For China and its supreme leader, Xi Jinping, the biggest takeaway from the remarkably unconfrontational summit in Washington may be simple: time.
This is a time to deal with the housing market collapse, which has wiped out the savings of tens of millions of Chinese families; it is a time to straighten out local finances, as land sales revenue has plummeted, and local governments are generally facing a lack of funds; it is also a time to further improve China's ability to withstand pressure, so that it will no longer be vulnerable to economic pressure from the United States and other industrialized countries.
The most far-reaching thing is to prepare for the five-yearly National Congress of the Communist Party of China to be held next autumn. At that time, the conference will produce a new senior leadership group to carry out work under the leadership of Xi Jinping.
"By striving to stabilize relations with the United States, China can better focus on core domestic issues," said Wu Xinbo, a well-known scholar on American studies at Fudan University in Shanghai.
When Trump first returned to the White House last year, Beijing probably would not have expected to gain such precious breathing space.
During the campaign, Trump vowed to impose extremely high tariffs on Chinese imports in an effort to reshape the U.S. industrial base. Just three months after taking office, he once increased tariffs to 145%, and his government also implemented a new round of strict technology trade restrictions with China.
However, the head-to-head confrontation has not evolved in the direction Beijing initially feared.
China has demonstrated its economic countermeasures, the most critical of which is its dominance of rare earth metals and magnets that are indispensable for automobiles, electronics and weapons manufacturing.
After Beijing tightened exports of rare earths to the United States, Washington rolled back some of its most aggressive measures. Tariffs have fallen from highs, some export controls have been relaxed, and the two governments have begun negotiating a series of temporary truces.
The economic fringe game between the two countries continues, especially in emerging industries such as artificial intelligence and robotics. However, the Trump administration has shifted from the unusual escalation strategy in the early days of its administration to a less confrontational model of dealing with China; in this model, China has also proven its ability to inflict heavy damage to the U.S. economy.
Many domestic China experts now view the Trump administration's policy toward Beijing as more compromising than the positions advocated by many Democratic and Republican leaders.
R. Nicholas Burns, who served as ambassador to China in the Joseph R. Biden administration and held an important position in the Bush administration, said: "In my opinion, the current policy appears to be too weak and runs counter to the consensus of senior leaders of both parties."
Therefore, at the beginning of Trump’s second term, Sino-US trade friction once posed a serious threat to China, but it is no longer an urgent priority for Beijing to solve. However, Beijing is not slowing down its stated strategy of relying on foreign countries for technology and energy.
Evan Medeiros, a professor at Georgetown University and former senior director for Asia affairs at the Obama administration's National Security Council, analyzed: "They are eager to gain time and stability because it will help them build a more resilient and self-sufficient economic system. This buys them time to reduce their exposure to the United States."
For two decades, Beijing has always implemented a firm policy of replacing high-tech imports with local production. The implementation of this policy has helped China become a leading producer of everything from batteries and solar panels to telecommunications equipment and electric vehicles. This not only reduces China's vulnerability to external economic pressure, but also makes other industrialized countries increasingly dependent on China's supply of key raw materials and industrial products.
Beijing has adopted a similar strategy when it comes to energy self-sufficiency. Its huge investments in electric vehicles, wind power and photovoltaics, and the construction of the national grid have reduced its dependence on imported fossil fuels and helped the country's economy avoid the impact of high oil prices and energy shortages caused by the Iran war.
China is also taking advantage of the respite brought about by the easing of trade tensions.
Since Trump returned to the White House, China's overall trade surplus has risen sharply and is expected to equal or even exceed last year's historical record of about US$1.2 trillion. Chinese exporters have rapidly opened up new markets such as Southeast Asia and Latin America, reducing their direct dependence on the United States; at the same time, a large number of goods are being exported to American consumers indirectly through third-party countries.
Finance Minister Scott Bessant revealed at the opening of the summit that the United States and China have agreed to extend the trade truce until January 10 next year. China’s Ministry of Commerce later confirmed the decision to extend the truce but did not specify a specific deadline.
This relatively short-term extension of the truce may reflect Beijing's strategic calculation: its negotiating leverage may further strengthen over time, especially if the Republican Party suffers a heavy setback in the mid-term elections.
McElwen pointed out: "The threshold for negotiations will change by then, because Trump will be passive and weak in the confrontation with China, and his need for China will be more urgent than now."
For U.S. negotiators, the truce extension allows them to continue pushing for a comprehensive deal as soon as possible after the midterm elections.
