A lot’s changed since Xi Jinping’s last US state visit. Mostly in China’s favor

Beijing —  When Chinese leader Xi Jinping visits Washington this week, he will be sitting down with President Donald Trump in a vastly different position than the last time the two men met face-to-face in the United States nearly a decade ago.

At that 2017 summit at Trump’s Mar-a-Lago resort China was lagging America on multiple fronts and vulnerable to the tech and trade frictions Trump would unleash on it in the coming year.

Now, Xi arrives at the helm of a country that’s transformed.

The world’s second largest economy has emerged as a tech heavyweight. Home-grown tech talent is spurring Chinese AI models ever closer to Silicon Valley’s frontier. Beijing-based space firms are launching and landing reuseable rockets with their sights on global champion SpaceX. Companies from energy to AI, robots and memory chips have launched blockbuster stock debuts over the past year.

China’s manufacturing juggernaut racked up a $1.2 trillion global trade surplus last year, due in part to surging demand for its electric vehicles, solar panels and chips. Its grip on the supply chains for some exports – especially rare earths – has given Beijing unique leverage over Washington and Trump’s “America First” trade war.

And at a moment when the US is antagonizing allies and has yet to find a way to end its war on Iran that’s destabilizing the global economy, Xi has been burnishing China’s image as a responsible and dependable global leader.

Throughout policy circles in Beijing, there is a consensus: gone are the days when the US could make one-directional demands of China.

“China is far more confident than nine years ago and what’s even more important is that today China has found an effective way to keep the US in check,” said Wu Xinbo, dean of the Institute of International Studies at Shanghai’s Fudan University, who advises the government on foreign policy.

“Washington has to treat Beijing with more equality, respect and this relationship has to be more and more reciprocal.”

That doesn’t mean the stakes are low for Xi as he arrives in Washington for an expected three-day stay.

The Chinese leader is banking on China’s high-tech transformation to inject momentum into a slowing economy. Maintaining “constructive strategic stability” – an ambition the two sides agreed to during a meeting in Beijing in May – could help ensure frictions or conflict with the US don’t get in the way.

But buoyed by China’s growing global and technological clout, Xi will also be presenting to the US a new reality: while Beijing wants a stable relationship with the US, its rise doesn’t depend on it.

In a bullish editorial in party mouthpiece the People’s Daily on Wednesday that helps illustrate this confidence, China’s ambassador to the US warned that Taiwan and human rights are “red lines” for Beijing that cannot be crossed.

“China’s sovereignty, security, and development interests must not be violated. The four red lines concerning the Taiwan issue, democracy and human rights, China’s political system and development path, and its right to development must not be challenged,” Xie Feng wrote.

For Xi, a key source of that confidence has been China’s ability to diversify trade away from the US market and build out its technological self-sufficiency – two mandates sharpened by pressures on China from the first Trump administration.

Beijing has funneled vast financing and political will toward building its own technology in cutting-edge sectors – like robotics, AI, biotech, space, new energy and chips – and applying that tech into industry.

The fruits of that growth, however, are not spread evenly. Youth unemployment hit a recent high last month. Hundreds of millions of workers rely on the gig economy, such as delivering food or driving ride-share cars for their primary work. Consumption lags, local governments struggle under debt and a huge property sector crisis rumbles on.

People from all walks of life in China will readily tell you that the economy is just not doing as good as it used to be. But alongside this, there is often a sense of pride that the country has been able to rise as a tech power, even in the face of US-imposed restrictions.

Look no further than the case of Huawei, the Chinese tech giant blacklisted by the first Trump administration. In recent days Chinese tech vloggers have been gleefully posting videos about Apple’s much-hyped release of its first foldable phone. They point out that Huawei’s own foldable model came out seven years ago.

Days ahead of Xi’s visit to the US, Huawei also announced that its next generation of Ascend AI chips would be released ahead of schedule next year, signaling progress in what has been a crucial bottleneck for China in AI development.

