Asia
Investors see limited gains from Trump-Xi summit as Iran war risks cloud outlook
The focus on “strategic stability” at the summit between US President Donald Trump and Chinese President Xi Jinping is expected to ease geopolitical risks between China and the US from the perspective of Chinese markets. But limited progress on trade and the ongoing Iran war are likely to keep investor enthusiasm restrained.
Trump’s first visit to Beijing since 2017 ended on Friday without a major breakthrough on trade or any concrete progress toward ending the US-Israeli war against Iran that has rattled global markets for more than two months.
Although investor expectations for the summit had been limited, markets had hoped the talks could provide a roadmap for resolving the war, which has pushed up energy prices as turbulent negotiations between Washington and Tehran continue.
China’s yuan fell to its lowest level against the dollar in nearly two weeks on Monday as investor focus shifted away from the summit toward a global bond selloff triggered by inflation concerns and fresh signs of tension related to the Iran war.
Chinese equities traded largely flat on Monday after falling more than 1% on Friday, as a risk-off mood dominated global markets.
William Bratton, head of Asia-Pacific cash equity research at BNP Paribas, said the summit was unlikely to deliver tangible gains for equity investors in the short term, but that its longer-term implications for reducing geopolitical risk were positive.
“That should also alter investors’ perception of risk and encourage US capital to reassess the relative attractiveness of Chinese investment opportunities,” Bratton said.
“After all, we have seen US investors gradually adopt a more positive stance toward Chinese equities since the start of the year, and we expect that to continue as US-China bilateral relations stabilize, or perhaps more accurately, become more predictable,” he added.
Monday’s muted market reaction to the summit also followed data showing China’s economic growth lost momentum in April, with industrial output and retail sales coming in significantly below expectations.
Analysts at Capital Economics said the optimistic interpretation was that, although no major breakthrough had been achieved, the summit helped reinforce the trade truce and reduced the risk of renewed escalation in the near term.
“Trump’s invitation for Xi to visit the US in September also increases the likelihood that the two sides will get along over the coming months,” the analysts said in a note.
Investors had hoped the talks might help pave the way for a peace agreement in the Middle East. But markets remain cautious about renewed turbulence after China, the largest buyer of Iranian oil, gave no clear indication it would throw its weight behind the conflict.
Analysts said geopolitical differences between the two countries were clearly reflected in the opposing positions taken by Washington and Beijing on the Iran war and the Strait of Hormuz, through which roughly one-fifth of the world’s oil and liquefied natural gas normally passes.
Trump said Xi agreed that Tehran should reopen the strategic waterway, while Xi made no comment on his discussions with Trump regarding Iran. China’s Foreign Ministry described the conflict as one that “should never have happened and has no justification to continue.”
Charu Chanana, chief investment strategist at Saxo, said that without clear follow-up action on trade, Taiwan or the Iran conflict, the meeting risked being seen as a “non-event”: positive for sentiment, but insufficient to alter the market backdrop.
“This is where the risk still lies,” Chanana said. “Investors may be underpricing the possibility that the Iran conflict keeps oil prices elevated, inflation expectations sticky and bond yields higher for longer,” she added.
Separately, analysts said Taiwan would remain a key factor in US-China relations after Xi warned Trump that mishandling the island could lead to conflict between the two powers.
Sam Jochim, economist at Swiss private bank EFG International, said it would be significant whether Trump approves a $14 billion arms sale to Taiwan.
“Such a move has the potential to destabilize his relationship with Xi,” Jochim said.
Trump also introduced an element of uncertainty on Friday by saying he had not yet decided whether to proceed with a major arms sale to Taiwan.
The trade truce reached after a series of retaliatory escalations between the US and China is expected to expire later this year, and the lack of tariff clarity during the summit weighed on investor sentiment.
Even the agreement highlighted as the most significant tangible outcome of the talks disappointed investors: Boeing shares fell after Trump said on Thursday that China would buy 200 aircraft from the company, a figure far below analyst expectations.
Despite limited progress on trade, Nomura chief China economist Ting Lu described the two-day summit as an exercise in “economic and political risk containment” that delivered short-term stability for both leaders.
