Xi-Trump Meeting in Busan

Full Chinese Readout of the Xi-Trump Busan Meeting & Quid Pro Quo, Analysis of Beijing's Strategic Messaging

Chinese President Xi met with Trump in South Korea. A trade truce continued. There’s no press conference after the meeting, I think both sides want to reduce the uncontrollable situations and topics. According to Xinhua’s picture, the Chinese side participants from left to right, including:

Ma Zhaoxu——Vice Minister of Foreign Affairs

He Lifeng——Vice Premier, who’s focusing on trade talks with the US

Cai Qi——CPC Secretary of the Secretariat

Xi Jinping—— President

Wang Yi—— Chinese top diplomat

Zheng Shanjie——Chair of the National Development and Reform Commission (NDRC)

Wang Wentao—— Minister of Commerce

What’s the quid pro quo?

In today’s Commerce Ministry’s press conference

I. The U.S. side will cancel the additional 10% so-called “fentanyl tariffs” imposed on Chinese goods (including goods from the Hong Kong Special Administrative Region and Macao Special Administrative Region). The additional 24% reciprocal tariffs on Chinese goods (including goods from the Hong Kong Special Administrative Region and Macao Special Administrative Region) will continue to be suspended for one year. The Chinese side will adjust its countermeasures against the aforementioned U.S. tariffs accordingly. Both sides agree to continue extending certain tariff exclusion measures.

II. The U.S. side will suspend implementation of the 50% penetration rule for export controls announced on September 29 for one year. The Chinese side will suspend implementation of relevant export control measures announced on October 9 for one year and will study and refine specific plans.

III. The U.S. side will suspend implementation of its Section 301 investigation measures against China’s maritime, logistics, and shipbuilding industries for one year. After the U.S. side suspends implementation of relevant measures, the Chinese side will also suspend implementation of countermeasures against the U.S. side for one year accordingly.

In addition, both sides reached a consensus on issues including fentanyl anti-drug cooperation, expanding agricultural product trade, and handling individual cases involving relevant enterprises. Both sides further confirmed the outcomes of the Madrid economic and trade consultations. The U.S. side made positive commitments in areas such as investment, and the Chinese side will properly resolve TikTok-related issues with the U.S. side.

I’d say this feels more like a mid-term ceasefire than permanent. Despite Chinese Vice Commerce Minister Li Chenggang declaring that China doesn’t want to see “turbulence and twists,” Trump’s cabinet members are unlikely to shift their current stance. Any further sanctions on China can break the fragile trust(if they still have it) and would almost certainly be met with equal-level retaliation.

In the short term, before Trump’s visit to China and Xi’s visit to the US, bilateral relations may see a relatively stable window period.

I also want to highlight a new tifa提法 from Chinese top diplomat Wang Yi’s phone call with Rubio on Oct.27:

习近平主席和特朗普总统都是世界级领袖，长期交往、彼此尊重，这已成为中美关系最宝贵的战略资产。

President Xi Jinping and President Donald J. Trump are both global leaders. Their long-term interactions and mutual respect have become the most valuable strategic asset in China-U.S.

The last time we saw a similar expression was to describe trade relations, once characterized as a “ballast” for stabilizing ties. The importance of personal communication between top leaders is strengthening, not weakening.

Some takes from the Chinese side readout:

近平强调，中国经济发展势头不错，今年前三季度增长率达5.2%，对全球的货物贸易进出口增长4%，这是克服内外困难实现的，来之不易。中国经济是一片大海，规模、韧性、潜力都比较大，我们有信心也有能力应对各种风险挑战。

Xi Jinping emphasized that China’s economic development momentum is strong. In the first three quarters of this year, the growth rate reached 5.2%, and imports and exports of goods to the world increased by 4%. This was achieved despite overcoming internal and external difficulties, and is hard-won. China’s economy is a vast ocean with considerable scale, resilience, and potential. We have both the confidence and capability to respond to various risks and challenges.

