China expert reveals very interesting decision Xi made during Trump talks

Well, we are now going to cross to Beijing to listen to the latest from Donald Trump and President Xi Jinping on the second day of talks taking place this morning. I think a lot of good has come of it. We've made some fantastic trade deals, great for both countries. He's a man I respect greatly, become really a friend. We've 12 years, it's a long time. And we've settled a lot of different problems that other people wouldn't have been able to settle. And the relationship is a very strong one. We've really done some wonderful things, I believe. We did discuss Iran. We feel very similar to Iran. We want that to end. We don't want them to have a nuclear weapon. We want the straits open. We're closing it now. They closed it, and we closed it on top of them. But we want the straits open, and we want them to get it ended because it's a crazy thing. They're a little bit crazy, and that's no good. Can't have it. They cannot have a nuclear weapon. But we discussed a lot of other things also, and I think we're very much on agreement. We're going to have some further discussions now with the group. But I just want to thank President Xi and all of his representatives. We've become friendly with all of them. Great people. And it's an honor to be here. We'll be back in, I believe, on September 24th or thereabouts. And President Xi is going to be coming to the United States. And we will be reciprocal, like reciprocal trade. The visit will be reciprocal. We're going to lay it on the line, and we're going to have — you're going to walk away hopefully very impressed, like I'm very impressed with China. And I just want to end by saying thank you very much. It's been really a great couple of days. Thank you very much. Well, Mr Trump arrived at the Zhongnanhai Garden in typical fashion, the beast pulling up to the compound accompanied by his full motorcade. The vehicles traveled directly inside the compound, with Mr Trump getting out of the vehicle outside the view of the waiting media. Well, stills released from inside the compound show Presidents Trump and Xi walking through the gardens, engaging in discussions and meeting some of those who live on the site. Well, I'm joined now in the studio by senior fellow at Chatham House, James King. James, thanks so much for joining us this morning. We're just in that clip now of President Trump speaking in that bilat, talking about how much respect he has for Xi Jinping and for China. But he did talk about the Middle East, didn't he? He didn't kind of hold back almost. No, he didn't. You know, I must say, I felt that he sounded rather tired. Maybe he needs a restorative bowl of noodle soup or something. That's right. But yes, I was also struck by this. He didn't duck the Middle East. He said that, you know, he wanted the Strait of Hormuz to be open. And he also said very directly, we don't want them, i.e. Iran, to have a nuclear weapon. Now, this is a fascinating statement there in front of the cameras, in front of the media, because it's very interesting that China hasn't mentioned anything about Iran having or not having a nuclear weapon. My reading of that is that China is not on board with the U.S. trying to force Iran not to have a nuclear weapon. China is keeping its cards close to its chest. You know, if I had to stick my neck out, I would say that China probably also eventually would perhaps not like Iran to have a nuclear weapon. But at the moment, it's maintaining its leverage with the U.S. by not chiming in saying, yes, we don't want them to have a nuclear weapon either. So I thought that was very interesting. There was another point in what Trump just said there that I thought was revealing, and that is that Trump appears to be inviting Xi Jinping to go to the U.S. He said, we're going to host you very well. That's interesting to me, too. That perhaps suggests that this is going to be an ongoing thing, which to me plays back to what China was saying about wanting to put this relationship onto a new level. There's a new phrase that has come out of this summit, which is that China wants there to be a constructive China-U.S. relationship of strategic stability. Stability being the key term there. China doesn't want flip-flops. It doesn't want a reassertion of the U.S. trade war against China, U.S. sanctions on Chinese tech companies, and it doesn't want more bad news on Taiwan. So I think that all of this is very interesting. It's possible that the U.S. has agreed to put this relationship onto a new footing, a new footing of stability, much closer to how China would define stability. Okay, we're going to bring in Helen Ann Smith, Asia correspondent, who's based in Beijing for us. Helen Ann, I don't know if you managed to catch those remarks that we were just playing, the latest remarks from Donald Trump there. What did you make of what he was saying? He didn't shy away from the Middle East, and as James was just pointing out there, perhaps this is a changing in that power dynamic between these two nations. Yeah, I think that all-important question of Iran is the sort of the big elephant in the room, you like, and we spent a lot of time yesterday dissecting just the completely opposite emphasis, if you like, in the two readouts from the two different sides on that all-important issue. The American readout from the White House, pretty short, but I think about 50 percent of it talking about Iran, and China's readout, actually quite lengthy and barely a mention. And as we've been discussing earlier, Mari, there has been a new statement from the China Ministry of Foreign Affairs