BREAKINGVIEWS-Trump-Xi meeting will be casualty of Iran strikes

By Ka Sing Chan

HONG KONG, March 3 (Reuters Breakingviews) - Xi Jinping is in a tricky position. The optics of China's president rolling out the red carpet for a U.S. counterpart who just ordered strikes that killed Iran's leader weeks after authorising the capture of Venezuela's are not particularly appealing. With Beijing's strategic partners under siege, a scheduled meeting with Donald Trump in a month will probably be a casualty of the military attacks.

A fragile $560 billion trade détente between the two economic powers hangs in the balance. Trump's "Liberation Day" and Xi's fierce retaliation rattled investors worldwide in April. Calm was restored after the two sides de-escalated, and agreed in October to put reciprocal tariffs and export controls on hold for a year, boosting anticipation for a negotiated truce and Chinese stocks in the process.

The latest military aggression alters the diplomatic dynamics and punctures the calm. Hong Kong's Hang Seng Index .HSI, a proxy for overseas sentiment about China, had rebounded by more than 30% from a year-ago nadir. It dipped nearly 2% on Monday after the weekend news that Iran's supreme leader, Ayatollah Ali Khamenei, and other senior officials were the targets of fatal U.S.-Israeli attacks.

U.S. Treasury Secretary Scott Bessent has said the relationship with China reached a “very good equilibrium”, and that Trump and Xi could even meet face-to-face as many as four times this year, starting with a three-day visit on the calendar for March 31. Beijing has yet to confirm the meeting, however, mindful that its lavish reception for Trump in 2017 was followed swiftly by his first tariff war. Washington’s campaigns to topple regimes in Tehran and Caracas complicate matters. Both are major oil suppliers to China while playing important roles in yuan internationalisation and Xi’s signature Belt and Road infrastructure development policy.

For now, bilateral relations are more likely to fray than break. Working-level officials are still laying the groundwork for a potential summit, despite licensing agreements being among the few deliverables on the table, the South China Morning Post reported on Tuesday. For symbolic purposes at a minimum, Xi will be reluctant to host Trump when he is projecting strength. Moreover, the events in Iran and Venezuela suggest China’s diplomatic alignments cannot shield its partners. If the scheduled set-piece with the United States comes undone, the protracted strain will be felt far and wide.

CONTEXT NEWS

Chinese officials condemned U.S. and Israeli attacks on Iran, with Foreign Minister Wang Yi telling state-run Xinhua news agency on March 1 that the “blatant killing of a sovereign leader” and the incitement of regime change were “unacceptable”.

The military strikes on February 28 killed Iran’s supreme leader, Ayatollah Ali Khamenei, and other senior officials.