This sounds to me less like an explanation and more like a signal to the US: China isn’t seeking confrontation but is focused on its own development. The underlying message is clear—don’t expect a faltering Chinese economy. At the same time, it’s also trying to project an image of “stability”, “openness”, and “predictability", messaging to global investors looking for reassurance about China’s economic trajectory.

两国在打击非法移民和电信诈骗、反洗钱、人工智能、应对传染疾病等领域合作前景良好，对口部门应该加强对话交流，开展互利合作。中美在地区和国际舞台也应该良性互动。当今世界还有很多难题，中国和美国可以共同展现大国担当

The two countries have good prospects for cooperation in combating illegal immigration and telecommunications fraud, anti-money laundering, artificial intelligence, and responding to infectious diseases. Counterpart departments should strengthen dialogue and exchanges and carry out mutually beneficial cooperation. China and the United States should also interact positively on the regional and international stage. There are still many difficult problems in today’s world. China and the United States can jointly demonstrate the responsibility of major countries and work together to accomplish more major, practical, and beneficial things for both countries and the world.

I think this indicates that China does not want to debate right and wrong, nor does it keep illusions about the relationship returning to a honeymoon period. Rather, it seeks to reduce hostility while returning to functional cooperation on a “problem list” in areas where there is mutual need. In a sense, this mode can leave some room for risk management in the AI field.

Below is the full transcript of the Chinese readout:

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Xi Jinping Meets with U.S. President Trump in Busan

On October 30, local time, President Xi Jinping met with U.S. President Trump in Busan.

Xi Jinping noted that under their joint leadership, China-U.S. relations have maintained overall stability. The two countries being partners and friends is both a lesson from history and a necessity of reality. Given the different national conditions of the two countries, some disagreements are inevitable, and as the world’s two largest economies, there are occasional frictions, which is normal. In the face of storms and challenges, the two heads of state, as helmsmen, should grasp the direction and manage the overall situation, ensuring that the great ship of China-U.S. relations moves forward steadily. I am willing to continue working with President Trump to lay a solid foundation for China-U.S. relations and create a favorable environment for the respective development of both countries.

Xi Jinping emphasized that China’s economic development momentum is strong. In the first three quarters of this year, the growth rate reached 5.2%, and imports and exports of goods to the world increased by 4%. This was achieved despite overcoming internal and external difficulties, and is hard-won. China’s economy is a vast ocean with considerable scale, resilience, and potential. We have both the confidence and capability to respond to various risks and challenges. The Fourth Plenum of the 20th CPC Central Committee reviewed and adopted suggestions for the national economic and social development plan for the next five years. Over the past 70-plus years, we have adhered to one blueprint drawn to the end, with successive generations working continuously. We have never thought of challenging or replacing anyone, but rather have focused our energy on doing our own things well, becoming a better version of ourselves, and sharing development opportunities with countries around the world. This is an important code to China’s success. China will further comprehensively deepen reform and expand opening-up, striving to promote effective qualitative improvement and reasonable quantitative growth of the economy, advancing people’s all-round development and common prosperity for all, which I believe will also open up broader space for China-U.S. cooperation.

Xi Jinping pointed out that the economic and trade teams of both countries have conducted in-depth exchanges on important economic and trade issues and reached consensus on resolving problems. The teams of both sides should refine and finalize follow-up work as soon as possible, maintain and implement the consensus well, and provide reassurance to both China and the United States and the world economy with concrete results. China-U.S. economic and trade relations have experienced twists and turns recently, which has also brought some insights to both sides. Economic and trade relations should continue to serve as the ballast and propeller of China-U.S. relations, rather than a stumbling block and point of conflict. Both sides should look at the big picture and focus more on the long-term benefits brought by cooperation, rather than falling into a vicious cycle of mutual retaliation. The teams of both sides can continue to negotiate based on the principles of equality, respect, and mutual benefit, constantly compressing the problem list and lengthening the cooperation list.

