Xi’s Quiet Waiting Game for Trump: Beijing Signals Leverage on Iran, AI, and Taiwan

On January 20, 2025, Donald Trump began a second term as U.S. president, and China’s Xi Jinping responded with a carefully staged diplomatic gesture by sending Han Zheng, China’s vice president, to the inauguration ceremony. The same day, the articles indicate China also took a separate, more consequential action through the company DeepSee, implying a parallel track beyond ceremonial signaling. A second piece frames Xi’s posture ahead of Trump’s upcoming trip to Beijing as “sitting and silent,” portraying the Chinese leader as deliberately waiting for Trump’s arrival next week. A third article, quoting Mikko Huotari of the Mercator Institute for China Studies, argues that the stakes are unusually high for both leaders—covering the Iran war, the race for AI leadership, and the future of Taiwan—while asserting that Beijing has the better cards. Geopolitically, the cluster points to a U.S.-China contest in which China is attempting to shape outcomes across multiple theaters simultaneously rather than trading concessions in a single domain. Iran is highlighted as a key variable, suggesting that Beijing may seek to influence Washington’s posture toward Tehran while preserving room for its own strategic autonomy. The AI “crown” framing signals that technology competition is not a side issue but a core lever for long-term power, industrial policy, and standards-setting. Taiwan’s future is treated as a central risk channel, meaning any perceived imbalance in negotiation leverage could affect deterrence calculations and crisis stability. Overall, the balance of power implied by the expert view favors China’s negotiating position, while the U.S. faces the challenge of coordinating across security, technology, and alliance management under a high-expectations summit. Market and economic implications flow from the same three pillars: Iran-related risk, AI-driven industrial competition, and Taiwan-linked supply-chain exposure. If the Iran war remains a live variable, energy and shipping risk premia can rise quickly, pressuring oil-linked instruments and increasing volatility in freight and insurance costs, especially for routes sensitive to Middle East disruptions. The AI leadership race tends to concentrate attention on semiconductors, cloud infrastructure, and data-center capex, which can move equity sentiment toward companies positioned for frontier-model compute and AI networking. Taiwan’s role in advanced chip manufacturing adds a tail-risk premium to technology supply chains, potentially affecting semiconductor ETFs and risk-sensitive currencies through global risk-on/risk-off swings. While the articles do not provide numeric forecasts, the direction of impact is toward higher volatility and repricing of strategic tech and energy risk ahead of the Beijing summit. What to watch next is the operational content behind the “two-track” signaling: whether China’s actions via DeepSee translate into concrete policy, regulatory, or technology outcomes tied to U.S. demands. The next week’s Beijing meeting is the immediate trigger, but the real escalation/de-escalation points will be visible in any U.S.-China language on Iran deconfliction, AI export controls, and Taiwan-related red lines. Key indicators include changes in U.S. and Chinese statements on sanctions enforcement or humanitarian carve-outs related to Iran, shifts in AI governance or cross-border technology restrictions, and any measurable movement in Taiwan-related military signaling or diplomatic messaging. A de-escalation path would show coordinated messaging that narrows uncertainty on Iran and reduces crisis rhetoric around Taiwan, while escalation would be signaled by sharper deterrence language and tighter technology restrictions. The timeline implied by the articles centers on the summit week, with follow-on market repricing likely to persist through subsequent days as investors digest whether “better cards” become enforceable commitments.

Geopolitical Implications

• 01

  China is attempting to convert diplomatic timing into negotiating leverage across security (Iran), technology (AI standards/export controls), and deterrence (Taiwan).

• 02

  Cross-domain linkage increases crisis instability: progress on one issue could be offset by hardening positions on another, complicating U.S. alliance and sanctions management.

• 03

  If Beijing’s leverage narrative holds, it may strengthen China’s bargaining position in future technology and regional security frameworks.

Key Signals

• —Any concrete U.S.-China language on Iran deconfliction, sanctions enforcement, or humanitarian carve-outs.
• —Shifts in AI governance: export controls, model access, compute/semiconductor restrictions, and standards-setting cooperation or divergence.
• —Taiwan-related messaging changes (official statements, military posture cues, or diplomatic signaling) in the days surrounding the summit.
• —Follow-through from DeepSee-related actions into measurable policy or technology outcomes.