principle in relationships between states where each recognises the other’s status and dignity. Trump soaked up the flattery and apparent deference, seemingly oblivious to the fact that it was not acquiescence or heartfelt respect and that the trust and empathy he shares with Xi only exist in his imagination. Xi does not trust the man who has waged a trade war against his country for a year, fronting an administration which has fought to contain China for 33 years.

Xi warned the US against supporting Taiwan with a directness uncharacteristic of a state banquet speech. He veiled it thinly behind an allusion to the Thucydides Trap — which assumes that, in China’s case, the rising power is not so much supplanting as it is diminishing the primacy of the incumbent hegemon. Xi has previously rejected the inevitability of the US and China falling into the trap Thucydides described, but was subtly suggesting in his speech that the US was the declining power in the relationship.

Neither Trump nor Xi may follow through on commitments their teams made. Whatever was agreed on soybeans, aircraft purchases or rare earths may be bedevilled in detailed execution and prove to be largely performative. With some directness, but mostly innuendo, both sides signalled their geopolitical concerns. Trump’s discouragement of Taiwan declaring independence was a concession to his hosts, although he equivocated on the issue of the pending USD 14 billion arms sale to the island.

Trump probably came hoping for practical help with his war with Iran, but appeared to get little.

Trump is likely to try to exit the Iranian entanglement with a spasm of missile strikes, leaving Iran with significantly degraded military and civilian infrastructure, but greater political and economic agency in the region than before the war. The China trip may have reinforced his intention to quit. As America departs from the Persian Gulf, China will not fill the political space it leaves. It will benefit from reconstruction projects and resources priced preferentially in the future, but Beijing is likely to let the region find its own power equilibrium.

Xi will continue to work to encourage Iran to avoid escalation of regional tensions and help broker peace and economic stability. China rues the fact that Iran will, nevertheless, likely continue to levy tolls for passage through the Strait of Hormuz, resenting the US for having created the conditions for this and even more so for the precedent it has set with other nations now considering similar measures.

Jakarta has indicated it may charge ships for the right of passage through the Straits of Malacca. While not as directly affected by the partial closure of the Strait of Hormuz as most nations — 30 Chinese tankers passed through while Trump was in Beijing — China dislikes the fact that its trading partners will face greater economic costs and deplores the US’s dismantling of the over 200-yearold principle of freedom of navigation. You may ask tolls for the use of the canals you build, but not for passages forged by geography.

Xi will probably travel to New York to address the United Nations General Assembly in September. If so, he may add a state visit to Washington, signalling the US had slipped in geopolitical importance. He may also announce a state visit to Washington, to which he would add an address to the UN General Assembly, conferring face on Trump. Despite the economic tariffs and embargos, Trump has been circumspect with China militarily and geopolitically. It would be in China’s interest to nurture this stance while Trump is in the White House.

*David Mahon is the Executive Chairman of Beijing-based Mahon China Investment Management Limited, which was founded in 1985. This Briefing is here with permission.