U.S.–China trade talks stall as Geneva truce falters
Amid new U.S. export bans and visa revocations, Beijing holds back on key concessions
Welcome back to What’s Happening in China, your weekly China brief.
U.S.–China trade talks “are a bit stalled,” Treasury Secretary Scott Bessent told Fox News this week. “I think that given the magnitude of the talks […] this is going to require both leaders to weigh in with each other,” he said.
On Friday, Trump went on a tirade on Truth Social. Referring to the May 12 Geneva truce, he claimed to have “made a FAST DEAL with China in order to save them from what I thought was going to be a very bad situation.” The only problem, he said, is that “[China] HAS TOTALLY VIOLATED ITS AGREEMENT WITH US.”
The Geneva truce has been shaky from the start, and now, according to The Wall Street Journal, it’s “at risk of falling apart.” The agreement depended on rare-earth export concessions, and although Vice Premier He Lifeng—Beijing’s lead negotiator—“agreed to the demand in the final hours of marathon discussions with Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer,” Beijing has yet to follow through.
Meanwhile, in a dizzying week of actions, the U.S. announced it would “aggressively revoke” visas of Chinese students, unveiled plans for new regulations to capture subsidiaries of PRC companies under U.S. curbs, and, according to Reuters, “has ordered a broad swathe of companies to stop shipping goods to China,” including “[chip] design software and chemicals for semiconductors, butane and ethane, machine tools, and aviation equipment.”
Truce? What truce?
Let’s jump into it.
— PC
Through the Lens
In Focus
I. “Made in China 2025” v2.0
President Xi Jinping’s government is considering a new version of its master plan to boost production of high-end technological goods, according to people familiar with the matter, signaling its intention to keep a firm grip on manufacturing as President Donald Trump looks to bring more factories back to the US.
Officials are drawing up plans for a future iteration of Xi’s flagship “Made in China 2025” campaign, according to the people, who asked not to be identified discussing deliberations that aren’t public. The plan over the next decade would prioritize technology including chip-making equipment, one of the people said, adding that it may not carry a similar name to avoid drawing criticism from Western countries.
Policymakers who are separately preparing Beijing’s next Five-Year Plan starting in 2026 are looking to maintain the share of manufacturing in gross domestic product at a stable level over the medium to long-term, one of the people said, underlining how the rebalancing of China’s economy sought by the US may prove elusive.
As part of deliberations, officials have discussed whether the next Five-Year Plan should include a numerical target for consumption in terms of its share in China’s GDP, according to the person. They are currently leaning against that, as authorities are concerned they lack effective tools to spur spending by households and are reluctant to commit to a specific number, the person said.
The content of these plans is still being debated and could undergo substantial changes before they are released. The Five-Year Plan will be made public at the next annual legislative session in March 2026, while the next manufacturing blueprint could be unveiled at any time, either before that meeting or afterward, one of the people said.
Read: Xi Plans New Made-in-China Effort Even as Trump Aims to Boost US Manufacturing (Bloomberg)
Related: China’s Startups Race to Dominate the Coming AI Robot Boom (Bloomberg)
II. Shangri-La Dialogue
Of the many military officials darting across the lobby of Singapore’s Shangri-La Hotel this weekend, there has been one significant absence.
China’s Defence Minister Dong Jun skipped the annual Shangri-La Dialogue, Asia’s premier security forum, with Beijing sending a delegation of lower-ranking representatives instead.
It was the first time since 2019 that China has not dispatched its defence minister to the high-level dialogue on regional defence, except when the event was cancelled in 2020 and 2021 due to the COVID-19 pandemic.
Beijing’s decision raised eyebrows in Singapore, coming at a time of heightened tensions between China and the United States – the world’s two biggest superpowers.
Dong’s absence meant there was no face-to-face meeting with his US counterpart, Secretary of Defence Pete Hegseth, who had the floor to himself on Saturday when he told the defence forum that the military threat posed by China was potentially imminent.
“It has to be clear to all that Beijing is credibly preparing to potentially use military force to alter the balance of power in the Indo-Pacific,” Hegseth told delegates in Singapore.
Pointing to China’s regular military drills around Taiwan as well as increasingly frequent skirmishes in the South China Sea, Hegseth said Beijing was proactively harassing its neighbours.
“There’s no reason to sugar-coat it. The threat China poses is real, and it could be imminent,” Hegseth said.
Read: Hegseth warns of China threat as Beijing’s top brass skip Singapore summit (Al Jazeera)
Related:
Macron warns US and the Indo-Pacific not to abandon Ukraine at the expense of focusing on China (AP)
Europe Sees China-Russia Threat as World’s ‘Greatest Challenge’ (Bloomberg)
Pacific Island nations support China's Taiwan claims at high-profile foreign ministers' meeting (ABC News)
III. U.S. to “aggressively revoke” visas of Chinese students
The U.S. will “aggressively revoke” visas for Chinese students, Secretary of State Marco Rubio said Wednesday in an escalation of the Trump administration’s conflicts with China and academia.
Rubio’s announcement did not specify how many students would lose their ability to study in the U.S., but suggested the effort would focus on people with connections to the Chinese Communist Party or those studying sensitive subjects.
“Under President Trump’s leadership, the U.S. State Department will work with the Department of Homeland Security to aggressively revoke visas for Chinese students, including those with connections to the Chinese Communist Party or studying in critical fields,” he said in a statement. “We will also revise visa criteria to enhance scrutiny of all future visa applications from the People’s Republic of China and Hong Kong.”
The State Department’s targeting of Chinese students reflects how worsening geopolitical tensions between the U.S. and China have poisoned the two nations’ long-standing educational ties.
[…]
Even those who say the U.S. has legitimate security concerns say a broad revocation of visas may be unproductive.
“The U.S. government needs to take into account risks of non-traditional espionage, but the way they’re drawing these boundaries is too broad and too undefined,” said Mary Gallagher, dean of the Keough School of Global Affairs at Notre Dame University and an expert on Chinese politics. “ All universities in China are in some ways affiliated with the Chinese Communist Party, so it seems to me overreach and damaging to not just U.S.- China educational exchange, but also to U.S. science and technological competitiveness.”
Read: Marco Rubio: US to ‘aggressively’ revoke visas of Chinese students (Politico)
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