today, a lengthy statement about China's position on the Iran conflict. And perhaps they've put that out there, perhaps just to sort of address that imbalance, if you like, to stop the speculation as to why they said so very little about it. And in that statement, they didn't say anything that was remarkably different from what we know to be their position, essentially that the conflict probably should never have happened in the first place. They've been quite clear on that over recent months. They did say that they do want to see the reopening. But look, remember, China is not going to hand this to Donald Trump on a platter. They do not want him to come out of this whole thing being somehow victorious. They like the imagery that he is coming to them for help. Yes, they'd like to be seen as a global player, but they're not going to act in a way that sort of gives Donald Trump the upper hand in some way. That's just not how they operate. But we're looking at some of these pictures now of the two of them walking around the garden. And I think actually they do look a little more relaxed than they did yesterday. That would be perhaps expected. This is a more informal setting. This is this is Zhongnanhai, the central compound in central Beijing that is home to the leaders of the Communist Party. And nowadays it is Xi Jinping's home. We know from just little snippets that we've been sent via the kind of the White House press pool that at one point Donald Trump said, these are the most beautiful roses I've ever seen in my life. I can tell you from experience that in some of the sort of public parks in Beijing, you know, meticulous attention paid to making kind of gardens and flower arrangements absolutely beautiful. So I'm sure in Zhongnanhai and Xi Jinping's garden, I'm sure they really are quite remarkable. Those comments then they sat down together. And I think both, again, expressing some of the bigger themes that we heard from them ahead of the state banquet yesterday, which was that sense that, look, we have a responsibility as the two biggest superpowers in the world to work together. We have a responsibility to each other, to our peoples and to the world to manage our competition. And this is themes that I think certainly from the Chinese side, we've heard pretty repeatedly. It's something that they lean into a lot. Remember their sort of underlying goal and push and narrative that they've been working on for some years really is stressing this fact that perhaps they are the sort of more responsible global superpower nowadays, that they are the more stable ones, that actually the sort of global order that they see as over a long time having been far too Western-centric should actually start looking a bit to the east. But look, Xi Jinping said similar things. He said as well that, you know, we will be able to reach some cooperation and some achievements together. So, look, we haven't had a lot of the detail about exactly the specifics on what they might have agreed on some issues yet. We are certainly expecting some news on trade. As we were saying yesterday, trade is the easy bit. They can easily buy some bits and bobs from each other that they want. Trump in his interview with Fox News earlier, he hinted that there's going to be a big purchase of Boeing aircraft from the Chinese. The Chinese, he said, are going to buy 200. Actually, interestingly, Boeing's share price has actually dropped 4% because rumours were that they were going to buy 500. So, 200 actually slightly less than what some analysts were expecting. But look, I think there will be some other purchases too. I suspect the Chinese might make a big purchase of US soya beans. That, of course, is a politically important purchase for Donald Trump. Of course, many rural farmers making up his base and China buys an enormous proportion of US soybeans. That's very, very important. It was one of the sort of taps that they sort of turned off or turned down during the trade war when they're trying to leverage pressure on each other. I think we'll also probably see some more access for Chinese companies into American markets. That's something that from China's side, they wanted to see in terms of trade. But look, I think the bigger question mark that we will continue to ask as we come out of today, as Trump flies home, as the sort of the dust settles on this summit, is the sort of easy bit, the trade agreements, the things that they were able to see eye to eye on, is that going to be enough to really stabilise this all-important geopolitical relationship? Because while they might do some deals, the bigger, thornier issues remain. Iran, as we've been discussing a lot this morning, of course, a big and immediate one for Donald Trump. But the bigger, thornier, longstanding issue of Taiwan, of course, remains an issue and certainly will remain an issue for the foreseeable for China. It is their most important demand. It's the thing they want the most. And their playbook on that is to just gradually push, gradually nudge, move the dial, shift mindsets bit by bit, undermine Taiwanese confidence so that if and when the big moment ever comes, the Taiwanese don't necessarily believe they will have US backing and perhaps will just capitulate. That is what the CCP want. That's what they're aiming for. And as you have been discussing in the studio, the fact that Donald Trump has invited Xi Jinping and his wife to visit Washington DC as soon as September, actually a lot sooner than we were expecting, that plays into China's hands too when it comes to this Taiwan campaign. Because for them, it is about bringing it up over and over again in multiple