However, in equity markets, the benchmark Shanghai Composite index slid 0.5 per cent after hitting an 11-year high a day earlier, while the blue-chip CSI300 Index lost 0.65 per cent.
“Market expectations are low,” said Ritesh Ganeriwal, group head of investments & advisory at digital investment platform Syfe.
“Investors aren’t positioned for a positive surprise – meaning even a modest outcome could boost sentiment. The next major US-China trade event isn’t until November, when existing rare earth and tariff curbs pause. A constructive meeting could create a window of stability for the next six months.”
Investors largely expect Trump and Xi to keep trade tensions on the back burner during their talks and say they are focused on the booming AI sector.
The US has cleared around 10 Chinese firms to buy Nvidia’s second-most powerful AI chip, the H200, but not a single delivery has been made so far, sources told Reuters, leaving a major technology deal in limbo as CEO Jensen Huang seeks a breakthrough in China this week.
Richard Pan, fund manager at China Asset Management Co, said that capital markets are becoming less and less sensitive to news around Sino-US trade talks, focusing instead on rapid technology advancement.
“The development of the trade war shows that China and the US cannot afford to enter a real big conflict,” he said.
“The competition between China and the US in AI big models will stimulate each other and eventually improve AI capabilities for both.”
Pan added that China’s growing economic resilience has also shielded its markets from volatility in Sino-US ties.
The US and China are expected to inch toward a managed trade mechanism for non-sensitive goods this week, with each side possibly identifying some US$30 billion worth of goods on which they could reduce tariffs and sell to each other without crossing national security red lines.
