<div id="readability-page-1"><div><p>INVESTORS are looking for further signs of easing tensions between President Donald Trump and his counterpart Xi Jinping to help remove an overhang on Chinese markets, with geopolitical and trade issues in focus.</p><p>Expectations for a concrete deal between the world’s two largest economies remain low, though the meeting of the two leaders may calm trade tensions between their countries, analysts say. Any such improvement, along with a potential easing of curbs on US tech exports to China, could boost Chinese exporters and tech hardware makers.</p><p>A successful meeting between the two leaders from May 14 to 15 may provide an extra boost for Chinese equities, which have lagged their Asian peers even as regional markets rallied in April on easing concerns over the Iran war. Optimism over a stronger renminbi is also building as the US dollar has retreated. Any structural disagreements, on the other hand, could reignite volatility in local stocks. </p><p>“If the summit can bring a little bit more certainty to the US-China relationship and drive that risk premium down, that’s ultimately going to be very positive for Chinese equities,” said Christopher Hamilton, head of client solutions for Asia Pacific ex-Japan at Invesco.</p><p>These are the areas market participants are watching ahead of the summit: </p><h2>Trade tariffs</h2><p>The base case for tariffs is for them to remain in place without a meaningful escalation, according to Macquarie Group. Current US levies on Chinese goods at an effective rate of around 22 per cent, according to a JPMorgan Chase estimate, are subject to an ongoing investigation, and China has pointed to those probes as a source of friction.</p><div><div><h3>Navigate Asia in<br/>a new global order</h3><p>Get the insights delivered to your inbox.</p></div></div><p>An absence of further tensions “marginally improves visibility for broader China exporters by easing escalation risk and providing better supply-chain certainty, even as existing tariffs continue to cap upside,” said Eugene Hsiao, head of China equity strategy at Macquarie in Hong Kong.</p><p>While companies related to energy security or the tech global supply chain are likely to get waivers, higher levies will be particularly challenging for biotech firms with significant US revenue exposure, such as WuXi Biologics (Cayman) and WuXi AppTec, which are already under pressure from the US Biosecure Act. </p><h2>Middle East conflict</h2><p>The Iran war adds an additional layer of strain to US-China tensions. Washington’s efforts to tighten pressure on Teheran are increasingly affecting China, which remains Iran’s largest trading partner and a major buyer of its oil exports. The US has also sanctioned refiners in the Asian country that process Iranian oil.</p><div><div><div><p>SEE ALSO</p><div><div><div><div><p><img height="2597" src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/4dbcdc1aafbe8282a24cb7947281edf3aa26b6e449b17fb1ac8379b093fafffa/query-ZHByPTEmZj13ZWJwJnc9MjQw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="3551" original-src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/4dbcdc1aafbe8282a24cb7947281edf3aa26b6e449b17fb1ac8379b093fafffa/query-ZHByPTEmZj13ZWJwJnc9MjQw"/></p></div><p></p><h3><span>US-China summit: managing a rivalry, not resolving it</span></h3><p></p></div></div><div><div><div><p><img height="3818" src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/5c0775d3b3d1bcaf5ccafa07c2f9960d558ea8665cf8d6598eb71a91acaf5af0/query-ZHByPTEmZj13ZWJwJnc9MjQw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="5726" original-src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/5c0775d3b3d1bcaf5ccafa07c2f9960d558ea8665cf8d6598eb71a91acaf5af0/query-ZHByPTEmZj13ZWJwJnc9MjQw"/></p></div><p></p><h3><span>The AI arms race and China’s bid to stop Manus’ US$2 billion sale to Meta, explained</span></h3><p></p></div></div><div><div><div><p><img height="3000" src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/9da6fdd5a4c3dcf8339f0f6e2615a7e47d3d3b67ad7fb02127c09ab527b2da4e/query-ZHByPTEmZj13ZWJwJnc9MjQw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="4500" original-src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/9da6fdd5a4c3dcf8339f0f6e2615a7e47d3d3b67ad7fb02127c09ab527b2da4e/query-ZHByPTEmZj13ZWJwJnc9MjQw"/></p></div><p></p><h3><span>US sanctions on China oil giant Hengli turn up heat for teapot refiners</span></h3><p></p></div></div></div></div></div></div><p>Trump has said he would discuss the Iran war with Xi during their summit. A signal of easing tensions on that front may help improve risk sentiment, with analysts pointing out that meetings between the two leaders have often triggered sharp swings in shares.