times, in multiple settings when they see each other. So they will certainly continue to push for that. But look, I think from both sides, what they want the world to take from these images is that we are two grown-ups who are stabilising our relationship. I think to a degree, in economic terms, that might have been achieved. But look, there are going to be much bigger questions coming out of this. But I wanted to ask you about that, Helen Ann. James was just pointing out the same thing about pointing to that visit potentially in September for Xi Jinping to be coming to the US. And I suppose I'm curious, do you think that this visit, and what we've seen of it so far anyway, has in any way shifted the dial or altered the relationship and the tone of that relationship ahead of then that meeting in September? Are we in a different place from where we were, let's say, a week ago? And therefore, could that then change the meeting that we then see in September? What an interesting question, Mari. Probably the all-important question and the one that certainly from the Chinese side, their eyes are on. That is the big question. Can they come out of this as the greater superpower, if you like? Do they have the upper hand over the Americans? Do they have the sway, not just with them, but with other allies and other people around the world to wield the influence that they want to shift the global order to look further east? I think it's probably too big a question to answer right now, just while we're still in the midst of this summit. But look, let's not forget, coming into this, the President of the United States needed to ask for Chinese help with the mess of his making. And that imagery says a lot in itself. I mean, just think about these two countries and what position they were in 10 years ago, 20 years ago. China's sort of rise and ascendancy has been so rapid, not just economically, militarily, technologically. There are so many ways in which when you take a look, a long view look at this superpower race, China is catching up fast. In some areas, it might even be winning. And the Chinese are crucially aware of this, and it is their focus and their goal, and a very sort of deep seated belief in their sort of political philosophy is that the Americans have actively tried to hold back their growth, that they have actively tried to sort of restrain them. And it's really interesting in Xi Jinping's opening remarks yesterday at the sort of opening bilateral meeting, he referred to the Thucydides trap, excuse me. That is something potentially Don Trump might not know what it is, but it is a theory whereby a smaller emerging power comes up and threatens the power of an existing larger power and that if not managed properly, that could descend into conflict. So China making its position on that very clear, that's how things might have seemed. But these powers as they see it can sit alongside each other from the Chinese perspective, they could even be the dominant. Helen Ann in Beijing, thank you so much for joining us. And well done for giving that, I'm going to call it a TH trap because you're a better woman than I am, Helen Ann Smith. James, let's go back for a second to you. And what did you make of what someone thought Helen Ann was saying there? Very perceptive. And, you know, to my point of view, I think that the really big question that emerges from this summit is, are we now shifting in the world from a US led world order into perhaps the foothills of a China led world order? Or maybe we're going somewhere else, which is a general world disorder. And I think, you know, the answers to those questions are not very clear there. You know, it could be that we're going to slip into a disorder if the US and China can't get on. But if you look at the relative strengths of the US and China now, I would argue that China is perhaps already in terms of comprehensive power, more powerful than the United States. And the reason I say that is because although US GDP remains larger than that of China in nominal terms, if you look at purchasing power parity, which is a measure many economists use, China is already bigger than the United States. China manufactures about one third of the world's manufactured goods. The US manufactures only one sixth. China has much bigger foreign exchange reserves, reserves of US dollar currency. China is, in my view, and this is the subject that I've been working on now for a decade, already the technological leader in the world in so many different crucial and advanced technologies. China leads the US, not in semiconductors, not perhaps in AI, but in almost all other areas, China's already in the lead. The one area in which the US's power is greater than China and remains much more impressive is military. But if you're not fighting a war, then perhaps military power doesn't count for a whole lot. So I would say, if I was forced to stick my neck out, that we may well be already moving in to a global order which is conditioned and led more by China than by the US. And I think here in the West, we tend to think of the US as the big brother, and the US remains the leader of the West. But there's a huge proportion of the world that doesn't belong to the West. There's 140 countries in the United Nations that are of developing country status, and China is much more significant for them in terms of trade, investment, building their infrastructure, than the US is. So I would say, on a comprehensive basis, we are seeing a shift in the world's axis, a shift in the basic way the world works. And we can see this played out in Beijing. This is why I think this summit is so historic.