When the Turtle Met the Hare

What follows is a working read of the May 14–15 Beijing summit, to begin today. And in no particular order:

Iran

An unstable Middle East is bad for China's holy grail - its economy. Iran is China's third-largest crude supplier, and Beijing has invested over US$100 billion in Iranian energy and infrastructure, with the relationship formalised in a 25-year strategic partnership agreement signed in 2021. An unstable Gulf is not, for China, a catalyst for opportunity. It is a threat to the stability of its structural supremacy. Speaking at the Ministry of Foreign Affairs press conference, Foreign Minister Wang appealed to three principles: respect for sovereignty, rejection of force, and non-interference in internal affairs, calling for an end to the war and a restoration of peace to the Middle East and the rest of the world. The silent demand sits as an, on its surface, global order request. The "rest of the world" framing is less a universal plea than a bilateral one, asking Washington to back down, and Tehran, a strategic partner, not to retaliate against Chinese trade and allied interests in the region, specifically its crude oil interests in the UAE, which account for 6-7% and a third of LNG imports from the broader Middle East. AI Chips China would like to walk away from Beijing with an agreement for more advanced AI chips from the United States, in the hope of narrowing the capability gap between Chinese and American AI systems. Chinese domestic AI chips made up nearly 41% of China's market in 2025. Still, on single-chip performance (processing, memory capacity, memory bandwidth), Chinese chips are not expected to close the gap with American counterparts in the immediate future, with projections putting them 8 months behind the U.S., even without supply chain disruptions. The trade that would interest Beijing geopolitically is therefore not symmetrical. The U.S. export licence for the more capable H200 chips to China was granted in February 2026, but Nvidia has generated no revenue from it. Instead, Beijing has been directing domestic firms to buy locally, meaning China would rather forgo U.S. chips than accept them on neutral terms. A trade that meaningfully closes the capability gap is only useful to China if it is asymmetrically in China's favour. Otherwise, it does little geopolitically, other than sustaining the wary truce and keeping open one of the few remaining channels of exchange between two superpowers.

Taiwan

The other potential is that, following a renewed increase in trade with China, the United States walks away with its probable increase in agriculture exports to China (Chinese soybean and farm-goods are widely expected, alongside a possible Chinese purchase of 500 Boeing aircraft) paired with a weak promise to whisper in Iran's ear to come to the table with the U.S. (an act China has likely already performed for Iran to the U.S. itself, leading enemy and allied horses to water), and a tacit promise to keep neutral on Chinese military activities. The risk, in this scenario, is that China encroaches further on Taiwanese maritime boundaries through its existing pressure campaign and, over time, moves towards a unilateral claim of sovereignty over Taiwan. With the United States preoccupied and a full belly of economic gains to boast of, a unilateral declaration and naval blockade would likely receive a "well, I don't know anything about that" from the American administration and a reduction in arms sales to the island — the best response a Chinese leader could hope for. It must be said that not all analysts read Beijing this way. Foreign Affairs has argued that China's posture in the current order is defensive rather than opportunistic, that what Beijing fears is not American strength but American volatility. The maritime pressure is documented and ongoing; the blockade-and-declaration scenario remains the darker, not the inevitable, reading.

What None of This Pays For

None of this will cover the cost of clearing the mines in the Strait, which Iran has been reported to have continued laying. Pentagon briefings displayed evidence of new mines laid as recently as April 23, and Congress has previously assessed Iran's mine stockpile at around 6,000. Nor will it pay for the current failure of Project Freedom to escort U.S. ships out of the Strait, launched on May 4 and paused after less than 48 hours, as Iran retaliated with ballistic and cruise missiles and drones against the UAE and shipping in the Strait. Nor will it pay for the global inflationary effects of the oil crisis. And it will not compensate for the long-term damage being done to the petroleum industry as a whole, as consumers turn to electric alternatives—a Chinese specialty, given Beijing's commanding position in EV manufacturing and battery supply chains. In terms of geopolitical tally, China is postured to come out on top of this meeting. While Trump may be looking for his Cold War Nixon moment to appear to be reconstructing global trade structures and undercut Russian positioning (a parallel drawn by Niall Ferguson and others), Chinese and Russian ties could not be closer, with Vladimir Putin reportedly travelling to Beijing days after Trump's departure.

So far as global trade is concerned, re-entering the market with conditions of what was is not the same as establishing something brand new. Brookings' Kyle Chan has assessed that what both leaders most want is "stability" and "all the other stuff is gravy".

The Board of Trade

Much discussion has surrounded the potential creation of a "Board of Trade" to address commercial differences. Publicly proposed by U.S. Trade Representative Jamieson Greer, the mechanism would formalise and rebalance bilateral trade flows, defining priority goods for import and export and clearly delineating which products would remain off-limits. The mechanism has real potential for constructive global trade governance, structurally separate from domestic political turmoil. It could encourage international cooperation in general and similar bilateral and multilateral negotiation frameworks to warm the increasingly cold attitudes towards the global trade system, with the potential to enforce domestic interests through more direct channels to trading partners.

However, there are legitimate concerns. The Wire China has argued that the Board of Trade, far from constructive governance, signals that Washington has given up trying to change China's economy through outside pressure or inducements and instead relies on higher-ups to determine the interests of the relationship. There is also a graver structural concern. The proliferation of Gulf sovereign-fund money in Trump-orbit private vehicles (most prominently Jared Kushner's Affinity Partners) illustrates the kind of corruption risk a new bilateral commercial body would have to guard against. Without some sort of governance and enforcement structure for the body itself, the Board risks looking less like an efficient separation from domestic conditions and more like an exacerbation of elite-interest platforming. Some analysts have argued that both states regard any concession to opening their trade directly with the other as a surrender (even though data show that many exports reach the countries indirectly despite the tariffs), leaving little substantive economic discussion on the table.

While substantial concessions may be limited in the immediate term, outside of Iran negotiations, the question of Taiwan, the Board of Trade, bilateral trade more generally, and AI components remain the biggest geopolitical common concerns of the two great powers. One thing we do know about the nature of the discussions is that, when it comes to negotiating, Trump rarely plays the long game, and immediate concerns may be the only things on the table. At the same time, Xi deliberates what's best for China's longevity. In many respects, the turtle meets the hare of geopolitical planning.