On the night of May 13, 2026, U.S. President Donald Trump's plane landed at Beijing's Capital International Airport. The airport's VIP lounge displayed both the American flag and China's five-star red flag, symbolizing the complex tensions and calculations in U.S.-China relations since the Cold War. While the visit appeared to be a state visit on the surface, it was actually a stage for a massive negotiation encompassing AI semiconductors, supply chains, the Taiwan Strait, conflicts in the Middle East, dollar hegemony, and the overall structure of global power in the 21st century.
Interestingly, on the same day, China and Taiwan displayed starkly contrasting sentiments. The Shanghai Stock Exchange reached an 11-year high, while Taiwan conducted live-fire drills with U.S.-made Javelin missiles just a few kilometers from mainland China on Kinmen Island. One reflected the language of money, while the other spoke the language of gunpowder—one represented market optimism, and the other the grim reality of potential conflict.
On May 13, China celebrated as the Shanghai Composite Index hit its highest level since 2015, and the Shenzhen Stock Exchange's ChiNext Index reached an all-time high. Stocks related to AI and semiconductors surged, particularly following the news of Jensen Huang's visit to China, which signified a potential new compromise between American technological capital and Chinese manufacturing capabilities. The Chinese market began to bet on the possibility of easing U.S.-China tensions.
In contrast, Taiwan sent a different message. The Taiwanese military conducted landing defense drills on the Kinmen coast, directly across from mainland China, and for the first time, fired U.S.-made Javelin missiles. By showcasing its military cooperation with the U.S., Taiwan aimed to convey to both China and the U.S. that it is not merely a pawn on the negotiation table.
Kinmen is not just an ordinary island; it was the frontline where China and Taiwan exchanged artillery fire during the Cold War. The lights of Xiamen, China, are visible just a few kilometers away. The firing of American weapons from there is a powerful symbol, illustrating how, while China draws the U.S. in economically, Taiwan holds onto the U.S. for security.
This scene ultimately reflects the essence of the summit. The U.S. and China are in a relationship where they must cooperate even as they clash. They must fight without collapsing and compete without severing ties, as the global economy in the AI era is intricately intertwined, making complete separation impossible.
The key agenda items for the summit are fivefold:
- AI and Semiconductor Issues: The U.S. is working to curb China's rise in advanced semiconductors, particularly by controlling exports of high-performance GPUs and advanced equipment to slow China's military AI development. However, American companies like NVIDIA, Qualcomm, and Apple find it difficult to completely abandon the Chinese market. While China is pushing for self-sufficiency in advanced chips, it still relies heavily on U.S. technology and equipment. Therefore, discussions may focus on limited technology easing and supply chain stabilization.
- Trade and Currency Issues: The U.S. is pressuring China over its overproduction and low-cost exports. Conversely, China views the U.S.'s high-interest policies and dollar hegemony as destabilizing the global economy. The recent surge in Chinese stocks indicates that the market is beginning to sense a possibility of a "managed trade truce." Both countries are facing increasing economic slowdown pressures, making some level of compromise inevitable.
- The Taiwan Issue: This is the most dangerous topic of the summit. China insists it cannot compromise on the "One China" principle, while the U.S. maintains strategic ambiguity while strengthening Taiwan's defense capabilities. The concern lies in President Trump's deal-centric diplomatic style, which tends to treat security and economic issues as a single package. Some fear that the Taiwan issue could become a bargaining chip linked to trade, tariffs, and technology negotiations.
- The Middle East Issue: Currently, the biggest variable in the world is the Middle East, particularly the risk of war with Iran, which directly impacts global oil prices and supply chains. China is heavily dependent on Middle Eastern oil, and the U.S. urgently needs stable oil prices to curb inflation. Thus, while the U.S. and China compete, they also share interests in stabilizing the Strait of Hormuz.
- The Ukraine and Russia Issue: China maintains a strategic partnership with Russia while simultaneously bearing the burdens of Western sanctions. The U.S. is wary of China's support for Russia. However, in the long term, the U.S. does not want to see a complete alliance between Russia and China. Therefore, there may be some level of strategic communication that remains undisclosed during the summit.
Following the summit, three scenarios could unfold in Northeast Asia:
- Optimistic Scenario: If both countries agree to extend the trade war truce and pursue limited technological cooperation, Chinese stocks could rise further, and the semiconductor industries in South Korea, Taiwan, and Japan could stabilize. International oil prices may also stabilize, allowing global financial markets to recover their risk appetite.
- Intermediate Scenario: If the two sides appear to smile but reach only limited agreements, they may avoid conflict while continuing their core hegemonic competition. Currently, this scenario seems most likely. Competition will persist in AI, semiconductors, batteries, and rare earths, and tensions in the Taiwan Strait are likely to remain structurally high.
- Pessimistic Scenario: If the summit fails or tensions escalate over Taiwan, China may increase the intensity of its military drills, and the U.S. could expand its military support for Taiwan. Global financial markets could be immediately shaken, particularly increasing volatility in the semiconductor, shipping, and energy markets.
From South Korea's perspective, the summit should not be viewed merely as a U.S.-China conflict news story. The South Korean economy is deeply intertwined with both the U.S. security system and the Chinese market. Industries such as semiconductors, batteries, automobiles, shipbuilding, AI, and data centers are all influenced by U.S.-China relations.
Moreover, the risk in the Middle East adds another layer of complexity. If the conflict in Iran escalates and tensions in the Strait of Hormuz rise, the global economy could face a dual shock if U.S.-China relations do not stabilize to some extent. Ultimately, both the U.S. and China are living in an era where they cannot completely undermine each other.
As the ancient Chinese text "The Art of War" states, "The best victory is the one that is achieved without fighting." The U.S. and China are entering that phase, engaging in a war without firing shots, smiling while calculating each other's vulnerabilities.
Behind President Trump's expression as he arrived at Beijing airport on the night of May 13 lies a heavy shadow of an era that is more than just a diplomatic visit.
* This article has been translated by AI.
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