“We cannot accept a destiny where we cannot control our fate being determined by others in terms of willingness to sell chips to China or not,” Huawei rotating chairman Eric Xu said earlier this month.

And while the American public is largely pessimistic about the development of AI, their peers in China are more focused on how it might impact their day-to-day lives. Job displacement is a concern, but there’s also a sense there is an opportunity to be seized – and that the ruling Communist Party, with its tight control over society, won’t let the technology spin out of control.

Xi is heading to the US in the middle of an explosion of conversation about the risks of AI, including from Chinese models. Trump has said the country can’t slow development for safety, because it must focus on beating China.

That puts the spotlight on a key aim from Xi and his delegation: to dissuade the US from more tech restrictions that further could limit Chinese firms’ access to American technology or markets.

China wants to see “greater predictability in the economic and technology relationship” and a “stronger political commitment to prevent sensitive issues — especially Taiwan and technology restrictions — from destabilizing the overall relationship,” according to Sun Chenghao, a senior fellow at Tsinghua University’s Center for International Security and Strategy in Beijing.

But this is also where the shifting balance of power between China and the US comes in.

Both sides know that new restrictions – if seen by Beijing as too aggressive – could reignite the conflict that led their economies to the brink of full decoupling last year.

The truce that ended that round of their trade war was reached only after Beijing threatened a massive expansion of export controls on strategically critical rare earths, in response to a US move that would have vastly expanded the number of blacklisted Chinese firms.

That truce will likely be extended this week – and both sides will be wary of pushing the other too far in a situation where “nobody wins, because it’s equally matched,” according to Kurt Tong, managing partner at The Asia Group advisory firm.

“In the economic space, there isn’t really any superior player … because of the equally matched leverage aspects, the two sides are pulling back from actions that cost them to execute,” said Tong, who formerly served as the US consul general of Hong Kong.

Now, Trump “looks at Xi Jinping and sees a counterpart as opposed to someone to wrestle into submission,” he said.

China is now seen more positively than the US in most of 36 countries surveyed in a new Pew Research poll published in July. Xi even edged out Trump in winning people’s confidence, the pollsters found.

These changes come not just alongside a shake-up of the role of the US on the global stage, but a shift in China’s ability to wield soft power. People around the world are using Chinese AI models for their businesses and driving Chinese EVs. Viral cultural exports like the Labubu plushy and Chinese dramas, as well as the online Chinamaxxing trend have driven interest and tourism in China.

Xi has spent recent weeks on a rare series of overseas diplomatic junkets, sharing his own pitch for China’s leadership and worldview. At a summit of the BRICS group of emerging economies in New Delhi earlier this month, he pledged to help member states set up smart factories and develop AI models. During a state visit to Egypt earlier this month, Xi laid out proposals for a “new security architecture” in the Middle East – one that won’t be reliant on the US security umbrella. A host of leaders have also beat a path to Beijing’s door this year.

The White House, meanwhile, in recent weeks has looked to point blame for the ongoing war it began in Iran on countries that continue to do business with its government, pledging to force them to stop or face major sanctions. As Iran’s biggest trade partner, China is at the top of that list.

But here too is also an example of how China’s growing stature – and leverage – may come to bear in the upcoming talks.

Chinese Foreign Minister Wang Yi met his Iranian counterpart Abbas Araghchi in Beijing last week. The talks in part were meant to “clarify some issues, so that in Washington, the two leaders can have more substantive discussion on this issue,” according to Wu, the policy advisor. That gives Beijing runway to signal that any move to censure its companies will see Washington lose any chance to benefit from China’s ability to speak to both sides.

“China will tell the US two things,” Wu said. “One is – do not try to sanction Chinese banks or companies for doing business with Iran … secondly, forget about military solutions or economic sanctions (to end the conflict), you have to sit down to negotiate for a reasonable peace agreement.”