Russia Pushes for Gas Pipeline Deal with China Amid Strategic Energy Shift

Economic

Commodity

Summary:

As President Xi Jinping visits Moscow, Russia accelerates negotiations on the 2,600 km Power of Siberia 2 gas pipeline project, though disagreements over pricing and volume continue to stall a final agreement....

Pipeline Diplomacy in Focus During Xi’s Moscow Visit

In a symbolic and strategically charged moment, Chinese President Xi Jinping’s state visit to Moscow has coincided with intensified talks between Russia and China over the ambitious Power of Siberia 2 gas pipeline. The project, designed to transport Russian natural gas from Siberia’s vast western fields to northern China via Mongolia, has been a long-standing Russian priority—especially since the rupture of its energy ties with Europe following the Ukraine conflict.

Russian Energy Minister Sergei Tsivilev confirmed that while negotiations are progressing actively, a formal contract is unlikely to be finalized before May 9. His comments, reported by state-run TASS, underscore the complexity and urgency of the deal as Moscow looks to re-anchor its energy exports toward the East.

China Holds the Advantage in Energy Talks

Beijing's leverage in the talks is clear. Now Russia’s largest gas customer and a key trade partner across multiple sectors, China is in no rush to close the deal. The collapse of Russia’s gas exports to Europe—once its primary energy customer—has put Moscow in a position of relative dependency. While eager to redirect supply, Russia faces mounting challenges convincing China to commit to pricing and volume terms that justify the scale of the Power of Siberia 2 investment.

Despite Russian reassurances, Beijing has not yet committed to specific purchase volumes or pricing, maintaining a cautious stance amid broader concerns over demand fluctuation, energy diversification, and market competition from LNG sources.

Technical and Strategic Hurdles Remain

The proposed 2,600 km pipeline would run from Russia’s Yamal gas fields through Mongolia into China’s industrial heartland. It is envisioned as a complementary project to the existing Power of Siberia 1 line, which became operational in 2019 but sources gas from eastern Russia. The second pipeline would open new export routes from western deposits, reshaping Russia’s export geography.

However, the ambitious scale of the project comes with technical, financial, and geopolitical complexities. Tsivilev noted that companies on both sides are working to draft contract frameworks, particularly around the Mongolian transit route, but these efforts require time and negotiation finesse, particularly as both sides weigh long-term strategic implications.

Geopolitical Backdrop: A Calculated Partnership

Xi’s visit to Moscow—during which he will meet President Vladimir Putin and attend Russia’s 80th anniversary Victory Day parade—marks a continuation of the deepening Sino-Russian political alignment. Xi is accompanied by leaders from nations maintaining ties with Russia post-Ukraine, signaling diplomatic solidarity.

Nevertheless, while the optics are strong, energy agreements remain transactional. China’s careful maneuvering reflects a broader pattern: strategic alignment without unconditional commitment. The gas pipeline talks exemplify this—China remains open to cooperation but insists on favorable terms.

The Power of Siberia 2 pipeline stands at the crossroads of geopolitical realignment and economic pragmatism. For Russia, it represents both an escape from European dependence and a lifeline for its gas sector. For China, it offers energy diversification and leverage. But the path to agreement remains obstructed by unresolved pricing issues and cautious diplomacy. As May 9 approaches, both sides may reaffirm strategic intent, but a binding deal appears still out of reach—pending further concessions or a shift in negotiation dynamics.

Source: OilPrice

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Glendon

Political

India and Pakistan accused each other of launching new military attacks on Friday, using drones and artillery for the third day in the worst fighting between the nuclear-armed South Asian neighbours in nearly three decades.

The old enemies have been clashing since India struck multiple locations in Pakistan on Wednesday that it said were "terrorist camps", in retaliation for a deadly attack on Hindu tourists in Indian Kashmir last month.

Pakistan denied it was involved in the attack but both countries have exchanged cross-border fire and shelling and sent drones and missiles into each other's airspace since then, with about four dozen people dying in the violence.