Xi Jinping stressed that dialogue is better than confrontation. All channels and levels between China and the United States should maintain communication and enhance understanding. The two countries have good prospects for cooperation in combating illegal immigration and telecommunications fraud, anti-money laundering, artificial intelligence, and responding to infectious diseases. Counterpart departments should strengthen dialogue and exchanges and carry out mutually beneficial cooperation. China and the United States should also interact positively on the regional and international stage. There are still many difficult problems in today’s world. China and the United States can jointly demonstrate the responsibility of major countries and work together to accomplish more major, practical, and beneficial things for both countries and the world. Next year, China will host APEC, and the United States will host the G20 Summit. Both sides can support each other and strive for positive outcomes from both summits, contributing to promoting world economic growth and improving global economic governance.

Trump expressed that it was an honor to meet with President Xi Jinping. China is a great country, and President Xi is a respected great leader and also a good friend of mine for many years. We get along very well. U.S.-China relations have always been good and will be even better in the future. I hope the future will be even better for both China and the United States. China is America’s greatest partner, and together our two countries can accomplish many great things in the world. Future U.S.-China cooperation will achieve even greater accomplishments. China will host the 2026 APEC Leaders’ Informal Meeting, and the United States will host the G20 Summit. I look forward to success for both sides.

The two heads of state agreed to strengthen bilateral cooperation in economic and trade, energy and other fields, and promote people-to-people exchanges.

The two heads of state agreed to maintain regular contact. Trump looks forward to visiting China early next year and invited President Xi to visit the United States.

Cai Qi, Wang Yi, He Lifeng and others attended the meeting.

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Commerce Ministry Spokesperson Answers Reporter’s Questions on the China-U.S. Kuala Lumpur Economic and Trade Consultations Joint Arrangement

Question: It is understood that China and the United States reached a joint arrangement on resolving economic and trade issues of mutual concern during the Kuala Lumpur economic and trade consultations. Can the Ministry of Commerce provide more details about the consensus reached at the Kuala Lumpur economic and trade consultations?

Answer: The heads of state of China and the United States just held a meeting in Busan, South Korea, where they had in-depth discussions on China-U.S. economic and trade relations and other issues, and agreed to strengthen cooperation in economic and trade and other fields. China is willing to work with the United States to jointly maintain and implement the important consensus reached at the meeting between the two heads of state.

Through the Kuala Lumpur consultations, the China-U.S. economic and trade teams reached consensus on outcomes in the following main areas:

I. The U.S. side will cancel the additional 10% so-called “fentanyl tariffs” imposed on Chinese goods (including goods from the Hong Kong Special Administrative Region and Macao Special Administrative Region). The additional 24% reciprocal tariffs on Chinese goods (including goods from the Hong Kong Special Administrative Region and Macao Special Administrative Region) will continue to be suspended for one year. The Chinese side will adjust its countermeasures against the aforementioned U.S. tariffs accordingly. Both sides agree to continue extending certain tariff exclusion measures.

II. The U.S. side will suspend implementation of the 50% penetration rule for export controls announced on September 29 for one year. The Chinese side will suspend implementation of relevant export control measures announced on October 9 for one year and will study and refine specific plans.

III. The U.S. side will suspend implementation of its Section 301 investigation measures against China’s maritime, logistics, and shipbuilding industries for one year. After the U.S. side suspends implementation of relevant measures, the Chinese side will also suspend implementation of countermeasures against the U.S. side for one year accordingly.

In addition, both sides reached consensus on issues including fentanyl anti-drug cooperation, expanding agricultural product trade, and handling individual cases involving relevant enterprises. Both sides further confirmed the outcomes of the Madrid economic and trade consultations. The U.S. side made positive commitments in areas such as investment, and the Chinese side will properly resolve TikTok-related issues with the U.S. side.

The Kuala Lumpur economic and trade consultations between China and the United States achieved positive results, fully demonstrating that when both sides uphold the spirit of equality, respect, and mutual benefit and engage in dialogue and cooperation, they can find ways to solve problems. The economic and trade consultation results are hard-won. China looks forward to working with the United States to implement them well, injecting more certainty and stability into China-U.S. economic and trade cooperation and the world economy.