What to Expect When China's Xi Goes to Washington Next Month

Summary

Shehzad Qazi of China Beige Book said investors should keep expectations low for the September Xi-Trump summit, with the likely outcome limited to Board of Trade details rather than a major trade breakthrough. He argued the leaders' meetings mainly preserve the US-China trade truce while China tries to run out the clock on Trump's term. He highlighted persistent US supply-chain dependence on China, China's weak domestic economy, and selective opportunities for investors in Chinese state-favored sectors and commodity demand.

• Qazi expects low deliverables from the September Xi-Trump summit, mainly Board of Trade finalization.
• The Board of Trade is framed as managed trade of about $30 billion in non-strategic imports plus tariffs elsewhere.
• US-China leader meetings are seen as preserving a trade truce, with China playing for time.
• The US remains heavily reliant on China for rare earths, medical goods, and other critical supplies.
• China's domestic economy is described as weak, with soft consumption and failing economic transition.
• Qazi says China is far ahead in robotics and automation versus the US.
• China's commodity demand is seen as interesting, including aggressive iron ore buying despite weak steel demand.
• Investors can make money in China by following state-favored sectors, but the state decides winners and losers.