Villagers have fled border areas in both countries and many cities have been hit with blackouts, air raid warnings and panic buying of essentials. India has suspended its prestigious Indian Premier League T20 cricket tournament after one match was stopped midway on Thursday and the floodlights switched off.

The fighting is the deadliest since a limited conflict between the two countries in Kashmir's Kargil region in 1999. India has targeted cities in Pakistan's mainland provinces outside Pakistani Kashmir for the first since their full-scale war in 1971.

The Indian army said on Friday that Pakistani troops had resorted to "numerous cease fire violations" along the countries' de-facto border in Kashmir, a region that is divided between them but claimed in full by both.

"The drone attacks were effectively repulsed and befitting reply was given to the CFVs (ceasefire violations)," the army said, adding all "nefarious designs" would be responded to with "force".

Pakistan Information Minister Attaullah Tarar said the Indian army statement was "baseless and misleading", and that Pakistan had not undertaken any "offensive actions" targeting areas within Indian Kashmir or beyond the country's border.

In Pakistani Kashmir, officials said heavy shelling from across the border killed five civilians, including an infant, and injured 29 in the early hours of Friday.

India's defence ministry did not immediately respond to a request for comment.

SIRENS IN AMRITSAR

A "major infiltration bid" was "foiled" in Kashmir's Samba region on Thursday night, India's Border Security Force said, and heavy artillery shelling persisted in the Uri area on Friday, according to a security official who did not want to be named.

"Several houses caught fire and were damaged in the shelling in the Uri sector...one woman was killed and three people were injured in overnight shelling," the official said.

Sirens blared for more than two hours on Friday in India's border city of Amritsar, which houses the Golden Temple revered by Sikhs, and residents were asked to remain indoors.

Hotels reported a sharp fall in occupancy as tourists fled the city by road since the airport was closed.

"We really wanted to stay but the loud sounds, sirens, and blackouts are giving us sleepless nights. Our families back home are worried for us so we have booked a cab and are leaving," said a British national who did not want to be named.

Other border areas also took precautionary measures on Friday, including Bhuj in Gujarat, where authorities said tourist buses had been kept on standby to evacuate residents near the Pakistan border.

Schools and coaching centres were closed in the Bikaner region of India's desert state of Rajasthan, and residents near the Pakistan border said they were asked to move further away and consider moving in with relatives or using accommodation arranged by the government.

India's Directorate General of Shipping directed all ports, terminals and shipyards to increase security, amid "growing concerns regarding potential threats".

Ansab, a student at the Sher-e-Kashmir University of Agriculture, Science and Technology in India's Jammu city, which was among the places where blasts were heard overnight, said the explosions were "more violent and louder" around 4 a.m. (2230 GMT Thursday).

"For two to three minutes it became very loud, windows started shaking as if they will break," she said, adding the air was "smoggy" later - a mixture of smoke and fog.

World powers from the U.S. to China have urged the two countries to calm tensions, and U.S. Vice President JD Vance on Thursday reiterated the call for de-escalation.

"We want this thing to de-escalate as quickly as possible. We can't control these countries, though," he said in an interview on Fox News show "The Story with Martha MacCallum."

The Saudi minister of state for foreign affairs Adel Al-Jubeir is also scheduled to visit Pakistan on Friday, a senior Pakistani official said.

Al-Jubeir was in India on Thursday and met Indian Foreign Minister Subrahmanyam Jaishankar, who said he "shared India’s perspectives on firmly countering terrorism" with him.

Pakistani Defence Minister Khawaja Muhammad Asif told parliament that Islamabad is "speaking daily" to Saudi Arabia, Qatar and China about de-escalating the crisis.

The relationship between Hindu-majority India and Islamic Pakistan has been fraught with tension since they became separate countries after attaining independence from colonial British rule in 1947.

Kashmir, a Muslim-majority region, has been at the heart of the hostility and they have fought two of their three wars over the region.

