While the G7 countries are following the United States to put pressure on China, China suddenly changed its mind and expressed its willingness to negotiate with the United States.

Does this show that China is "afraid" in the face of pressure from G7? Not so, what is the truth?

On the morning of October 18, the Sino-U.S. economic and trade team completed a video call, and the negotiation location was set in Malaysia.

The past few rounds of negotiations have been in Europe, with the United States leading the pace. This time we chose Asia, which is closer to China and further away from the United States.

Malaysia is an important partner of China in ASEAN and a key node of "the belt and road initiative".

China has chosen Malaysia, on the one hand, for geographical convenience, and on the other hand, it is also sending a signal that the Chinese-US competition should not only be between Washington and Brussels.

China wants to bring this negotiation back into the Asian context. More importantly, Malaysia has long maintained neutrality between China and the United States. It has military cooperation with the United States and close economic and trade relations with China.

China¡¯s choice of such a third-party venue emphasizes the ¡°balance¡± of the dialogue. This negotiation has roughly four aspects:

First, the United States wants to lower tariffs on Chinese goods, and now the tariff rate of more than 50 percent is too high, the Chinese side may respond with the purchase of soybeans and Boeing aircraft.

Second, the U.S. needs to loosen restrictions on technology exports, especially in key areas such as chips, design software, and aircraft engines ¨C if you loosen the chips, I loosen the rare earth.

The third is to reduce the blacklist of export control for Chinese enterprises, especially to cancel the "penetrating" rule of joint sitting, so that innocent enterprises can't suffer; Correspondingly, China may also slightly adjust the proportion of rare earth exports.

Fourth, the United States has to withdraw or reduce the "port fees" it charges on China ships. This is a bit too harsh, and China may cooperate in adjusting port fees accordingly.

Overall, the United States basically responds passively, while China is more proactive.

Meanwhile, EU Economic Commissioner Dombrovsky also voiced the rumor that the G7 will jointly develop short-term measures to reduce China¡¯s dependence on rare earth.

This looks like a collective action of "six countries besiege one country." But is this really the case?

German Finance Minister Klinbeier expressed different opinions at the meeting.

He said that Europe should not "hurt one thousand enemies and eight hundred itself" in its policy of dealing with China, and should avoid backlash on its own economy.

French President Macron mentioned in a speech in Brussels earlier that Europe should maintain strategic autonomy and not blindly get involved in Sino-US confrontation.

Many EU countries are deeply dependent on China in new energy, automotive, chemical and other fields.

It is precisely because of this that China has taken into account that it sent a signal before negotiations with the United States: "I can talk, but you must first think clearly internally whether you want to continue with the United States."

China's first card is agriculture.

In September this year, China did not import soybeans from the United States.This is the first time China's soybean imports to the United States have dropped to zero since November 2018.

Data from the U.S. Department of Agriculture shows that China is the largest buyer of U.S. soybean exports, accounting for more than 60 percent.

Soybean exports broke down, farmers 'interests were damaged, and political pressure was directly transmitted to the White House.

Reuters pointed out that if there is no breakthrough in the next trade negotiations between the United States and China, American farmers may face billions of dollars in losses as China continues to purchase soybeans from South America.

The American Domestic Agricultural Association quickly voiced, saying that "agriculture should not be a victim of trade wars". Clearing soybeans is not about the economy, but about votes.

The second card is rare earth.

In early October, China once again increased its export controls on rare earths. The Ministry of Commerce issued two announcements in succession to implement export controls on some overseas rare earth-related items and related technologies containing Chinese ingredients.

China is not the only country with rare earth reserves in the world, but it is the only country that can achieve large-scale, low-cost and environmentally friendly refining. More than 90% of the world's rare earth refining depends on China.

It is pointed out that Australia's rare earth reserves rank fourth in the world. In recent years, Australia has been trying to position itself as an alternative source of critical mineral supply to China.

As early as the Biden era, the United States tried to find alternative solutions to support resource countries such as Australia and Canada to develop rare earth projects. But it hasn't improved.

The reason is simple: poor refining technology, high environmental protection costs, low market capability.This high-tone G7 hit, seems to be huge, and the reality is insufficient.

The third card is the chip.

Shortly after the US-China call, several Chinese AI companies suspended NVIDIA chip procurement.

According to market reports, China has launched the so-called ¡°B Plan¡± ¨C a market restriction on U.S. chip giants and accelerated domestic replacement.

Companies such as Nvidia, AMD, and Qualcomm account for more than 30% of revenue in the China market. In particular, Nvidia has a large number of users of its AI chips A100 and H100 in the China market.

Once the market entrance is closed, the financial statements of these American companies will be directly impacted. And China is not "talking on paper" in terms of chip replacement.

In the third quarter of 2025, Huawei "Lift 910B" will be officially commercially available on a large scale.

The AI chip has been deployed in several domestic data centers for core tasks such as big model training and urban computing.

Huawei, Cambrian, Zhongke Brain and other companies have also received policy and capital support and begun to deploy a large-scale domestic AI hardware ecosystem.

According to statistics from the China Semiconductor Industry Association, in the first nine months of 2025, the domestic substitution rate in the domestic AI chip market increased by more than 12%.

China responded to the technical blockade with actions. If the United States bans high-end chips, China bans the market.

The United States wants to use high tariffs to force China to make concessions. While significantly increasing taxes, it wants to suppress China's manufacturing industry, and at the same time it removes some trade restrictions.

Starting from November 1, the United States will impose a 25% tariff on medium and heavy trucks imported from all countries. Although it is said to be aimed at the world in lip service, it is actually more targeted at China.

China is the world's largest producer of heavy trucks, with exports of 15.56 million vehicles in the first half of this year, of which exports to the United States account for about 12%.

However, Liu Pengyu, spokesman of the Chinese Embassy in the United States, once stated: We are not afraid of fighting; Talk, anytime. China did not shy away from negotiations, but it did not back down.

And this Malaysian negotiations, China's strategy has been very clear: not to find things, not to fear things, rare earth, agricultural products, chip three cards alternate, understand the rhythm, and strive to take the initiative.

But China still hopes to resolve its differences with the United States through dialogue.