June 2, 2026
Observer Research Foundation
By Kalpit A. Mankikar
With the pomp and pageantry surrounding United States President Donald Trump’s meeting with his Chinese counterpart now receding in the public imagination, the brass tacks of their bilateral relationship are coming into sharper focus.
The two nations have resolved to pursue a “constructive relationship of strategic stability.” A Xinhua commentary deciphers the construct as “cooperation being the mainstay,” with competition kept in check, differences moderated, and lasting stability with peace charting the new direction of the Sino-American relationship. While Trump has billed his summit in Beijing with Chinese President Xi Jinping as “historic,” the tenor of the language in Chinese reportage suggests that Beijing sees it as a work in progress, noting that both sides are “consulting” on the details.
The Trump administration grounds the “historic” nature of the summit with China in Beijing’s commitment to purchase 200 Boeing aircraft — the first such deal since 2017 — which is expected to generate skilled jobs in American manufacturing, along with China’s resumption of poultry imports, pledges to purchase farm products worth $17 billion annually over the next two years, and the honouring of previous soybean purchase commitments made in October 2025. On agricultural purchases, China stated that an agreement was reached to promote the “expansion” of two-way trade across sectors, including agricultural products, through the “mutual reduction of tariffs” on a range of goods, and to actively “push to resolve” US concerns regarding Chinese poultry imports.
On official bilateral mechanisms for managing economic engagement, the White House envisages a US-China Board of Trade to manage trade across non-sensitive products, and a US-China Board of Investment as a government-to-government platform for capital flows. Beijing envisions the trade body as a framework for reciprocal tariff reductions, with goods worth US$30 billion identified for trading at relatively lower tariff rates. The mechanism is also being framed as a platform for addressing mutual concerns in trade and investment, shifting bilateral dynamics from “crisis response” to “institutionalised management,” and providing effective institutional safeguards for economic cooperation. Huang Jing of Shanghai International Studies University argues that such institutional mechanisms effectively lay to rest the campaign to minimise China’s participation in international supply chains — an effort initiated during the Trump 1.0 and Biden administrations — with the US tacitly conceding that this approach is unsustainable. In the pivot from decoupling to renewed economic engagement, the Chinese sense a victory.
On the issue of rare earths, China unveiled sweeping rules in October 2025 that tightened controls on components integral to technology supply chains — including artificial diamonds with industrial uses — and placed rare earths such as holmium, erbium, thulium, europium, and ytterbium on an export-control list, along with equipment used in the production and processing of these materials and in the manufacture of magnets. At Xi’s meeting with Trump in South Korea in October 2025, the White House announced that China had committed to eliminating both “current” and “proposed” export controls on rare earth elements and other critical minerals. Following that summit, Beijing pledged to suspend for one year the export restrictions instituted in October 2025. Following the Beijing summit, while the White House stated that China would “address US concerns” regarding both supply chain shortages related to rare earths — specifically yttrium, scandium, neodymium, and indium — and curbs on the sale of rare earth production and processing equipment, China’s Ministry of Commerce has committed only to working with the US to ensure the security and stability of global supply chains.
Meanwhile, Beijing’s strategists have been assessing the factors behind the rapprochement and the evolving nature of Sino-American relations. Huang Jing notes that the current period has been the most challenging for Trump: his military strike against Venezuela has eroded America’s moral standing in international affairs, and his war against Iran has lacked international legitimacy and support even from US allies, deepening America’s isolation. Huang thus concludes that Washington has “acknowledged” power parity with Beijing — a development that marks a turning point in the dynamics between the two nations — giving rise to the notion of competitive coexistence under the framework of constructive strategic stability.
Ding Yifan from Renmin University’s Institute of Global Governance and Development argues that the US has been “humbled” by a comparatively weaker power in Iran, and that Trump has been unable to resolve the stalemate of the Strait of Hormuz blockade — which has led him to “swallow his pride” and engage with China to “boost his ratings ahead of the US midterm elections”. Incidentally, the minutes of the Trump-Xi summit released by the White House highlight agreement on keeping the Strait of Hormuz open for energy trade, China’s opposition to the militarisation of the Strait and to attempts to charge a toll for passage, and opposition to Iran acquiring a nuclear weapon. However, the Chinese readout of the summit merely notes that the two leaders “exchanged views” on issues including the Middle East situation, the Ukraine crisis, and the Korean Peninsula.
A common sentiment among Chinese strategic thinkers is that the diplomatic history of the US and China can be divided into two phases: from 1972 to 2017, marked by a mix of cooperation and competition, and from 2018 onwards, characterised by “comprehensive strategic competition.” Towards the end of 2017, the first Trump administration released its National Security Strategy, which categorised Beijing as challenging Washington’s power and interests and undermining its security — developments that necessitated a revision of US engagement policy towards its rival. The Chinese establishment later complained that relations had deteriorated since the US had begun hyping the “China threat theory“, imposing technology curbs, and allegedly interfering in China’s internal affairs. There is a belief that the US sought to exploitissues related to Xinjiang, Tibet, Taiwan, and Hong Kong, in addition to forging blocs such as AUKUS with Australia and the UK, and the Quadrilateral Security Dialogue with Australia, India, and Japan.
Professor Jin Canrong from Renmin University — a seasoned scholar of US-China relations — posits that the current construct of a “constructive relationship of strategic stability” is the foundation of equalitybetween the two nations, and has ushered in a phase of relative equilibrium. Jin argues that China has pushed back against the US across the spheres of tariffs, industry, technology, and the military on the basis of its intrinsic strength, yielding tangible results in 2026 — an allusion to the Trump-Xi Beijing summit. He notes that the US tariff war against China led to shortages of goods in America that hurt consumers; that technology curbs spurred a campaign for self-reliance and home-grown innovation in China, exemplified by DeepSeek, developed at a fraction of the cost of US alternatives; and that China’s “success” in military modernisation was showcased at the People’s Liberation Army parade in September 2025. These “accomplishments” are seen by Beijing as the factors that compelled Trump to “respect” China.
To conclude, it is becoming increasingly clear that despite sustained negotiations, Beijing’s export-control regime remains firmly in its arsenal, and that it can weaponise economic resources at will to achieve its geopolitical aims. Second, Beijing’s strategists perceive Trump as bogged down by myriad conflicts in Europe and West Asia and enfeebled by a rupture in his alliance system; China, by contrast, has withstood tariffs, technology curbs, and sustained geopolitical pressure. This buoyant outlook in Beijing has led Xi to underline that Taiwan is the “most important issue” in the bilateral relationship. Xi has cautioned Trump that any mishandling of Taiwan carries the risk of conflict, with the potential to jeopardise the broader bilateral relationship. Whether China’s confident self-image will unsettle the Asian security architecture is a question that will only be answered in time.
About the author: Kalpit A. Mankikar is a Fellow with the Strategic Studies Programme at the Observer Research Foundation.
Source: This article was published by the Observer Research Foundation.
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