Source: Reuters

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Gerik

Economic

China–U.S. Trade War

Export Growth Defies Expectations Despite U.S. Collapse

In a surprising reversal of expectations, China’s exports in April soared 8.1% year-on-year in U.S. dollar terms, sharply beating Reuters’ forecast of just 1.9%. This impressive growth occurred in the face of an escalating trade war with the U.S., where outbound shipments plunged more than 21%, and imports from America fell nearly 14%.

The divergence between overall export growth and the sharp decline in U.S.-bound trade highlights a new dynamic: China is increasingly leaning on regional partners—particularly in Southeast Asia—to cushion the blow of lost access to the American market.

Southeast Asia Becomes Key Buffer Zone

China’s exports to ASEAN countries surged 20.8% year-on-year in April, up from 11.6% in March. Within the bloc, Indonesia and Thailand posted standout gains of 37% and 28%, respectively, in imports of Chinese goods. Vietnam and Malaysia continued to be major trade partners, suggesting a deepening of intra-Asian trade integration amid geopolitical tensions.

This rapid redirection reflects both proactive trade policy shifts and possible transshipment strategies. Analysts, such as Zhiwei Zhang of Pinpoint Asset Management, noted that some of the export gains may stem from contracts signed before tariff escalation or goods being rerouted through third-party countries to bypass trade restrictions.

Tariffs Bite as Trade with U.S. Recedes Sharply

The collapse in U.S.-China trade volumes was driven by the Trump administration’s imposition of 145% tariffs on Chinese imports, matched by Beijing’s 125% retaliation. These historically high levies effectively froze direct trade lanes, with container traffic between the two countries dropping significantly by late April, according to ANZ’s chief economist Raymond Yeung.

In March, Chinese exporters had briefly frontloaded shipments ahead of the tariff spike, pushing U.S.-bound exports up 9.1% temporarily. But that surge proved short-lived, with April marking the steepest year-on-year drop since the trade war began. Imports followed suit, reflecting diminished bilateral demand and the chilling effect of policy uncertainty.

Domestic Pain Surfaces as Economic Risks Deepen

Despite headline export growth, underlying indicators signal mounting distress in China’s export-driven economy. Factory activity sank to a 16-month low in April, with new export orders hitting their weakest level since December 2022. The broader purchasing managers’ index also indicated falling employment, as manufacturers began suspending operations and placing workers on leave.

Goldman Sachs now estimates that as many as 16 million Chinese jobs—roughly 2% of the national labor force—are at risk, primarily in sectors reliant on U.S. demand. Local governments and businesses are being urged to redirect unsold goods into the domestic market, a move that could exacerbate deflationary pressures.

Macroeconomic Indicators Point Toward Deflation

China is expected to post further evidence of deflation when consumer and wholesale price data are released. The CPI is forecast to fall 0.1% and the PPI by 2.8%, continuing a trend of declining prices driven by weakening demand and excess supply.

To counteract these pressures, Chinese authorities have introduced new monetary easing and support packages for affected exporters. Still, investor confidence remains fragile. The CSI 300 fell 0.23% on Friday, and the offshore yuan stayed largely flat at 7.2483 per U.S. dollar, indicating limited optimism despite the strong export figures.

U.S.-China Talks: A Chance for De-escalation or Just Optics?

Markets are now watching closely as U.S. and Chinese officials prepare for high-level talks in Switzerland—the first since the latest tariff round. While analysts expect no immediate breakthrough, even a partial rollback of tariffs could provide relief.

Morgan Stanley forecasts that U.S. tariffs on Chinese goods could ease from the current 145% average to around 45% by the end of 2025, though it warns that the path will be turbulent and politically fraught. Laura Wang, the firm’s equity strategist, described the potential for tariff de-escalation as a “major positive” for Chinese equities but cautioned that no durable agreement is yet in sight.

