US-China ties expected to stabilise in 2026, says WEF panel

SINGAPORE - First was the claim that China had no active wind farms and that it was making a fortune selling wind turbines to “stupid people”.

Then came assertions of American dominance in artificial intelligence (AI) and Washington’s desire to deny Beijing a similar foothold in cryptocurrency.

But apart from these broadsides – as well as subsequent praise for his Chinese counterpart Xi Jinping – there was little overt mention of the US’ biggest strategic rival during

President Donald Trump’s lengthy, freewheeling address

to the annual World Economic Forum (WEF) in Davos, Switzerland, on Jan 21.

That China featured so sparingly in Mr Trump’s remarks was a subject of discussion by a panel of scholars and observers at a session following his speech that was moderated by The Straits Times’ editor Jaime Ho.

Giving their take on US-China ties, the panellists expressed optimism the bilateral relationship will stabilise in 2026 after a rocky 2025 marked by a bruising trade war.

But where things between two superpowers will end up in the long run remains unclear, with technology and Taiwan singled out as key flashpoints.

Parsing the references to China in Mr Trump’s address, which focused largely on Greenland and the US’ ties with Europe, Dr Zhao Hai said they exemplified the current problems between the two countries.

The director for the international politics programme at the Chinese Academy of Social Sciences’ National Institute for Global Strategy said Mr Trump’s spurious claims about China’s wind power generation are symbolic of the general misperception that the US has of contemporary China.

At the same time, he added, the American leader’s comments about US pushing Beijing out of AI and crypto markets reflect Washington’s zero-sum stance towards competition with China.

Dr Zhao also pointed out that while Mr Trump had praised Mr Xi, he failed to mention any specifics on how the leaders could cooperate.

“Other than claims of a personal close relationship, there is no concrete agenda of cooperating with China,” the scholar said.

Still, he said that hopes are high for steady ties in the light of a

planned visit by Mr Trump to China in April

, as well as future opportunities for dialogue between the two leaders at the Asia-Pacific Economic Cooperation summit in Shenzhen in November and the December Group of 20 summit in Miami.

Dr Zhao added: “Hopefully, this (continuing) dialogue between the two top leaders will maintain at least the stability of the bilateral relationship. And, on top of that, we can improve our strategic reassurance and have more trust between the two countries.”

Harvard University’s Professor Graham Allison noted the contrast between Mr Trump’s praise for Mr Xi and his negativity towards French President Emmanuel Macron and Canadian Prime Minister Mark Carney.

Mr Trump had

mocked the French leader

for the aviator sunglasses the latter wore the day before at Davos, and taken digs at Mr Carney, saying “Canada lives because of the United States”.

Pointing to the attempt by Mr Trump to crush China with high tariffs in 2025 and Beijing’s response of

restricting the exports of rare earths to the US

, Prof Allison said there is a realisation in Washington that China has become a full-scale economic peer that cannot be bullied.

This mutual deterrence in which each side has the ability to do significant harm to the other, he said, has a stabilising effect.

University of Southern California law professor Angela Zhang agreed that both the US and China want stability in their relationship.

“America is dealing with the midterm election. All eyes are on affordability, fighting inflation. China is still struggling with economic slowdown (and) wants to address deflation. So, one side wants cheaper imports. The other side wants more exports. So, you definitely see room for cooperation there,” she said.

Former Australian prime minister and Australia’s outgoing US ambassador Kevin Rudd, for his part, said challenges remain on how to manage this relationship of strategic competition, particularly where the two sides’ interests intersect, including on tariffs, technology and Taiwan.

“What I see underneath the Chinese posture towards not only the April summit, but more generally in the status of US-China relations, is unprecedented levels of Chinese self-confidence,” Mr Rudd said.

“So, whereas China is in search of a stabilisation arrangement, it actually, in its own internal political literature, believes it is prevailing in this competition at present,” he added.

US Democratic Senator Christopher Coons described US-China ties as “tense and difficult”, attributing this to the fundamentally different political systems and stages of development of the two powers. He noted the investments made by the US and China to modernise their respective military platforms and urged that more be done to avoid conflict and accidents in the Pacific and the South China Sea.

“It is clear that there is constant tension and risks for misunderstandings and mistakes, and there aren’t enough lines of communication between our militaries. There aren’t enough lines of understanding between our political leadership,” he added.

Mr Coons also flagged

AI as a pressing issue

, noting that the US advantages in chip design and manufacturing make Taiwan “doubly important”. The self-governing island produces 90 per cent of the world’s most advanced semiconductors that are essential for advanced computing and AI.

Dr Zhao, meanwhile, pushed back against Mr Coons’ characterisation of Chinese aggression in the South China Sea, saying instead that China is challenged in the region.

He added that any strategic reassurance by China and the US on Taiwan and the South China Sea comes with the pre-condition that current and potential agreements are not undermined.

Dr Zhao also noted that the Taiwan issue is not comparable to the

US capture of Venezuelan leader Nicolas Maduro

or Mr Trump’s desire to take ownership of Greenland because “Taiwan is a part of China”.

“This is not a separate entity, separate sovereignty issue,” he said.

The panel agreed on the need for a framework or mechanisms to manage US-China ties and the core interests on both sides, and allow the two powers to work together.

“Otherwise, it’s like rolling the dice each morning and hoping it turns out okay by midnight,” Mr Rudd said.