China's Fragile Economy Complicates Xi's Trump Talks Strategy

• China faces a significant domestic economic dilemma with slowing industrial output, weak retail sales, and sagging investment ahead of high-stakes talks with US President Donald Trump.
• Despite strong export figures and a record trade surplus, internal consumption remains weak, driven by a prolonged property downturn and low consumer confidence.
• Policymakers are caught between the need to stabilize the economy and the risks of aggressive fiscal stimulus or challenging structural reforms.
• China's reliance on exports to offset domestic weakness complicates Xi's negotiating position on trade, technology restrictions, and Taiwan.
• The domestic economic slowdown may compel Xi to adopt a more cautious diplomatic stance, influencing global economic dynamics and Sino-US relations.

Why It Matters: China's weak domestic economy is a critical factor shaping Xi's strategy for upcoming Trump talks.