The 'Jensen Huang scandal' shadows the APEC talks between the US and China leaders... Complicated calculation method

The spreading affair scandal of former Nvidia CEO Jensen Huang is casting a shadow over next week's U.S.-China summit.

While fierce negotiations between the leaders are expected over the extension of the US-China trade truce until January next year, some analysts say that the former CEO Hwang incident has put US-China relations to the test.

The face-to-face meeting between US President Donald Trump and Chinese President Xi Jinping is scheduled to take place at the Asia-Pacific Economic Cooperation (APEC) summit held in Shenzhen, China on the 18th and 19th.

The extension of the trade ceasefire, which was the only achievement during President Xi's visit to the US last September, is once again the main agenda. At the time, the two leaders extended the trade truce, which was until November, by two months until January 10 of next year, and promised to hold another meeting at APEC.

However, the affair scandal between former CEO Hwang and a woman suspected of being a Chinese spy appears to have become a major variable in the negotiations between the leaders of the United States and China.

The key to extending the U.S.-China trade truce is whether an interface can be secured between the U.S. export controls to China and China's rare earth export controls.

In a situation where the United States urgently needs to secure rare earth materials from China and China wants access to American cutting-edge technology, whether China attempted to steal artificial intelligence (AI) technology from former CEO Hwang through spies is bound to serve as a critical variable.

China dismisses this as a slander, but the United States has no choice but to respond if technology theft is confirmed. This means that the room for negotiation between the U.S. and China will inevitably decrease.

President Trump told President Xi that he did not intend to bring up the issue of former CEO Hwang's affair, but as the Democratic Party, which won a landslide victory in the midterm elections, began to investigate the truth and strengthen its response, it was placed under a significant burden.

The fact that the Republican Party and the Democratic Party, which have different positions on virtually all issues, are bipartisan when it comes to keeping the public in check is also a burden for President Trump.

Three Republican committee chairs in the House of Representatives, including the Chairman of the Foreign Affairs Committee and the Chairman of the Special Committee on U.S.-China Strategic Competition, have already sent a joint letter to former CEO Hwang, requesting that he attend a closed-door joint briefing on the 18th.

The 18th is the start of the APEC summit, and in line with the face-to-face meeting between President Trump and President Xi, the U.S. Congress, led by the Republican Party, is summoning former CEO Hwang to begin a full-fledged investigation into the truth.

President Trump, who maintained a close relationship and eased restrictions on Nvidia's export of cutting-edge semiconductors to China as former CEO Hwang wished, is also likely to face the brunt of a congressional investigation. There is a high possibility that the Democratic Party will focus on digging into President Trump's links and use this incident as an opportunity to strengthen export controls to China.

It is expected that China will be closely watching the scope of the allegations and the bipartisan response of the US Congress.

The fact that China's Ministry of Foreign Affairs emphasized the importance of stable management of U.S.-China relations after the phone call between the top diplomats of the United States and China on the 11th and said, "We are willing to appropriately handle differences of opinion and sensitive issues" seems to be related to this situation.

If the United States shows signs of strengthening export controls to China, China is likely to fight back by further tightening its grip on rare earth supplies. There are concerns that it may not be easy to find an agreement on the issue of extending the trade truce, which is scheduled to end on January 10th next year.

Jeff Moon, CEO of China Moon Strategies, an American consulting firm specializing in China, told Bloomberg News, "If China's espionage activities have stolen or attempted to steal NVIDIA technology, the United States must take action. At the core of the U.S.-China trade truce is the U.S. promise not to strengthen technology regulations and China's agreement to supply rare earth elements, and this incident directly touches the core of technology regulations."

U.S. Ambassador to China David Perdue's statement on the 11th that U.S.-China relations are "not smooth" can also be seen as suggesting that former CEO Hwang's affair is becoming a test for U.S.-China relations.

President Trump's plan to hold a U.S.-China-Russia summit to discuss nuclear disarmament and use this as a diplomatic achievement during this APEC summit could also be a major setback. There is a possibility that China, which was initially negative about the US-China-Russia nuclear disarmament talks, will not cooperate with President Trump and may try to use this as a bargaining chip between the US and China.

President Trump met with President Xi in Busan at the end of October last year and agreed on a trade truce, and has focused on preventing conflict between the two countries and stably managing relations. The two leaders are also scheduled to meet face-to-face at the G20 summit held in the United States in December.