The recent U.S.-China leaders' summit sent a cooling signal. The United States and China agreed to extend the trade truce and establish a communication channel for artificial intelligence safety incidents, giving a brief respite to the ongoing tension between major powers. What is truly noteworthy about this meeting is not whether U.S.-China relations are moving toward reconciliation, but that both Washington and Beijing have begun to accept the reality that competition between the two countries will not end in the short term, and preventing competition from getting out of control has become an important policy goal.
The United States and China are only cooling down, not moving toward reconciliation.
Observed from this perspective, U.S.-China relations are gradually entering a new stage in which technology, resources, security and institutions are comprehensively intertwined, from the past emphasis on competition on tariffs and trade deficits. Chips, AI, rare earths and Taiwan Strait security have not disappeared because of the summit. The United States still wants to maintain its advantages in high-end semiconductors and AI technology, and China has not given up its technological independence and key supply chain control capabilities. The summit reduced the probability of short-term conflicts and did not change the long-term competition structure.
Semiconductors are the clearest example. In recent years, the United States has incorporated advanced chips, semiconductor equipment and AI computing capabilities into its national security architecture, and its science and technology policy has long surpassed traditional industrial policy. China is accelerating the localization of semiconductors and independent development of AI, hoping to reduce its dependence on the technology of the United States and its allies. Chips are no longer just commodities, but the common foundation for national competitiveness, military capabilities and AI development speed.
Rare earths present another strategic structure. China still has a high degree of influence in global rare earth mining, refining and processing. The United States and its allies have been actively looking for alternative sources in recent years in the hope of reducing the risk of over-concentration in the supply of key minerals. The United States has some advanced technologies, and China has some key materials. The two sides have formed a relationship of mutual dependence and mutual defense. This interdependence does not necessarily lead to peace, but may instead make supply chains a negotiating tool.
AI has further brought the competition between the United States and China into a new area of risk. AI is different from traditional weapons. Algorithms, models, computing power and data can quickly cross national borders. Once a major security incident occurs, the impact may spread rapidly. The significance of the establishment of a communication channel for AI safety incidents between the United States and China is that both sides gradually acknowledge that even if technological competition continues, a minimum level of crisis management mechanism is still needed. The competition between major powers in the future may have two tracks at the same time. One is to compete for technological leadership, and the other is to prevent technological competition from evolving into uncontrollable systemic risks.
For Taiwan, what really needs to be alarmed is not the warming or cooling of U.S.-China relations, but that the international environment has entered a state of long-term uncertainty. Taiwan is at the core of the global semiconductor, AI hardware and high-tech supply chain, and is also in an important strategic position in the Western Pacific. Every adjustment in U.S.-China relations may directly affect Taiwan's export market, technology control, energy transportation and security environment.
The focus of Taiwan's policy cannot just be to determine whether Washington and Beijing will conflict in the next step, but to establish the ability for the domestic economy and society to operate normally even if the external environment suddenly changes. The semiconductor supply chain needs to increase the sources of key materials and equipment, energy policies need to reduce the impact of single path interruptions, and AI governance needs to establish an early warning system for information security, model risks, and critical infrastructure. Enterprises also need to incorporate geopolitical risks into procurement, production, logistics and market layout.
Taiwan participates in rule-making to avoid passive adaptation
Taiwan needs to actively participate in international technology standards and supply chain cooperation. In the past, Taiwan's advantages were mainly based on manufacturing capabilities. In the future, Taiwan's competitiveness will also include standard setting, data governance, AI security, information security regulations and trustworthy supply chains. Being able to participate in the formulation of rules can avoid having to passively adapt to the rules set by others.
The real message from the US-China summit is not that great power competition has ended, but that competition has begun to enter a more complex stage of management. Tariffs can be suspended, negotiations can be extended, and leaders can meet. The structural contradictions behind chips, AI, rare earths and Taiwan Strait security still exist.
Facing such an international environment, Taiwan's most important strategy is not to bet on whether U.S.-China relations will eventually lead to cooperation or conflict, but to reduce the harm caused to Taiwan by either outcome. Supply chain diversification, energy resilience, technological independence, AI governance and participation in international institutions must be promoted simultaneously. A truly reliable sense of security should not be based on a temporary handshake between major powers, but should be based on Taiwan's ability to choose and adjust when facing the next international shock.
