Xi Jinping Calls for Regional Unity and Supply Chain Integration Amid Fragile US Truce

Gerik

Summary:

Following a tariff rollback deal with the U.S., President Xi Jinping urged Asia-Pacific nations to deepen cooperation, preserve supply chain integration, and resist decoupling during the APEC summit in South Korea...

Xi Urges Unity Amid Geopolitical Shifts and Economic Volatility

Just one day after securing a partial tariff rollback from U.S. President Donald Trump, Chinese President Xi Jinping delivered a call for multilateral cooperation at the Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Meeting. Without naming the U.S. directly, Xi emphasized that “the more turbulent the times, the more we must work together,” highlighting the urgency of collective action to stabilize regional supply chains and foster inclusive growth.

His comments followed a rare face-to-face meeting with Trump, the first since 2019 held in South Korea, during which the two sides agreed on a one-year suspension of certain tariffs and export controls. Though the agreement stopped short of a full trade deal, it signaled a cautious thaw in relations after months of escalatory rhetoric and trade measures.

Supply Chain Integration vs. Strategic Decoupling

At the heart of Xi’s address was a strong defense of integrated global supply chains. He urged member economies to “extend” rather than “disconnect” supply networks, countering growing calls from the United States and allies for reshoring or “friend-shoring” manufacturing to reduce dependence on China.

This positioning comes amid structural changes in global manufacturing, with U.S. policies increasingly targeting transshipments and urging companies to relocate production domestically. Xi, however, framed China’s economic strategy as complementary to global needs, claiming that China's “revitalization” aligns with Trump’s “Make America Great Again” vision, an attempt to reframe the narrative from confrontation to cooperation.

Yet, these messages underscore a deep divergence. While China promotes regional interdependence, Washington continues to emphasize economic security and domestic reindustrialization, backed by tariffs and reshoring incentives. This divergence presents a long-term tension that supply chains across the Asia-Pacific must navigate.

Strategic Vision Anchored in Global Openness and High-Tech Investment

Xi laid out five pillars of future cooperation: defending the multilateral trading system, creating open economic environments, stabilizing supply chains, promoting green and digital trade, and advancing inclusive development. These proposals aim to position China as a champion of globalization at a time when U.S. and European policies are becoming more protectionist.

China’s own outbound investment strategy reflects this shift. According to a Rhodium Group report, Chinese firms invested $15.4 billion across Asia in Q3 2025, the highest level since the pandemic. These investments increasingly focus on high-value sectors such as data centers, green energy, and battery materials. Xi’s emphasis on green and digital trade aligns with these trends and attempts to expand China’s influence across emerging technology ecosystems.

Economic Context: Manufacturing Stresses and Regional Realignment

Xi’s appeal for regional solidarity comes as China grapples with its own manufacturing downturn. October marked the seventh consecutive month of contraction in factory activity, underscoring fragility despite the trade truce. The PMI slipped to 49.0, with sharp drops in new orders and production, reinforcing that geopolitical agreements alone are not reversing structural headwinds.

Simultaneously, China’s trade ties have shifted. The Association of Southeast Asian Nations (ASEAN) has overtaken the EU to become China’s largest trading partner. This reorientation not only reflects efforts to diversify trade away from Western economies but also aligns with Xi’s rhetoric on Asia-Pacific unity.

Xi Jinping’s APEC remarks present a vision of regional integration and supply chain cooperation amid an increasingly fragmented global order. While the temporary U.S.-China tariff truce reduces immediate tensions, deep economic and strategic rifts remain. As the Asia-Pacific region becomes the central arena for geopolitical competition and manufacturing realignment, Xi’s call for openness will be tested against rising nationalism, investment protectionism, and shifting corporate risk calculus. The challenge going forward will be whether regional economies can reconcile strategic autonomy with the interdependence required for long-term resilience.

Source: CNBC

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