</p><p>“While the Chinese economy is short-term resilient, both sides have strong interests in quickly resolving the Middle East conflict, reopening the Strait of Hormuz, and pacifying other potential chokepoints,” JPMorgan analysts led by chief China economist Feng Zhu wrote in a note on Friday (May 8).</p><h2>Tech curbs</h2><p>Tensions over chip technology have intensified ahead of the meeting, with US regulators reportedly halting tool shipment to Hua Hong Semiconductor. This followed Beijing’s move to block Meta Platforms’ US$2 billion bid for AI startup Manus to keep cutting-edge technology inside its borders.</p><p>It is possible for the US to moderately relax chip equipment export controls by allowing tools for more advanced 14 nm and 7 nm chips, or unofficially offer exemptions to specific companies such as Hua Hong and Shanghai Huali Microelectronics, which will bode well for local players, according to Jefferies Financial Group analysts including Edison Lee. </p><p>Some analysts remain cautious over a truce as both countries continue to fight for supremacy in artificial intelligence. Still, domestic chipmakers may continue to attract capital inflows, given Beijing’s push to reduce dependence on foreign technology.</p><h2>Rare earths </h2><p>Rare earths are expected to be a key topic as Trump looks to secure shipments from China, which accounts for more than 70 per cent of the global supply. Since late October 2025, US-China policy has revolved around a fragile detente, with Xi pausing export restrictions on rare earth elements and Trump putting off curbs on Chinese access to vital American technology.</p><p>The frictions have fuelled a rally in China’s biggest producers, including China Northern Rare Earth (Group) High-Tech and Xiamen Tungsten, with shares more than doubling in the past year. </p><p>The meeting between Trump and Xi will “likely focus narrowly on trade and export controls – including tariffs, Chinese purchases of US goods such as soybeans, energy, and airplanes, and stable rare earth flows,” according to Goldman Sachs Group economists including Andrew Tilton. </p><h2>Agriculture purchases</h2><p>“Beyond signalling stability, Beijing may provide new purchase commitments for US exports, possibly including soybeans, other agricultural products, oil and gas, and civilian aircraft,” said Gabriel Wildau, managing director at advisory firm Teneo. </p><p>Greater soybean purchases may improve cost structures for Chinese food producers, such as Foshan Haitian Flavouring &amp; Food, Jonjee Hi-Tech Industrial and Commercial Holding and Qianhe Condiment and Food, according to JPMorgan. </p><p>China may also opt to buy more pork, beef and poultry from the US, which may impact the local hog industry already weighed down by slumping prices. Shares of industry leaders such as Muyuan Foods, Wens Foodstuff Group and New Hope Liuhe have fallen more than 15 per cent since mid-September 2025, underperforming the benchmark. BLOOMBERG</p><div><p>Decoding Asia newsletter: your guide to navigating Asia in a new global order. <span>Sign up here to get Decoding Asia newsletter.</span> Delivered to your inbox. Free.</p></div></div></div>

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<p>Investors are closely watching the upcoming summit between President Trump and Xi Jinping, hoping for signs of easing trade tensions that have impacted Chinese markets. Analysts suggest that while expectations for a concrete deal are low, any improvement in US-China relations could benefit Chinese exporters and tech firms. Key areas of focus include trade tariffs, the Middle East conflict, tech export curbs, and rare earths. A successful meeting could boost Chinese equities, while unresolved issues may lead to increased market volatility.</p>

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Tariffs, rare earths, tech curbs: Stock trader’s guide to navigating high stakes Trump-Xi summit