BEIJING—When President Trump returns to China nearly a decade after his last visit, he will find a country that is more self-sufficient, militarily assertive and economically insulated from the tools the president has used to stymie it and its ambitions.
China has caught up to or surpassed the U.S. in technologies such as batteries, robotics and advanced manufacturing. Its naval fleet is now the world’s biggest, while its nuclear arsenal keeps growing. It knows it has the capacity to respond to the many threats that Trump issues, with restrictions on rare-earth minerals or with other moves.
All of this has altered the balance of power between the U.S. and China, making it more likely that Beijing digs in on core issues of contention, say analysts and diplomats.
Expectations are low for the summit, which will likely include plenty of feel-good atmospherics and possibly some pledges by China to purchase more American products, but not a lot more.
It is possible Chinese leader Xi Jinping is overestimating his strength. The country faces deep-rooted economic challenges. It has struggled to catch up in some of the sectors that matter most, such as semiconductors, as Washington limits Beijing’s access to cutting-edge technologies.
But behind the scenes, Beijing feels more emboldened, and more insistent on defending areas it regards as vital to its long-term strategic interests.
These include resisting U.S. pressure to relax its grip over global supply chains and fundamentally rebalance trade between the two countries. They also include urging Washington to look the other way as it pressures Taiwan, the self-ruled island that Beijing claims as its own, and as it projects military power across Asia.
“They feel very well about how last year played out,” said Jonathan Czin, a fellow at the Washington-based Brookings Institution and a former U.S. intelligence officer focused on China. “They showed they could weather the storm and the administration had to climb down from the tariffs and spend most of the past year trying to mollify China.”
Many in the Trump administration argue that China has already blundered by flooding foreign markets with low-price goods, thus alienating trade partners. China’s controls on rare-earth minerals have galvanized opposition to Beijing, fueling efforts by Western allies to rebuild long-dormant supply chains.
Another wild card is the war in Iran. In some ways, it has played into Xi’s hands, enabling China to portray the U.S. as an agent of chaos while allowing China to present itself as a more predictable partner for other nations.
Yet it has also driven up energy prices and threatened China’s purchases of Iranian oil, which make up around 12% of China’s imported crude. As economic damage mounts, Beijing could be forced to play a bigger role in helping resolve the conflict, despite normally preferring to avoid such entanglements.
Fortress plan
During the first Trump administration, China was in a different position, flummoxed by Trump’s unpredictability and deeply worried that his tariffs would kneecap its economy.
Beijing’s top trade envoy, Liu He, engaged in roughly a dozen rounds of negotiations with Washington, often with large delegations, to hammer out a pact. The 2020 agreement called for China to buy more than $150 billion in U.S. goods, improve access to the Chinese market for U.S. businesses and refrain from forcing foreign companies to transfer technology.
While some in China breathed a sigh of relief, Xi vowed to ensure China wouldn’t be so vulnerable again.
“They kind of got punched in the face, and then they went back to the gym and got pumped up,” Czin said. “And we’ve experienced the results of that over the past year.”
Xi’s “fortress China” strategy involved spending hundreds of billions of dollars to boost homegrown technologies and reduce China’s need for American products.
“Even though it might be hard to quantify, it’s difficult if not impossible to dispute that China is now the second most powerful country in the international system, and in certain categories is stronger than the United States,” said Ali Wyne, senior research and advocacy adviser on U.S.-China relations for the International Crisis Group.
Militarily, the U.S. still has a formidable presence in the Pacific, with alliances in the region that pose a major counterweight to China’s strength.
Even so, Xi has built up China’s military to the point where its dominance of the country’s near periphery should now be safely beyond question, said Lyle Goldstein, director of the China Initiative at Brown University.
Already capable of hitting the U.S. homeland with a nuclear projectile, China has strengthened its so-called nuclear triad, meaning it can now launch a nuclear device from land, sea or air, he added.
Trump has openly acknowledged China’s growing stature, referring to a meeting of the two leaders as the G-2, or the “Group of Two” nations that, he suggests, call the shots on the global stage.
New assertiveness
China still prefers calm and stability in its relationship with the U.S., which means it may be willing to offer some concessions to Trump if it helps ease tensions between the two countries.
The U.S. remains China’s biggest single trading partner and its economy is still the world’s largest, meaning that a sharp rupture with the U.S. could inflict deep pain.
Washington and Beijing are weighing ways to cooperate on artificial intelligence, The Wall Street Journal has reported. The two sides are also discussing Chinese purchases of American agricultural goods, energy products and Boeing passenger jets, as well as a possible U.S.-China “board of trade” to facilitate commerce that doesn’t touch on national security.
Still, China’s rising confidence means it feels more comfortable in pushing back when pressure rises. Recent U.S. court cases that have invalidated some of Trump’s tariffs have given Beijing more confidence that it doesn’t need to give too much ground to Washington.
When Trump pushed tariffs as high as 145% last year, China went toe-to-toe with the American president before both sides de-escalated. Beijing more or less neutralized Trump’s ability to impose higher tariffs when it withheld exports of critical minerals the U.S. needs for manufacturing and for military applications.
The Trump administration has backpedaled from some of its more hawkish China policies, including curbing investigations into Beijing-linked hackers and telling officials to tone down their comments on China, the Journal reported last month. A new national-defense strategy, released in January, offered a conciliatory tone toward Beijing.
Xi is nonetheless dogged by serious domestic challenges that could weaken his negotiating position. A prolonged housing slowdown has sapped the wealth and confidence of millions of homeowners, while an increasing reliance on exports to drive growth has emerged as a major economic vulnerability. Should the world ease off on its purchases, that could pull the rug out from under China’s economy.
Even in the military sphere, China faces big questions after Xi purged many of its top leaders. The moves, ostensibly to reduce corruption in the military’s ranks, leave the top tier of Xi’s armed services, which haven’t engaged in combat for nearly half a century, decimated and demoralized.
None of this will make life easier for Trump, however.
“Beijing’s overriding objective is not to accomplish anything affirmative” during the summit this week, Czin said. “They want to buy time and space to prepare for the next round, so they are going to find out the minimum price point to get that from Trump.”
Write to Jonathan Cheng at Jonathan.Cheng@wsj.com
