Ahead of Xi-Trump talks: Middle East, trade, Taiwan loom large ​

Following the US’s appeal for China to press Iran to reopen the Strait of Hormuz, Iranian Foreign Minister Abbas Araghchi visited China on 6 May at the latter’s invitation. This is his first visit to China since the outbreak of the US-Iran war in late February.

Around 80% of Iran’s discounted oil exports go to China, a relationship that gives Beijing diplomatic and economic leverage over Iranian affairs.

However, China’s interests in the Middle East are not as extensive as the US’s and are centred mainly on energy security, so Beijing has so far avoided becoming deeply entangled in the region’s turmoil. By contrast, when clashes erupted along the Cambodia-Thailand border last December, Beijing stepped in to mediate, underscoring the priority given to neighbourhood diplomacy within its broader strategic agenda.

Vali Nasr, a professor of international affairs and Middle East studies at Johns Hopkins University, said on X that there has been a worry in China that the US could escalate the conflict after US President Donald Trump’s visit to China, and even insinuations that Beijing has supported this to undermine China-Iran relations. Araghchi’s visit to China at this juncture is therefore likely intended to align strategic positions with China.

On the Strait of Hormuz issue closely watched by the US, Chinese Foreign Minister Wang Yi struck a balanced tone during his phone call with Araghchi on 15 April, taking into account both Iran’s concerns and the freedom of navigation.

During his face-to-face meeting with Araghchi on 6 May, Wang further stressed the urgency of restoring passage through the Strait of Hormuz, using the phrase “as soon as possible”. He said, “On the Strait of Hormuz, the international community shares a common concern on restoring normal and safe passage through the strait, and China hopes that the parties concerned will respond to global calls as soon as possible.” 

According to a Xinhua readout, Araghchi likewise said that the reopening of the strait “should be handled properly and resolved as soon as possible”.

The China-US contest over Iran centres on two issues. China is dissatisfied with the US’s counter-pressure that could effectively block the Strait of Hormuz, thereby harming China’s energy interests. Meanwhile, Washington takes issue with China’s “teapot refineries” (refineries that operate independently and are generally smaller than the facilities run by state-owned oil giants) purchasing large quantities of discounted Iranian crude, providing Iran with funding. In response, the US has sanctioned these independent Chinese refiners, while China has invoked domestic legislation to counter US “long-arm jurisdiction”.

If the Strait of Hormuz issue can be resolved before the heads of state meeting between China and the US, China would not only be able to demonstrate in practice that it is indeed a “stabilising force” globally, but also reduce the confrontational tone of bilateral negotiations, though not necessarily serve as a “hard bargaining chip” to secure US concessions.

After all, the core of China-US strategic competition does not lie in Iran or the Strait of Hormuz, but in a comprehensive contest over technological dominance, supply chains, military security, international rules, discourse power and global influence. The Taiwan issue, meanwhile, remains the most dangerous flashpoint in the China-US rivalry.

In fact, ahead of the China-US leaders’ meeting and following exchanges between senior officials on both sides, both countries have already been engaged in multi-front competition over the framing and agenda of the summit.

On 30 April, Chinese Vice-Premier He Lifeng held a video call with US Treasury Secretary Scott Bessent and trade representative Jamieson Greer; meanwhile, Wang Yi spoke by telephone with US Secretary of State Marco Rubio, with contacts between senior officials from both sides paving the way for a Xi-Trump meeting.

The brief Chinese readout released afterwards highlighted, among other points, Wang’s statement that “head-of-state diplomacy has always been the ‘stabilising anchor’ for China-US relations”. He called on both sides to preserve the hard-won stability in bilateral ties and to properly prepare the agenda for important high-level interactions. He also stressed that “the Taiwan issue concerns China’s core interests and is the biggest risk point in China-US relations”, and urged the US to honour its commitments and make the right choice so as to open up new space for China-US cooperation.

According to Beijing’s narrative, direct contact between the two strongman leaders of China and the US would allow major issues to be decided directly. By placing the Taiwan issue at the centre of China-US relations, and even reminding Washington to “make the right choice”, Beijing is attempting to have a good hand at setting the agenda.

The US did not release any formal statement regarding the Rubio-Wang phone call. However, Rubio said at a White House press conference this week that Taiwan would be discussed at the Xi-Trump meeting, adding that neither country wished to undermine stability in the Indo-Pacific region because doing so would not serve either side’s interests. 

Meanwhile, when commenting on Taiwanese leader Lai Ching-te’s visit to Taiwan’s African diplomatic ally Eswatini, a US State Department spokesperson described Taiwan as a “trusted and capable” partner of the US.

Whether a so-called major “Taiwan deal” might emerge from this summit between the Chinese and US leaders, and whether the US might slightly adjust its wording from its longstanding position of “not supporting” Taiwanese independence to explicitly “opposing” it, are both key points of observation for outside analysts. Judging from the remarks by the US state secretary and the State Department, such a possibility appears rather slim. Of course, the final decision still rests with Trump, who is deeply versed in the art of the deal.

As for the video call between He, Bessent and Greer, both China and the US described the exchange as “candid”, suggesting that both sides directly voiced dissatisfaction with each other’s trade policies.

The Xinhua readout stated that the two sides conducted “candid, in-depth and constructive exchanges”, while Beijing expressed “serious concerns” regarding recent US economic and trade restrictions against China. 

Bessent also wrote on X that the meeting was “both candid and comprehensive”, while emphasising that China’s recent “provocative extraterritorial regulations have a chilling effect on global supply chains”.

Last month, China introduced two major new regulations, one targeting supply chain security and the other aimed at countering improper extraterritorial jurisdiction, with the intention of strengthening legal tools against sanctions and long-arm jurisdiction. Bessent’s remarks indicate that the legal struggle between China and the US will be an ongoing tug of war.

With the midterm elections coming up, economic and trade issues remain Trump’s top priority. The most likely outcome of the summit between the Chinese and US leaders is probably a continued extension of the truce in the China-US trade war; China purchasing American soybeans, aircraft and energy products in exchange for partial tariff reductions; and both sides continuing to hold on to their respective leverage cards — China with rare earths, and the US with advanced semiconductor chips.

Trump said this week that meeting Xi would be an important trip, while also claiming that the US leads China in AI. The struggle for AI supremacy — this is the ultimate showdown between China and the US. 

Trump, who enjoys the spotlight, once said he hoped Xi would give him a “big, fat hug”, though the chances of that appear quite remote. What he will almost certainly get, however, is another polished photo of Chinese and American leaders standing together, much like during his visit to China nine years ago, and much like China-US relations: turbulent undercurrents below handshakes and smiles.

This article was first published in Lianhe Zaobao as “中美元首会晤前的多线交锋”.

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