Reshma Kapadia

President Donald Trump and Chinese leader Xi Jinping's long-anticipated summit ended with both suggesting an agreement to reset their relationship, but with few concrete breakthroughs otherwise.

With such low expectations heading into the meeting, even underwhelming results appear to be enough to soothe investors for now. The cooling of tensions could draw U.S. investors back to Chinese stocks -- after wariness about tit-for-tat retaliations between the two superpowers -- and boost that market.

"It's incredibly positive for global growth and stability because the U.S. and China are finally showing some semblance of stability and some semblance of interaction," says Aniket Shah, global head of Washington, Sustainability and Transition Strategy for Jefferies. "The U.S. now accepts China as a strategic rival and peer versus a country they can try to relegate and control."

Shah sees sentiment between the two countries as turning positive, even as details are sparse. Trump mentioned "fantastic trade deals" but offered no specifics. U.S. Trade Chief Jamieson Greer said Friday that the U.S. expects China to buy "double-digit billions" of dollars of agricultural products for the next three years. China made no mention of any deals, and the U.S. hasn't released a detailed fact sheet.

With such few details, it's hard to gauge if either country came out on top.

Scott Kennedy, trustee chair in Chinese Business and Economics at the Center for Strategic and International Studies, said in a briefing Friday that he expects a one-year extension of the detente struck in the fall -- which included a cease-fire in tariffs and new export restrictions on technology by the U.S. or rare-earths by China.

A continued truce on that front would be a near-term positive for investors, at least. Kennedy also expects a "Board of Trade" mechanism for both countries, helping implement Chinese commitments and pave the way to reduce tariffs on nonstrategic goods.

But ultimately, China is the one getting a "grand bargain" on its terms, Kennedy says. The country gave little on its economic red lines around industrial policy or global trade balances, and there was "counterrevolution" back to trade stability -- a marked change from the three-digit tariffs Trump had imposed on China just a year ago, he added.

Others see both sides walking away with what they wanted. Bonny Lin, director of the China Power Project at CSIS, noted Xi gave Trump access to Zhongnanhai, a highly secretive former imperial garden, and a tour of the Temple of Heaven, a sign of the relationship they are trying to build.

On Air Force One on Friday, Trump said the two talked a lot about Taiwan. On Thursday, according to Beijing's readout of discussions, Xi warned the U.S. could trigger conflict if the U.S. mishandled the situation -- a slightly sharper version of what China has said before.

The U.S. president said he mostly heard out Xi, who, according to Trump, indicated he doesn't want to see a fight for Taiwan's independence. Trump said Xi asked him if the U.S. would defend Taiwan -- and told him: "I don't want to talk about that."

Trump also told reporters he hasn't decided on whether he will support a bipartisan bill in Congress for $14 billion in arms to Taiwan, adding he would decide "over the next fairly short period."

Perhaps the biggest winners could be Chinese companies and their stocks. Analysts noted that many of the chief executives accompanying Trump mingled with leaders of some of China's biggest companies, several of which have made notable strides in the past decade. This could mark the beginning of a shift for U.S. investors that had been wary of allocating money to China in the past.

"The most salient point is that 'anything but China' and the whole mantra of 'China is uninvestible' died," said says Louis Gave, co-founder of Gavekal. "Hundreds of journalists traveled to Beijing for the first time since 2017 and were blown away by what they saw."

The iShares MSCI China index is down 3% so far this year, dragged down Friday by a plunge in Alibaba Group's latest earnings, which were dented by its heavy investments in technology and e-commerce.

But analysts see Chinese stocks poised for gains.

"Investors should be quite satisfied to take 'renewed US-China trade conflict' off that list of risks," says Philip Wool, longtime investor in China, who also manages the Rayliant-ChinaAMC Transformative China Tech exchange-traded fund.

Wool sees China as being better positioned competitively than a few years ago, with recent trade data showing China has become a leading exporter of AI-related technology. That's a byproduct of Beijing's deliberate policy of technology self-sufficiency, in the face of restrictions on its access to advanced U.S. semiconductors and other technology.

"We expect China to continue to advance its capabilities and build share in the AI supply chain so investors might do well," Wool says, adding that investors may want to diversify with some Chinese technology stocks.

Write to Reshma Kapadia at reshma.kapadia@barrons.com

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May 15, 2026 14:15 ET (18:15 GMT)

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