Xi’s summit diplomacy reveals an increasingly confident China

China is no longer a rising power seeking to accommodate itself to the existing international system. It is increasingly acting like a state that believes history has turned in its favor. Beijing is confident it can shape the rules of the next era.

This change has been on full display in recent weeks. Beijing hosted a summit with President Donald Trump on May 14-15 that defined the U.S.-China relationship not as one between a hegemon and a challenger, but as one between two powers managing the world’s most important strategic rivalry. Chinese President Xi Jinping then directly engaged in high-level diplomacy with Russia and other strategically aligned states, reinforcing the image of a confident China operating at the center of an emerging geopolitical network.

The sequencing was deliberate. Beijing was signaling that stabilization with Washington and deeper coordination with revisionist partners are not contradictory objectives. China increasingly believes it can avoid direct confrontation with the United States while working with others to tip the balance of power in its favor.

The most important outcome of the Trump-Xi summit was not an individual deal or tariff arrangement; it was the apparent convergence around the idea of ​​strategic stabilization. Chinese state media described the meeting as advancing a “constructive Sino-U.S. relationship of strategic stability,” language that sounds reassuring but in practice reflects that Washington and Beijing increasingly appear to accept that they are long-term strategic competitors. The key now is to manage this competition.

For Xi, this framework is attractive because it saves time. China is grappling with major domestic challenges, including debt, demographics and slowing growth. Strategic stabilization reduces the risk of U.S. disruption as Beijing continues to strengthen its industrial base, military capabilities, and technological autonomy.

But Washington might also be more comfortable with that balance than many think. The Trump administration’s National Defense Strategy 2026 outlines its intention to seek “a favorable balance of military power in the Indo-Pacific region,” not to “dominate, humiliate, or strangle China” but to ensure that China cannot dominate the United States or its allies. Washington is ready to compete with Beijing, provided it maintains a favorable balance of power in Asia.

The problem, of course, is that Beijing and Washington have very different views on what constitutes a favorable balance.

For the United States and its allies, this means preventing Chinese regional domination and preserving an open Indo-Pacific. For Beijing, this likely means a steady weakening of U.S. alliance structures, restriction of Western military access, and expansion of Chinese influence until the regional order becomes more accommodating to Chinese interests.

Xi’s rhetoric at the summit reflected this growing confidence. His warnings about Taiwan and references to the decline of the West (including invocations of the Thucydides Trap) suggest that Chinese leaders no longer speak cautiously about competition. Beijing once sought to avoid open rivalry with Washington, fearing that premature confrontation could derail China’s rise. Today, China appears increasingly comfortable recognizing that competition is sustainable and inevitable.

This does not mean that Beijing seeks conflict. In many ways, China likely views the current strategic stability between Beijing and Washington as a favorable condition enabling continued accumulation of national power and a future in which the East is booming and the West is declining.

This is why the deeper structural problems in Sino-US relations will remain unresolved despite the summits and temporary détente. Narrow trade deals on agricultural products or tariffs do little to change the trajectory of competition. Beijing has not renounced its industrial policies, state subsidies, or efforts to dominate critical supply chains, nor has it abandoned the idea that economic interdependence can be weaponized to gain strategic advantage.

Despite complaints from many countries, China continues to double its manufacturing growth and exports. Industrial depth, technological self-sufficiency and supply chain influence remain central to Beijing’s domestic and geopolitical strategies.

China is also expanding its military, political and security activities throughout the Indo-Pacific region. Beijing does not compartmentalize governance. Rather, it integrates economic engagement, military activities, and elite development into a broader strategic campaign.

For Australia, these developments have major implications. Canberra should expect increased Chinese activity in the Indo-Pacific region in the coming years. The next phase of strategic competition will take place within a deeply globalized system where economic integration coexists with geopolitical rivalry.

This reality is at the center of the next iteration of the ASPI program Pressure points project, which will be released on June 16. The report details how China is expanding its military and security footprint in the region. It forecasts Beijing’s likely activities in the Indian and Pacific Oceans and illustrates how they fit into a broader campaign designed to complicate allied operations, weaken coalitions and gradually shift the regional balance of power in China’s favor.

Australia is already starting to talk more openly about these challenges. Defense Secretary Richard Marles has adopted tougher language on coercion and regional security, and the latest National Defense Strategy makes clear that the United States is essential to maintaining an effective balance of power in the Indo-Pacific region.

But China believes that time is on its side. Beijing will take advantage of this period of stabilization to strengthen its position in the long competition to come. The challenge for Australia and its partners is to ensure that they do not confuse temporary balance with lasting strategic resolution.