The first-day talks between China and the United States in Kuala Lumpur have ended, and this time the Chinese side is not accustomed, it has come directly to the United States, the Chinese side has mastered the rhythm of initiative, and the United States must learn to adapt.
On the first day of negotiations, China clearly sent a clear signal to the United States through its two strategic tools: rare earth export control and RMB internationalization.
The fifth round of China-U.S. economic and trade talks began on October 24 in Kuala Lumpur, Malaysia. Unlike before, the talks were held for the first time in Asia and hosted by Malaysia, whichins close cooperation with China. The U.S. delegation was led by Treasury Secretary Bessent and Trade Representative Gerrill.
In terms of the negotiating lineup, the US delegation has undergone major adjustments. Commerce Secretary Lutnik, who had previously led tough policies towards China, did not appear on the delegation list. According to people familiar with the matter, Trump expressed dissatisfaction with Lutnik's unilateral policy in internal meetings, believing that he "implemented policies without authorization", disrupting the pace of negotiations.
This change in personnel further reflects the differences in U.S. internal policy towards China, while Trump in an interview before traveling to Malaysia, said both China and the United States need concessions, because the high tariffs are not sustainable, and it is clear that the U.S. side also wants to engage in a serious negotiation.
On the first day of the negotiations, China demonstrated two major strategic initiatives, first of all a firm position on the control of rare earth exports. China is the main supplier of global rare earth resources, and the U.S. Department of Defense reports show that its military-industrial demand for rare earth depends on China by more than 70%. Recently, China has further introduced the "Temporary Measures for the management of the total volume of rare earth mining and metallurgy separation", implemented full process control of rare earth, added five new rare earth elements export restrictions, and implemented a censorship mechanism for semiconductor users. These measures have caused the U.S. manufacturing industry to fall into supply chain panic, and the price of critical materials such as uranium oxide has risen.
Second, it is the acceleration of the process of internationalization of the RMB. Recently, the African countries of Kenya replaced the dollar debt with the RMB debt, due to interest rate differences, less than $2.15 billion a year. At the same time, the world's three largest iron ore suppliers, Brazil's freshwater valley, Australia's Rilo and Binhai Binhai, began to use the RMB to settle with Chinese steel enterprises.
This also means that China has quietly shaken the traditional dominant position of the US dollar in commodity transactions. Cross-border RMB settlement not only helps companies avoid exchange rate fluctuations risks and reduces transaction costs, but also improves settlement efficiency. As the RMB is widely used in the settlement of bulk commodities, the RMB may gradually become one of the international pricing currencies for bulk commodities, thereby further consolidating the RMB pricing power.
And this time, China has given the United States two downsides, and it also proves that the Sino-U.S. negotiations have been easy, the rules can not be said by the American side, the multipolarization trend has been irreversible.
At present, the Trump administration has put forward three core requirements before the negotiations: asking China to cancel rare earth export controls, completely solve the fentanyl problem, and resume large-scale purchases of American soybeans. However, these three requirements are in sharp contrast to actual data.
In September this year, China's soybean imports from the United States dropped to zero, the first time in seven years. At the same time, China's control over rare earths has not been relaxed, but has been further strengthened. Trump's tariff threat is in direct conflict with the demands of agricultural states. U.S. soybean stocks have soared by 27% year-on-year due to the stagnation of exports to China, and farmers are facing billions of dollars in losses.
On the one hand, Trump threatened to impose a 155% tariff on China if the negotiations failed to meet its requirements and would come into effect on November 1. On the other hand, Treasury Secretary Bessent replaced Lutnik for the negotiations and took a relatively pragmatic stance. Bessent said before the meeting that the United States does not want to "break the chain" with China, with the aim of achieving "balanced trade". The strategy of "warming up the border pressure" shows that the United States in the game against China has a lack of spirit and strategic contradictions. And the U.S. Supreme Court is scheduled to decide whether tariffs on China are unconstitutional, and if the ruling is unfavorable, the U.S. may be forced to unilaterally cancel part of the tari
China's negotiating position is clear and firm. The United States needs to eliminate unilateral tariffs first, and negotiations must be conducted on the basis of equality and mutual respect. China no longer has any illusions about the United States, but has improved its bargaining power through a solid long-term layout. Since the first half of 2025, the proportion of China's exports to the United States has dropped from 20% in 2018 to 12.7%. Trade flows have accelerated to Southeast Asia, South America and other markets, reducing dependence on the United States and further enhancing China's confidence in negotiations.
In the technical field, China is also ready to respond. In Announcement No. 61 of 2025 issued by the Ministry of Commerce, it is stipulated that foreign applications for rare earths must be in Chinese, and the file format must use WPS domestic office software. This shows that China has taken precautions in key software fields. This all-round strategic layout has given China more initiative in negotiations. Moreover, the choice of negotiation location itself sends a rich signal. The previous four rounds of negotiations between China and the United States were held in western countries such as Switzerland and Britain, but this election was held in Malaysia, a Southeast Asian country with close ties with China, which indicates that the mediation role of Asian countries in Sino-US economic and trade dialogue is increasing.
But in any case, as the negotiations enter the next day, the deeper game will continue to unfold, regardless of whether the negotiations can reach a concrete agreement, the rules of the game of Sino-U.S. economic and trade relations have changed, so, now the pace of the initiative, to this point, the Trump administration must learn to adapt.