What’s at stake in the countdown to the Trump-Xi meeting

This report is from this week’s CNBC’s The China Connection newsletter, which brings you insights and analysis on what’s driving the world’s second-largest economy. You can subscribe here.

First up is an annual meeting of China’s parliament that kicks off next Thursday. That’s when Chinese Premier Li Qiang will announce the year’s growth targets and stimulus plans — against renewed tariff uncertainty.

All eyes, however, will be on U.S. President Donald Trump‘s meeting with Chinese President Xi Jinping. The White House said the visit will happen from March 31 to April 2, although China has yet to confirm the dates.

Tariff cuts will be in focus. The two leaders could send a positive signal by publishing whitelists that support cross-border investment, said Hai Zhao, a director of international political studies at the Chinese Academy of Social Sciences, a state-affiliated think tank.

Zhao also hopes the U.S. and China can agree on guidelines that can prevent the relationship from being rocked by short-term developments.

Time, however, is tight for both sides to refine negotiating points. China’s parliamentary meeting is likely to end only in the second week of March, followed by a state-organized “China Development Forum” which typically draws executives from U.S. and other foreign companies.

If Trump’s trip proceeds, it will be the first visit to China by a sitting U.S. president since 2017.

The U.S. tariff leverage calculus on Beijing has shifted in the years following that trip. The U.S. share of China’s overall exports has fallen sharply from 18% at the end of 2017 to 9.6% at the end of last year.

After a weekend of back-and-forth from Washington on global tariff rates, China’s Commerce Ministry broke its holiday silence with a statement Monday that urged the U.S. to cancel its tariffs.

“For companies, the [U.S. Supreme Court tariff] ruling renews trade uncertainty as the stop-and-go policy will prevail and complicate inventory management,” Ludovic Subran, chief investment officer and chief economist at Allianz Research, said in a co-authored report Monday.

For now, “the Global South and China now emerge as the biggest winners,” Allianz Research said.

China won’t change its demand for lower U.S. tariffs and hopes for a more stable and predictable tariff regime, Zhao said. He added that China isn’t seeking to maximize its trade surplus with the world and may need to adjust its relations with other countries to address the economic impact.

Interconnected economies

China’s top diplomat Wang Yi typically fields questions during the roughly week-long parliamentary session and could shed light on Beijing’s stance on global trade.

But…