China’s Economic Resilience Grows as Trump-Xi Summit Looms
As global attention remains fixated on U.S. President Donald Trump’s foreign policy maneuvers, China has been quietly strengthening its economic position. A summit between Trump and Chinese President Xi Jinping, originally scheduled for late March, has been delayed by about a month due to Trump’s focus on the U.S.-Israeli conflict with Iran. However, when the two leaders finally meet, Trump may find Xi in a much stronger economic position than anticipated.
At the beginning of the year, China’s economy was struggling with the aftermath of the world’s largest property bust and lingering deflation. Despite a booming export sector that delivered a trade surplus exceeding $1 trillion in 2025, business investment contracted at the fastest annual rate on record, excluding the pandemic year of 2020. This prompted calls for significant fiscal and monetary stimulus from Beijing.
Recent data, however, has shown a strong rebound in economic activity, particularly in retail sales, industrial production, and business investment. Annual consumer inflation has reached a three-year high, and producer disinflation has eased to its lowest level in 18 months. The external trade outlook also remains favorable, with goods shipments to Europe and Asia compensating for tariff-driven losses in the U.S. If the export boom continues, China’s record trade surplus from last year is expected to grow even larger.
China’s focus on energy security has further bolstered its resilience amid the current oil shock caused by the U.S.-Israeli war in Iran. Although nearly 45% of China’s oil imports pass through the Strait of Hormuz, its substantial stockpiles allow it to avoid immediate pressure to reopen the strait. China’s oil imports surged to around 12 million barrels daily in January and February, a nearly 16% increase from the previous year. Its commercial and strategic crude reserves now stand at approximately 1.2 billion barrels, providing enough supply for about four months.
While China’s economic recovery appears robust, it is not immune to global shocks. Europe and Asia, key export destinations for China, face risks from surging energy prices, which could slow growth and ripple back to China. Additionally, Trump’s recent foreign policy actions may aim to weaken China’s strategic position in regions like Venezuela, the Panama Canal, Cuba, and Iran. Analysts at Rabobank suggest that the U.S. is leveraging its influence over key maritime chokepoints for Chinese energy imports as a countermeasure to China’s control over rare-earth supply chains.
When the summit between Xi and Trump eventually takes place, neither leader will hold all the cards. However, Xi’s hand will be significantly stronger than expected just a few months ago, according to economist Phil Suttle. The evolving dynamics suggest that China’s economic resilience and strategic positioning have improved considerably, even as global tensions persist.