Small wins in an ‘infinite game’: The limits of Xi-Trump talks

(Edited and refined by Grace Chong, with the assistance of AI translation.)

After Chinese President Xi Jinping concluded his visit to India, the diplomatic community’s attention immediately turned to the possibility of a second meeting with US President Donald Trump in late September.

With less than ten days before the “auspicious date” of 24 September, repeatedly mentioned by US officials, Beijing has yet to confirm any plans for Xi to visit the US. Some Chinese officials have privately said that all sides are on standby, just waiting for the final call.

The Taiwan ‘red line’

A few days ago, Japan’s Kyodo News, citing sources, reported that China and the US were still engaged in final coordination. Beijing has stressed to Washington that Taiwan is a “red line” that cannot be crossed in bilateral relations, and that actions including arms sales to Taiwan could affect whether the meeting takes place.

According to the sources, Beijing has asked the US not to approve arms sales to Taiwan before the meeting. If Washington does so, Xi would put off his visit to the US.

It is a very small likelihood that the US would approve new arms sales to Taiwan during the brief window before the leaders’ summit. In other words, Xi is unlikely to cancel or postpone a late-September visit to the US over arms sales to Taiwan.

But if the second Xi-Trump summit goes ahead as scheduled, Taiwan will remain one of the key issues on the negotiating table.

At the China-US leaders’ summit in May, the two sides proposed building a “constructive relationship of strategic stability”, with the Taiwan “red line” a critical part of that framework. Securing statements on Taiwan from the Trump administration that better reflect China’s preferences, as well as an end to arms sales to Taiwan, would be concrete demonstrations that the “red line” is being respected.

For Beijing, the demand to halt arms sales to Taiwan will extend well beyond the brief window before Xi’s visit to the US. It will be a litmus test of whether the two sides can establish a “constructive relationship of strategic stability”. For Trump, however, it is a matter of using strategic ambiguity over Taiwan in exchange for concessions from Beijing on other issues, while accommodating the hardline pro-Taiwan stance at home.

Xi’s focus on a bottom line over Taiwan is bound to collide with Trump’s view of arms sales to Taiwan as a bargaining chip, making the two sides’ cognitive divide difficult to bridge. Even if the second Xi-Trump summit produces a temporary understanding on how to manage the Taiwan issue, the deeper and more enduring contradictions remains unresolved.

AI battleground

Since the previous Xi-Trump summit, one major new development in China-US relations has been the intensifiying competition in artificial intelligence (AI), which has emerged as a new arena of strategic rivalry.

In just the past few months, cutting-edge AI technology has advanced at a remarkable pace, drawing Chinese and US companies into an “infinite game” — playing indefinitely with no finish line, winners or losers. The previous rhythm of releasing new models annually has accelerated to updates every quarter, or even every month.

In July, China proposed establishing a “World Artificial Intelligence Cooperation Organization”, challenging the US-led “Pax Silica” initiative. At the BRICS summit, Xi also announced plans to establish an AI open-source community for BRICS countries. Both sides are putting considerable effort into expanding their AI networks and competing for influence over the rules governing AI.

Several major US AI companies have recently called for the development of cutting-edge AI models to be slowed, in order to buy more time to address mounting security risks. The calls immediately triggered heightened concern in China. The state-run Global Times published a commentary accusing the US of trying to curb China’s AI development through technological barriers and regulatory monopolies.

The problem, however, is that both sides want to maintain their lead, while each fears that if it stops moving forward, the other will overtake it. Some commentators have described China and the US as having fallen into a “prisoner’s dilemma” over AI amid a profound lack of trust between the two sides.

There have previously been reports that China and the US could hold their first AI safety dialogue before the leaders’ summit. But Trump’s recent dismissal of warnings about AI getting out of control, calling AI security threats a “hoax”, does little to inspire optimism.

AI regulation could be one of the issues on the agenda for the second Xi-Trump summit, but the chances of the two sides reaching an effective consensus are quite low. If they can at least begin negotiations on jointly managing AI risks, that alone would be a positive step.

Tariffs a low-hanging fruit?

Beyond this, China and the US also face the unresolved issue of tariffs.

The two sides reached a one-year trade truce in Busan last October, and extending the truce would be a positive option for both. At a regular press conference last week, a Chinese commerce ministry spokesperson also revealed that China and the US are negotiating a framework arrangement for reciprocal tariff reductions worth US$30 billion.

The US wants to ease domestic inflationary pressures, while China wants to stabilise trade with the US. Among the various items on the China-US agenda, the logic of exchange in tariff negotiations is the clearest and most reciprocal. Although US$30 billion is not a large amount, it could be one of the few low-hanging fruits available at the second Xi-Trump summit.

Limited room for breakthrough

There are many issues between China and the US. But with the two leaders meeting for a second time just over four months after their previous encounter, it is difficult to imagine that the two sides will achieve major breakthroughs.

Jonathan Czin, a foreign policy fellow at the Brookings Institution who previously served as director for China at the National Security Council during the Joe Biden administration, recently highlighted a political reality behind this pessimism that cannot be overlooked: after Xi’s visit to the US, the Chinese Communist Party will begin preparing for next year’s Party Congress, laying the groundwork for the Chinese leader’s fourth term. Trump, meanwhile, will face the midterm elections within weeks, and his position is not favourable, with the possibility that he could become a lame-duck president.

Czin argued that this stark contrast will reinforce Beijing’s existing perception of the US as a declining but still dangerous major power, while China is a rising one. The Chinese leader believes that time is on their side and that there is no need to rush into an agreement.

This may also explain why Beijing has remained relatively lukewarm towards the second Xi-Trump summit, which Washington has widely publicised.

The summit will nonetheless attract global attention. As for whether it will lead to a breakthrough, it is best to keep expectations in check.

This article was first published in Lianhe Zaobao as ““习特二会”的问题清单”.

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