“The G2 powers have decided that if they must be rivals through the remainder of 2026, they will at least be predictable, transactional and tightly managed rivals,” Lu said, referring to a term Trump used for the pair in October.
Asia
Russia and China narrow space race gap with US, reports indicate
Russia and China are progressively narrowing the space gap with the US, according to an assessment by The Washington Post (WP). The newspaper reported that the technological superiority of the US in this domain is beginning to erode, noting that fresh advancements achieved by Moscow and Beijing could create risks for Washington.
The newspaper pointed to China’s recent progress as an example of this trend. In August, a Chinese aerospace company successfully landed a rocket’s first stage on Earth for the first time.
Previously, only US-based companies SpaceX and Blue Origin possessed this technology. The ability to reuse rocket stages significantly reduces launch costs.
The WP also drew attention to Russia’s Rassvet satellite system, which is planned to deliver internet connectivity from space.
The newspaper noted that this system could be utilised by the Russian military. According to the assessment in the report, the Rassvet system could provide Russia with capabilities comparable to those offered by SpaceX’s Starlink satellite network.
According to the newspaper, among the primary challenges facing the US are ageing launch pads and other space infrastructure. Modernising this infrastructure requires securing additional funding from the US Congress.
The WP further emphasised the necessity of streamlining commercial launch licensing procedures, which currently can take an extended period.
Observing that the US maintains its superiority for now thanks to a robust private space sector, the newspaper stated that Washington must increase launch frequency and invest in infrastructure renewals to preserve its leadership.
According to a May 2025 report by The Times, the US has begun sharing certain data on Russian and Chinese space operations with Britain and other members of the “Five Eyes” intelligence alliance.
This measure was taken in line with Washington’s concerns over Beijing’s advances in military space capabilities. In this context, allies were granted access to intelligence from Space Delta 9, the US Space Force unit that tracks Russian and Chinese satellites.
Russia and China, meanwhile, continue to pursue joint space projects. Russian President Vladimir Putin stated in April 2025 that Moscow and Beijing have “grand” and “magnificent” plans in this field.
In 2024, Russia ratified an agreement with China regarding the International Lunar Research Station, which is planned to be established on the lunar surface or in lunar orbit.
Former NASA Administrator Jim Bridenstine called on Russia, the US, and China in October 2025 to cooperate in space. Stating that the interests and activities of nations could intersect in space, Bridenstine said the parties could not operate alone.
Bridenstine also recalled that space cooperation between Moscow and Washington had commenced during the Cold War.
Asia
China-Nepal border flood leaves at least 160 dead, over 1,000 missing
A massive mudslide and flash flood struck the Gyirong Port area along the China-Nepal border on Wednesday, leaving at least 160 people dead on both sides of the frontier and more than 1,000 others missing. Search operations have been extended across both sides of the border.
According to the latest official information released during a press conference held by the Shigatse municipal government on Thursday morning, three fatalities have been confirmed on the Chinese side, whilst 558 people remain missing.
Two individuals were rescued alive. Following the expansion of search operations, the number of missing persons was revised upwards from an earlier figure of 265.
Chinese authorities have dispatched more than 1,500 personnel to the region, including firefighters, military troops, and engineering teams. Vice Premier Zhang Guoqing has also arrived at the scene to direct operations.
According to state broadcaster CCTV, a landslide dam lake has formed near the border crossing, complicating rescue efforts.
Nepal Police reported late Wednesday that 157 bodies had been recovered.
According to the Office of the Prime Minister of Nepal, the 484 missing tourists include 391 foreign nationals from at least 26 countries. These comprise 142 citizens from India, 47 from the US, 34 from Australia, 33 from the UK, and 24 from Canada.
Nepal Tourism Board spokesperson Sunil Sharma told the Associated Press that 133 of the missing tourists were Indian pilgrims.
The disaster struck Gyirong County in the Tibetan city of Shigatse at around 10:30 on Wednesday and originated on the Nepalese side.
The region is situated along an important pilgrimage route leading to Tibet’s sacred Mount Kailash and Lake Manasarovar. Particularly during this peak period of the year, hundreds of pilgrims from India and other countries visit the area.