April’s strong export figures offered a glimmer of resilience in China’s trade position, driven largely by increased integration with Southeast Asia and the EU. However, the sharp decline in trade with the U.S., coupled with rising domestic stress and looming deflation, underscores the fragility of this recovery. As negotiations resume, the potential for policy relief remains—but without structural shifts in global supply chains or a clear diplomatic thaw, China’s export engine remains on uneven ground.

Source: CNBC

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Gerik

Economic

Stocks

Legal Reforms Trigger a Strategic Inflection Point

Beginning May 19, 2025, Vietnam's Decree 69/2025/NĐ-CP officially takes effect, alongside the recently activated Circular 18/2025/TT-BTC. These regulatory changes redefine the landscape for foreign capital in the banking sector, unlocking mechanisms for equity inflows previously constrained by strict ownership limits and technical hurdles. The reforms signal a transition from incremental adjustments to structural transformation, as Vietnam moves to align with global investment norms.

As of April 2025, data from the Vietnam Securities Depository and Clearing Corporation (VSDC) shows that 13 out of 27 publicly listed banks have foreign ownership above 15%, with several nearing the previous 30% ceiling—ACB at 29.97%, MSB at 27.28%, and VietinBank at 26.76%. These banks typically offer high profitability, transparent governance, and expansive customer bases—features that appeal to long-term institutional investors.

The planned lift to a 49% foreign ownership cap at strategic institutions—especially those undergoing forced transfers—has the potential to reshape capital flows. While some banks like VIB and Eximbank have proactively capped foreign room to reserve space for future strategic investors, others are now reevaluating their shareholder structures following the withdrawal of players such as Commonwealth Bank of Australia and Dragon Capital. The shift signals not a retreat but a repositioning ahead of a selective M&A wave.

Forced Transfers Reshape Ownership and Investment Strategy

Decree 69 introduces a critical clause (6a to Article 7), permitting foreign investors to own up to 49% of banks undergoing mandatory restructuring—provided they are not majority state-owned. MBBank (MBV), VPBank (GPBank), and HDBank (Vikki Bank) are the first to utilize this channel.

MBV’s transformation into a single-member LLC structure opens the door to full foreign ownership. VPBank’s ambitious turnaround plan for GPBank—once a chronic loss-maker—targets VND 500 billion in profit this year alone. Meanwhile, HDBank’s Vikki Bank is focused on SMEs and retail clients using an integrated tech ecosystem to achieve early profitability. These cases show how the restructuring mechanism has become a gateway for foreign entry into previously closed institutions.

Digital Banking Emerges as a Golden Pathway to Full Ownership

Vietnam’s regulatory framework does not cap foreign ownership in digital banks established under a single-member LLC model. This loophole effectively allows 100% foreign ownership without new licensing. Since no fully foreign-owned bank licenses have been granted since 2017, this provides a rare and legal workaround. New-generation digital banks like MBV, Vikki Bank, and VCBNeo are the vanguard of this trend.

These banks benefit from lean operational models, minimal legacy debt, and the ability to use behavioral data and AI to drive credit decision-making. Their appeal lies in offering strategic foreign investors immediate market access, reduced regulatory friction, and scalable digital platforms tailored for rapid growth.

KRX Clearing System: Technical Reform Unlocks Capital Efficiency

Circular 18/2025 also introduces the KRX clearing mechanism, allowing institutional investors to execute trades without pre-funding orders, provided settlement is completed by 10:15 a.m. on T+2. Under this framework, foreign investors retain ownership until T+3, even in case of temporary payment shortfalls, assuming settlement confirmation is provided. Previously, unsettled trades would revert to proprietary accounts, risking ownership loss due to room limits.

With the integration of CCP (Central Counterparty Clearing), Vietnam now aligns its post-trade infrastructure with global standards. This is particularly impactful for high-capitalization sectors like banking, where foreign investor appetite is strongest. According to SSI and VDSC, full utilization of foreign room in the three banks under restructuring could attract USD 1–1.5 billion in net foreign capital in H2 2025 alone.

