Scott Kennedy lays out how China’s leaders are approaching the upcoming Trump-Xi summit, and why China feels remarkably more confident compared to the first such summit in 2017.
The confidence is not rhetorical. It is built on measurable developments across five specific dimensions that have all moved in China’s favour since 2017 — and particularly since the Iran war began on February 28, 2026.
Dimension One: Economic Resilience
In the first two months of 2026, China’s exports grew by 21.8% year-on-year, reflecting a reorientation toward non-US markets that has helped cushion the impact of declining trade with the United States. Moreover, a number of recent geopolitical shocks have impacted US-China relations.
21.8% export growth despite US tariffs above 100% — because China found new markets in Southeast Asia, the Middle East, Africa and Latin America. The tariff war that was supposed to hurt China has hurt China’s exports to America while accelerating China’s diversification away from US dependency. Beijing enters the summit with an economy that has proven more resilient than Washington assumed.
Dimension Two: Rare Earth Leverage
Xi successfully beat back Trump’s unprecedented trade escalation, which pushed tariffs past 140 percent, by wielding China’s “break glass” tool of rare earth minerals and magnets. When Xi threatened to restrict those flows in April and October 2025, Trump folded rather than credibly threaten escalation.
Twice. Trump folded twice when China threatened rare earth restrictions. That precedent means Xi enters the summit with a credible deterrent that has proven effective — China’s critical mineral leverage is not a threat that Washington has a short-term answer to.
Dimension Three: Energy Buffers
Although China has had the largest volume of trade of any country disrupted by the blockade of the Strait of Hormuz, it has also built the strongest buffers against the energy shock by stockpiling reserves and diversifying imports. At the same time, China’s electrification moderates its oil and LNG consumption.
The Hormuz crisis is disrupting China’s oil supply — but China prepared for it. Strategic petroleum reserves, increased Russian pipeline gas, accelerated EV adoption reducing oil demand — all these mean China is experiencing the Hormuz shock as a manageable inconvenience rather than the economic emergency it represents for Japan, South Korea, and Europe.
Dimension Four: Iran War Positioning
The recent Beijing visit by Iranian Foreign Minister Abbas Araghchi shows China positioning itself as having already weighed in with Iran to reopen the Strait of Hormuz.
China’s positioning as the indispensable Iran mediator is the most valuable leverage dimension for the summit. Washington needs Beijing to move Tehran. Beijing has the relationship. That need gives China diplomatic credit that can be exchanged for the trade, technology, and Taiwan concessions Beijing has been seeking.
Dimension Five: Time
Xi has long told cadres that “the East is rising and the West is declining” and that “time and momentum” are on China’s side.
Trump needs a win on Iran before the midterms. Xi needs nothing urgently. The structural time asymmetry — an impatient superpower facing a domestic political deadline negotiating with a patient superpower that views the long term as its natural advantage — is the fundamental leverage differential that shapes everything at the summit.
