When Is Xi Going to Call Trump?

If U.S. President Trump wants to know where Chinese President Xi Jinping’s mind is at, he shouldn’t be waiting by the phone, but by a computer. In the recent CPC Politburo meeting, details of which are available online, Xi laid out how he sees the China-U.S. tariff crisis unfolding, leaving no room for speculation.

On April 25, Xi Jinping chaired a meeting of the CPC Politburo—the first publicly disclosed, top-level meeting since the start of the China-U.S. tariff war. As per usual practice, the Politburo holds monthly meetings, with those held in April, July, and December specifically focused on economic affairs.

China fights with the worst-case scenario in mind

This meeting marked the first time the term “international economic and trade struggle（国际经贸斗争）” was used to characterize the Sino-US trade conflict, replacing previous terms such as “dispute” or “friction.”

The Chinese authorities have always been cautious in their choice of words. The word replacement is a revelation of Chinese decision-makers’ understanding of the current situation, with the meeting emphasizing: “China must strengthen bottom-line thinking and fully prepare contingency plans.” In the euphemisms of Chinese political language, “bottom-line thinking” is about the harshest warning you can find against careless nonchalance.

A few days ago, renowned Chinese economist Yifu Lin- whose advise is frequently sought by China’s top leadership-alluded to China’s preparedness. “All possible policy moves by Trump after taking office have been tested in the government’s scenario planning,” Lin said publicly.

Four stabilizing priorities have been highlighted during the meeting: “stabilizing employment, enterprises, markets, and expectations.” As Deng Xiaoping once famously said, “Stability overrides everything,” a sentiment that echoes in the Xi era.

The earnestness in ensuring stability can be seen in the recent introduction of a series of new legislation, including the Social Assistance Law (Draft) by the State Council on April 18. Progress on the legislation had long been thwarted by the challenges brought by China’s vast regional disparities, rendering a uniform standard of social safety net nearly impossible. But with the possibility of an imminent shock to the society stemming from US-China tensions, the Chinese government saw it an urgent priority to ensure that a safety net is made available.

Earlier, the newly approved Guidelines on Accelerating the Development of a High-Quality Employment Service System for College Graduates saw to it that unemployed college graduates would be covered by social assistance programs, such as through subsistence allowances.

Regarding China’s negative economic assets—such as local debt and the downturn in the real estate sector—the meeting categorized these under the “key risks to prevent and resolve.”

The government has formulated a series of policies to de-risk the real estate sector, including: “Rebuilding dilapidated housing to unlock land resources and demand”, “Expanding high-quality housing supply to stimulate demand” and “Government repurchases to absorb excess housing inventory.”

On local debt, the meeting called for local governments to implement a package debt resolution policies to address overdue payments owed to businesses.

Looks like China’s “visible hand” is busy building trenches and fortifying defenses.

China’s Cards in Stock

Given the uncertainties in its tug of war with the United States, China is keeping its policies flexible in case of extreme scenarios.

On fiscal and monetary policy: In the first quarter, Chinese local governments nationwide issued nearly 3 trillion yuan in bonds, an 80% year-on-year increase. The Politburo meeting reaffirmed this proactive stance, urging authorities to “accelerate the issuance and utilization of local government special bonds and ultra-long-term special treasury bonds.”

However, on the monetary policy front, the advised timing for RRR (the reserve requirement ratio) cut and interest rate reductions has changed from “seizing the right moment” (择机) back to “acting only when the approriate time comes” (适时). The word shift implies a lessened sense of urgency as the Chinese government is waiting for the Federal Reserve’s next move on interest rate cuts and will react accordingly.

Creating New Economic Growth Drivers

The meeting reiterated the need to “cultivate and strengthen high-quality productive forces, build a cluster of emerging pillar industries, and persistently advance breakthroughs in core technologies while accelerating the implementation of the ‘AI+’ initiative.”

Notably, on the 25th, alongside the Politburo meeting, the CPC Central Committee Politburo held its 20th collective study session focused on “strengthening AI development and regulation.” To clarify, these study sessions are a unique institutional practice where experts and scholars are invited to deliver lectures, followed by discussions between officials and academics.

Xi emphasized during the session: “In the face of rapid advancements in next-generation AI technologies, we must fully leverage the advantages of the new national system — upholding self-reliance, prioritizing application-driven innovation, and ensuring China’s AI development progresses in a healthy, orderly manner that is beneficial, safe, and equitable.”

The “new national system” (新型举国体制) he referred to was proposed in 2019, as an endeavor that focused on breakthroughs in critical core technologies.

China’s AI sector IS thriving. While DeepSeek made global headlines earlier this year , sending tremendous shock in the stock market, it is far from alone. Companies like Alibaba, Baidu, and Kunlun Wanwei are formidable competitors, with most embracing open-source models. While U.S. tech giants hoard closed-source systems in an effort to monopolize markets and profits, China is integrating open-source AI deeply with its real economy.

In the foreseeable future, the AI rivalry between China and the U.S. will only intensify. Whoever gains the upper hand in AI technology will lead the next AI-driven industrial revolution, a revolution whose China has already blown. Though Trump may be confident in his ability to stop China, those who steeped in cutting-edge technology, such as Mr.Jensen Huang from NVIDIA, knew that the truth is quite the opposite. His public public allegiance to the Chinese market stemmed from an open secret: if NVIDIA chips gave up China, it would present China with a golden opportunity to develop homegrown alternatives.

Conclusion

The Chinese like to generalize the essence of a meeting into an ephemeral “spirit.”The “spirit” of Xi’s recent politburo meeting can best be captured in the following declaration“Stay unwavering in managing our own affairs well and keeping high-level openness to the world.”

Editor: huyueyue