Strategic Shareholder Restructuring Marks a New Capital Cycle

Recent divestments by major funds—such as CBA’s exit from VIB and Norges Bank’s trimming of Sacombank—signal not a withdrawal, but a recalibration toward more focused, longer-term holdings. Banks like Techcombank and MB are now selectively courting partners with financial muscle and alignment on governance and digital transformation.

Chairman Ho Hung Anh of Techcombank stated that equity issuance will proceed only with “truly high-quality” partners. This signals a shift toward a new M&A phase where foreign ownership becomes not just a funding tool, but a mechanism for corporate governance enhancement, operational synergy, and resilience building in a volatile global environment.

Vietnam’s banking sector is on the cusp of a transformative M&A wave, fueled by synchronized regulatory reform, institutional capital readiness, and strategic digital banking models. The convergence of expanded foreign room, streamlined trading infrastructure, and targeted restructuring has laid the groundwork for a deep revaluation of bank equities. Institutions that manage their foreign room strategically, embrace digital innovation, and cultivate strong, aligned partners will be best positioned to lead in Vietnam’s next financial growth cycle.

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Catherine Richards

Central Bank

The European Central Bank should cut its interest rate next month if its new forecasts confirm an outlook of disinflation and waning growth momentum, according to Governing Council member Olli Rehn.

Speaking in Helsinki on Friday, the Finnish central bank governor signaled his openness to an eighth reduction at a time when US tariffs are presenting policymakers with “exceptional uncertainty.”

“Against this background of disinflation on track and growth having weakened, in case this is going to be confirmed in our June forecast, then in my view in order to achieve our 2% symmetric inflation target over the medium term, the right reaction in monetary policy is to cut rates,” Rehn said.

While markets are betting on two to three additional reductions in borrowing costs this year, policymakers have been more hesitant to commit. Before specifying his view on the outlook, Rehn reiterated the ECB's stance that the “Governing Council is maintaining full freedom of action in monetary policy,” and he went on to insist that nothing is set in stone.

“We are data dependent and we take decisions at each meeting,” he said. “I don't say anything more at this stage because I want to see the data and the roadmap economic projection exercise of June first before taking any decisions.”

In March, the ECB projected 0.9% growth this year, followed by 1.2% and 1.3% in 2026 and 2027. In April, Chief Economist Philip Lane told Bloomberg that trade tensions had darkened the outlook, but that it's “important to say it is a markdown to a little bit less” as the economy is still growing.

Since then, the economy showed unexpected resilience with a first quarter growth outcome of 0.4% — double the previous period's gain. A revised estimate will be released next week.

Earlier on Friday, Rehn described the difficulty for ECB officials in forecasting and setting policy during testing times.

“Recent data has shown signs of recovery in the euro area, but the outlook remains clouded by exceptional uncertainty due to President Trump's trade war,” he said. “We will adjust our rates to bring inflation to 2% in the medium term — just as our strategy tells us to do.”

Source: Bloomberg Europe

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Gerik

Economic

Stocks

Wall Street Cheers, But London Stays Cautious

While U.S. markets surged on news of a preliminary trade deal between the United States and the United Kingdom, the response in London was notably cooler. The FTSE 100, the benchmark index for British equities, closed lower, diverging from gains across the S&P 500, Dow Jones, and Nasdaq. This divergence highlights a fundamental split in how the deal was interpreted on each side of the Atlantic.

In the U.S., investors celebrated the political symbolism of the first finalized trade deal under President Trump’s new round of tariff policies. However, in London, market participants appeared less convinced that the agreement would translate into tangible economic benefits for Britain.

The Substance Behind the Announcement: More Flash Than Function?