Initial assessments by Nepalese authorities indicated that an earthquake may have triggered a collapse in the lower section of a glacier, releasing the destructive floodwaters.
Asia
India intel push on China risks dangerous miscalculation, study says
A Chinese scholar has warned that Indian intelligence agencies increasingly treating China’s routine activities as threats raises the risk that New Delhi could miscalculate and adopt “unilateral countermeasures” against Beijing.
According to Zhao Ruoxi, a researcher at the Macau University of Science and Technology, India stepped up its intelligence-gathering operations following the deterioration of relations with neighbouring China in recent years.
Zhao made the assessment in an article analysing Indian intelligence operations targeting China across the 2020–2026 period. The study was published in the 31 July issue of the Chinese-language Journal of Intelligence, issued by the Shaanxi Information Institute of Science and Technology, and reported by the South China Morning Post.
According to Zhao, China’s political and economic presence in South Asia, its emphasis on emerging technologies, and its naval activities in the Indian Ocean have been monitored more closely by India since a 2020 border clash.
In that clash in the Galwan Valley, 20 Indian and four Chinese soldiers were killed, dragging relations between the two countries to one of their lowest points in history.
Zhao noted that India has expanded its intelligence collection tools in recent years, drawing on space-based reconnaissance systems, drone surveillance, and cyber intelligence to establish a multi-agency network targeting China.
According to the article, India has also cooperated with the US and Middle Eastern nations to enhance its capacity to track Chinese naval operations in distant waters and exert informational pressure along Beijing’s maritime energy supply routes.
However, Zhao described India’s heavy reliance on foreign-sourced data as a “structural weakness”, arguing that it leaves New Delhi’s assessments of China vulnerable to the strategic agendas of third parties.
Zhao observed that while relations between Beijing and New Delhi began to improve in late 2024, India’s expanded intelligence activities directed at China have persisted.
The two countries took steps to mend ties after reaching an agreement in 2024 on resuming border patrols. Direct flights resumed after a five-year hiatus, Beijing once again permitted Indian pilgrims to visit the Tibet Autonomous Region, and India resumed issuing visas to Chinese tourists.
Last year, in another sign of easing tensions, Indian Prime Minister Narendra Modi visited China for the first time in seven years. In his meeting with Modi in Tianjin, Chinese President Xi Jinping said border issues should not define bilateral relations.
Following the reopening of the Lipulekh Pass in June, which Beijing viewed as a goodwill gesture, the two countries also resumed cross-border trade in August through the Himalayan passes of Nathu La and Shipki La.
In the article, Zhao stated that India is expected to ramp up technical surveillance in border areas, which will compel China to bolster its information security.
Zhao also warned that New Delhi could “systematically disrupt” Beijing’s diplomatic engagements with its South Asian neighbours, particularly its efforts to build regional trust and advance projects under the Belt and Road Initiative.
According to Zhao, the expansion of India’s intelligence operations against China heightens the risk of miscalculation, as routine Chinese activities are increasingly perceived as threats.
“As a result, the likelihood of triggering unilateral countermeasures increases,” Zhao assessed.
Zhao said China must make its strategic messaging more effective and reinforce communication with South Asian states and Indian Ocean littoral nations to counter this pressure.
-
Interview2 weeks agoDaniel Davis warns US strategy fails against Iranian defense grid
-
Diplomacy2 weeks agoErdogan blocked CIA-Mossad plan for armed Kurdish uprising in Iran, report says
-
America2 weeks agoAIPAC super PAC pours millions into key Democratic primary races
-
Europe2 weeks agoMarine Le Pen plans French constitutional referendum on immigration
-
Middle East2 weeks agoUS considers land blockade on Iran involving Türkiye and neighbours
-
Diplomacy2 weeks agoThe two terrorists: Britain jails tweets while the West crowns al-Qaeda’s man in Damascus
-
America2 weeks agoUS-Brazil rift widens over proposed sanctions and trade tariffs
-
Europe2 weeks agoGreece secures EU sanctions carve-out for billionaire’s LNG fleet
