Chinese President Xi Jinping, emerging as the dominant figure at a recent Asia-Pacific economic summit, actively sought trade and investment opportunities. However, he also delivered an implicit caution to nations, urging them not to align with the United States in its efforts to lessen global dependence on Chinese supply chains.
With President Trump’s earlier departure from South Korea, Mr. Xi found himself as the sole superpower leader at the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju. He appeared affable, greeting and shaking hands with numerous world leaders, as well as economic and finance ministers during the meeting’s opening.
Xi capitalized on this platform to promote China, recognized as the world’s second-largest economy and a major manufacturing hub, to an audience including leaders from Japan, Canada, Australia, and the host nation, South Korea. Notably, he extended an invitation to Prime Minister Mark Carney, who had recently been snubbed by President Trump, to visit China. He also held a meeting with Japan’s new leader, Sanae Takaichi, despite her prior vocal criticisms of Beijing’s growing regional influence.
During his address, Xi advocated for bolstering industrial supply chains. This was a thinly veiled critique of Western efforts to relocate manufacturing and reduce reliance on China. He asserted that China would ‘join hands’ and ‘extend chains’ rather than ‘let go’ or ‘break chains,’ signaling a desire for continued integration.
In another speech, delivered by a Chinese representative to business leaders, Xi indirectly criticized the United States. He urged APEC economies to ‘oppose protectionism, resist unilateral bullying, and prevent the world from returning to the law of the jungle,’ emphasizing a call for multilateral cooperation.
However, China’s recent actions somewhat undermined this plea for global unity. Just weeks prior, Beijing had proposed extensive new export controls on rare earth minerals. These minerals are crucial for nearly all modern technologies, including semiconductors, batteries, and jet engines, and China controls approximately 90% of the world’s supply. Such controls would have granted China immense power over other nations.
While China claimed these rare earth controls were a response to U.S. trade measures, they nonetheless sparked significant concern across many other countries.
Dylan Loh, an associate professor of public policy and global affairs at Nanyang Technological University in Singapore, commented that ‘The recent rare earth controls demonstrate geopolitical leverage within the ongoing US-China economic conflict, and this will not have gone unnoticed.’
The proposed controls were only temporarily suspended after Xi’s discussions with Trump on Thursday, where both leaders agreed to a trade truce.
Song Guoyou, a Fudan University expert on US-China economic relations, defended China’s export controls on rare earths. He argued they were a necessary countermeasure against US tariffs on Chinese goods and restrictions on American technology exports.
‘These actions,’ Song stated, ‘have destabilized regional trade and production flows. This is precisely why China is advocating for collaborative efforts to ensure the stability and seamless operation of these supply chains.’
Song further explained that Xi’s comments on supply chains were intended to dissuade other governments from adopting American-style tactics, such as imposing tariffs, export restrictions, and making exaggerated claims about national economic security.
Questioning the timing of the concern, Song asked, ‘Was the stability of the rare earth supply chain a concern for most regional members before? Clearly not. It became an issue only after the United States relentlessly imposed trade suppression and export controls on China.’
Xi’s meeting with Trump on Thursday in Busan, approximately 50 miles south of Gyeongju, yielded several concessions. These included a reduction in some U.S. tariffs on Chinese goods, a temporary halt on port fees for Chinese vessels, and a postponement of US export controls that would have limited Chinese companies’ access to American technology.
In exchange, China committed to resuming purchases of American soybeans and suspending its newly imposed rare earth export controls. The United States also reported that China agreed to intensified efforts to control the flow of precursor chemicals essential for fentanyl production.
Loh observed that Xi strategically utilized the summit to advocate for ‘practical cooperation’ within the region, positioning China as an indispensable partner in these initiatives.
Xi highlighted China’s global infrastructure project, the Belt and Road Initiative, along with two significant trade agreements: the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. These agreements, he suggested, would help China counteract US attempts to isolate Chinese businesses from international trade.
Analysts suggest that many countries in the region are in a precarious position, caught between the competing demands of Washington and Beijing. Their strategy often involves fostering stronger relationships with both powers to maximize their own benefits.
Recent developments underscore this dynamic: in the past week alone, Trump finalized trade agreements with Thailand, Cambodia, Vietnam, and Malaysia. Concurrently, China strengthened its trade alliance with a group of eleven Southeast Asian nations.
Stephen Olson, a former US trade negotiator and senior fellow at the ISEAS-Yusof Ishak Institute in Singapore, summarized the situation: ‘It’s about Southeast Asian countries doing what they consistently do: making necessary adjustments to maintain strong ties with both the United States and China.’