According to preliminary details released by the White House, the U.S. will maintain a blanket 10% tariff on U.K. imports. Although the U.K. secured concessions such as reduced tariffs on its first 100,000 exported vehicles and a discussion on Trump's 25% levies on steel and aluminum, the overall structure heavily favors American interests. Crucially, the 10% rate announced on April 2 remains unchanged, offering little relief to most British exporters.

The deal, so far, appears more symbolic than economically transformative. As Andy Abbott, CEO of Atlantic Container Line, put it: “What we heard today is just noise for most U.K. imports. It doesn’t affect the majority of products.” In other words, the deal lacks the breadth and depth needed to meaningfully boost British trade.

Trade Asymmetries Undermine Investor Confidence

One key reason for the market’s lukewarm reaction is the trade imbalance between the two nations. The U.S. already runs a surplus with the U.K., exporting more than it imports. The retention of U.S. tariffs only cements this asymmetry. Without reciprocal benefits or significant tariff reductions, U.K. firms remain exposed to U.S. protectionism with limited upside.

From an investor’s standpoint, that means continued pressure on key export industries, especially in manufacturing, autos, and metals. It also raises questions about Prime Minister Keir Starmer’s leverage in global trade negotiations and the broader economic outlook amid stagnant growth and persistent inflation risks.

Structural Concerns and Geopolitical Risks Weigh Heavily

Another factor dragging down U.K. market sentiment is the broader uncertainty tied to Trump’s global trade policy. The new U.S. tariff regime—framed as "reciprocal import duties" on all trading partners—was initially rolled out at high rates, then paused and revised to a baseline 10% for most countries. Though temporarily softened, these measures reflect a return to aggressive protectionism.

Major European retailers, including Puma, Pandora, and Hugo Boss, have already begun reevaluating pricing strategies and supply chains in anticipation of potential disruptions. Such uncertainty filters through to export-heavy economies like the U.K., which must now navigate an increasingly transactional and unpredictable U.S. trade environment.

A Temporary Lift or a Strategic Win? Diverging Outlooks

While U.S. equity markets responded positively to the announcement, some analysts, including CNBC Pro contributor Josh Brown, warned the boost might be temporary. Without signed documentation or a clear timeline, the agreement remains a policy outline rather than a binding commitment. As a result, investors are pricing in a short-term diplomatic thaw, not a structural shift in trade dynamics.

Meanwhile, the ongoing strength in Chinese exports—up 8.1% year-on-year in April despite a 21% drop in shipments to the U.S.—indicates that Washington’s trade policy may be failing to isolate Beijing while simultaneously alienating traditional allies like the U.K. That adds a layer of geopolitical friction to the already fragile global trade outlook.

The U.S.-U.K. trade deal, while politically significant, appears skewed in favor of Washington and lacking in material benefits for British industries. London’s cautious market reaction reflects deeper skepticism about the durability and fairness of the agreement, especially amid broader concerns about Trump’s tariff strategy and global economic uncertainty. Unless future negotiations yield more balanced terms, Britain may find that symbolism alone cannot offset structural disadvantages in its trade relationship with the U.S.

Source: CNBC

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Economic

China–U.S. Trade War

Mounting Pressure Forces a Shift in Beijing’s Strategy

After a month of escalating tariffs imposed by the Trump administration, Beijing's public response remained defiantly nationalistic, broadcasting anti-American rhetoric and invoking historical images of resistance. Yet beneath the surface, economic pressures and a shifting diplomatic landscape prompted a significant recalibration. Chinese officials, increasingly concerned about the tariffs' long-term damage and the risk of being sidelined in global trade negotiations, decided to send economic czar He Lifeng to Geneva for talks with the U.S.

This decision marked a critical turning point. Despite aggressive retaliatory tariffs and propaganda-driven resistance, China faced immediate pain from supply chain disruptions, factory closures, and job losses—particularly in vulnerable export sectors like textiles, furniture, and toys. These factors played a central role in Beijing’s reluctant but pragmatic return to the negotiating table.

