Opportunities and competition coexist between China and US

Editor's note: Tang Jie is a researcher at the Chinese Academy of International Trade and Economic Cooperation, under China's Ministry of Commerce. The article reflects the author's opinions and not necessarily the views of CGTN.

China and the United States entered a strategic cooling-off period following the Busan meeting, marked by the suspension of reciprocal tariffs to prevent further collapse in bilateral economic and trade ties. This buffer allowed both sides to recalibrate for high-level negotiations addressing deep-seated structural contradictions ahead of high-level negotiations on structural economic and trade issues.

Now, the two sides have held a new round of economic and trade talks. We believe that as the world's two largest economies, the stabilization of China-US economic and trade relations has effectively curbed global industrial chain fragmentation, stabilized investment expectations, injected certainty into global economic recovery, and set a model for resolving major-power economic differences through dialogue.

China and the US are experiencing a mix of partial recovery and deep competition in trade, supply chains, technology controls, and corporate investment. Both sides recognize that a full decoupling is unrealistic and costly. Therefore, competition is concentrated in high technology and industrial policy, while trade and investment remain active in areas that are not related to national security.

Trade data shows a temporary "decoupling," but supply chain interdependence remains intact. In electromechanical products, US importers engaged in stockpiling in 2025, followed by destocking and an import gap in 2026. Despite restrictions on direct trade, China's exports of intermediate goods to ASEAN and Mexico have continued to grow. Trade flows show a clear "re-export" pattern, with the trade deficit shifting rather than declining. US imports from China fell by 29.7% in 2025, while the overall goods trade deficit still reached a record $1.24 trillion, indicating shifting sourcing rather than reduced total imports.

From another perspective, the US has shifted from broad supply chain relocation to tighter control over key sectors. Through Section 301 and Section 232 tariffs, it targets strategic industries for more precise control. In high-end sectors, technological barriers and scale effects still make Chinese suppliers difficult to replace. With escalating semiconductor tariffs in 2026, the high-tech supply chain is moving toward a "dual-track" structure. 

From an investment perspective, while multinational firms emphasize "risk mitigation," investment in China's high-tech service sector remained stable in early 2026, showing continued market-driven engagement. 

Sino-US economic and trade relations still require time to stabilize, but cooperation potential remains broad. Areas such as new energy, green technology, agriculture, healthcare, and civil aviation are highly complementary, with opportunities in manufacturing support, logistics, and digital services. Both sides share interests in food security, energy transition, and supply chain stability. They can deepen division of labor, manage differences, and expand mutually beneficial cooperation.

Business leaders accompanying US President Donald Trump on his visit to China span technology, finance, aviation, and semiconductors, reflecting sustained confidence in the Chinese market and its long-term growth potential.

This structural shift shows China is moving from "extensive attraction" to "targeted investment selection." Increased high-tech participation reflects confidence in China's economic transformation. China continues to share its opening-up experience through free trade zones, the China International Import Expo, and the Belt and Road Initiative, promoting rule alignment and connectivity. By improving market access, strengthening IP protection, and optimizing the business environment, China has made contributions to establishing a more open global economic system and achieving mutual benefits and win-win outcomes.