Trump’s Removal of Another Xi Friend Complicates Planned Summit

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(Bloomberg) — One month before President Xi Jinping and Donald Trump are set to convene at a much-touted summit in China, the US leader’s toppling of another friend of China risks stoking tensions between the world’s biggest economies.

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After US and Israeli military strikes on Iran wiped out the Islamic Republic’s Supreme Leader, Chinese Foreign Minister Wang Yi on Sunday called it “unacceptable to openly kill the leader of a sovereign country and institute regime change.” Speaking by phone with his Russian counterpart, Wang warned that the US president risked driving the Middle East into the “abyss.”

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Condemnation of Washington from China’s top diplomat stands out during a delicate period when officials on both sides are trying to steady relations before Trump arrives in Beijing on March 31. Complicating that task, the Republican has ousted two leaders with ties to Beijing in quick succession this year, after the US in January snatched Venezuela’s Nicolás Maduro from his Caracas home. 

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While Iran and Venezuela aren’t considered important trade or defense partners for China, Trump’s escalating campaign of regime change raises the question of whether the US president’s next target could be a world leader with much closer links to Xi.

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“How can Xi feel everything is normal and alright and be prepared to welcome Trump to visit in happy mood?” said George Chen, partner at The Asia Group. “Investors should manage their expectation on what Trump can achieve for his China trip — if he still goes.”

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Instability in Iran will likely further entrench China’s relations with Russia, as Xi seeks to lock down oil supplies, Chen added. Both countries over the weekend called an emergency meeting of the UN Security Council — of which they are permanent members alongside the US, UK and France — citing what Moscow branded an “unprovoked act of armed aggression by the United States.”

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Trump’s strikes are destabilizing the global economy by roiling a region critical to energy supplies. Ships are avoiding the Strait of Hormuz, which handles about a quarter of the world’s seaborne oil trade. China buys about 13.4% of its seaborne crude from Iran, meaning a prolonged disruption could sting Chinese firms grappling with a property crash and weak consumer spending at home.

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Adding to the chaos, airspace in the Middle East has been disrupted as the conflict spreads to half a dozen countries. Projectiles are still flying, resulting in a hit on Dubai’s main airport — the world’s busiest aviation hub. 

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“China will likely bank on the pressure that an extended blockade of the Strait of Hormuz would put on the global economy to ensure that oil will resume flowing soon,” said Jeremy Chan, a senior Eurasia Group analyst and former US diplomat, who added that Trump’s military endeavors will put a dampener on his meeting with Xi. 

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“This should further lower expectations of meaningful outcomes from the Trump-Xi summit, although the meeting is still likely to go forward,” he added.