Easing Rhetoric and Diplomatic Openings Enable Talks

The talks were preceded by subtle changes in tone from both Washington and Beijing. After weeks of inflammatory statements, U.S. officials reached out through multiple backchannels, signaling a willingness to engage. By late April, contacts at IMF and World Bank meetings—particularly those involving U.S. Treasury Secretary Scott Bessent—paved the way for formal discussions.

China responded by elevating its negotiating delegation, sending Vice Premier He Lifeng, a trusted ally of Xi Jinping and former architect of the 2019 “Phase One” trade deal. This choice satisfied U.S. demands for a senior-level counterpart without exposing Xi to potential embarrassment in case of hostile exchanges. However, Chinese sources emphasized that the Geneva session was classified internally not as full negotiations but as exploratory “pre-talks” to gauge Washington's intentions.

Trade War’s Economic Toll Becomes Unmanageable

China’s decision was driven not just by geopolitics, but by concrete economic fallout. Analysts slashed China’s 2025 growth forecasts, with Nomura predicting that the ongoing trade war could threaten up to 16 million jobs. Domestic signals—from strike activity to factory closures—painted a picture of escalating distress, particularly in export-reliant regions.

Compounding this was a fear of diplomatic exclusion. As key Asian economies like Vietnam, India, and Japan began pursuing trade deals with the U.S., China risked losing influence over global supply chains and investment flows. By delaying engagement, Beijing risked not only economic losses but also a deterioration in its geopolitical leverage.

Fentanyl Letter Sparks Diplomatic Tension

One major complication to the resumption of talks was a letter sent in late April from Washington to several Chinese ministries, outlining Trump’s demands for more visible and aggressive action on fentanyl precursor controls. The document included controversial suggestions such as front-page announcements in the Communist Party’s official newspaper and internal messaging through party channels. Chinese officials viewed this as overly intrusive, even “arrogant,” citing it as an attempt to dictate internal political procedures.

Nonetheless, fentanyl remains on the agenda in Geneva, with the U.S. planning to present the same four-point proposal during initial meetings. The issue adds a volatile element to already fraught negotiations, and Beijing's perception of interference in its governance may limit flexibility on other topics.

Internal Disarray on the U.S. Side Raises Questions

Ironically, while China made efforts to elevate its representation and manage risk, the American diplomatic front has experienced disruption. Key embassy officials with China expertise—particularly those from the previous Biden administration—were sidelined, including Deputy Chief of Mission Sarah Beran. The upcoming arrival of Trump’s new ambassador to China, David Perdue, may bring more cohesion, but the current vacuum has reduced the level of diplomatic preparation and internal consultation before the Geneva talks.

This disarray could hinder progress, especially in complex areas like intellectual property rights, de minimis exemptions, or technology exports, which are likely to emerge in later phases if talks proceed.

Modest Goals, Cautious Hopes for Geneva

Expectations remain deliberately low on both sides. Chinese officials emphasize that the Geneva meeting is not a venue for striking a grand bargain, but rather a fact-finding session to decode Washington’s often-contradictory messages. Still, Beijing may consider offering expanded purchases of American LNG and agricultural products—a playbook drawn from the 2019 trade deal—if early signals from the U.S. suggest a genuine interest in compromise.

Trump, for his part, continues pushing for direct leader-level engagement. However, Beijing has made clear that such a meeting would be premature and politically risky without prior substantive agreement. Any misstep could result in a loss of face for Xi Jinping, especially after Trump’s recent public chastisement of Ukrainian President Zelenskiy.

China’s re-engagement in trade talks reflects a tactical recalibration, not a retreat. While nationalist rhetoric continues at home, economic urgency and shifting global alignments have forced Beijing to re-enter dialogue with Washington. The Geneva meetings represent the first step in what may be a long, arduous process of rebuilding fragile economic ties under turbulent leadership and deep-seated mistrust. What happens next will hinge on both sides’ ability to move beyond performance politics and re-anchor negotiations in mutual interest and strategic foresight.