WSJ’s Ip argues China’s economic position is weaker than analysts maintain
President Donald Trump and Chinese leader Xi Jinping held bilateral talks in Washington on September 25, 2026, where they tackled tariffs, trade agreements, the Iran war, Taiwan, and artificial-intelligence safety. In remarks at the White House’s Grand Foyer, Trump heralded the “tremendous strides” he and Xi had made and noted discussions on national security and technology issues. “The decision we make in these areas today can promote peace and prosperity for decades and decades to come,” Trump said.
Xi, speaking through a translator, responded: “I am ready to work with you to steer the giant ship of China-U.S. relations on a steady course toward the future.”
Trump, facing midterm elections in November, is “largely perceived to be meeting from a position of weakness,” the Wall Street Journal’s CFO Journal newsletter reported. But WSJ columnist Greg Ip argued the conventional view is flawed, contending that Xi’s position is not as strong as some analysts maintain.
“With China, you need to apply the 80-20 rule,” Ip wrote. “The 20% of the economy Americans see (and worry about)—the advanced manufacturing, the EVs, the AI—is doing great. The other 80% is doing lousy.”
Ip pointed to several indicators of Chinese economic weakness. Retail sales, which he called a key barometer of household welfare, are “growing in pretty much every big developed economy. In China, they’re shrinking,” he wrote. Fixed-asset investment outside high tech is shrinking. The population is declining. Underemployment is pervasive. China relies disproportionately on exports to prop up growth, which gives trading partners like the US leverage if they know how to use it.
The WSJ identified three outcomes for business leaders to watch from the summit.
First, on bilateral trade: would the trade truce be extended so neither side raises tariffs or restricts rare-earth supplies? Treasury Secretary Scott Bessent said it would be.
Second, on Iran and Ukraine: would China, a key source of support to both Russia and Iran, help or hinder US efforts in both theaters?
Third, on AI: “You can’t have any sort of global agreement to regulate AI without the U.S. and China, home to the vast majority of consequential AI labs and researchers,” the WSJ wrote. “And it doesn’t look like either is interested.”
The WSJ also flagged that the Census Bureau releases the durable goods report for August.
Elevated government bond yields continued to edge to new highs, taking the shine off stocks around the world. The benchmark 10-year Treasury yield stood at 5.11 percent on September 25, 2026, according to Federal Reserve vintage data; the WSJ reported the yield at 5.16% in afternoon trading, poised to close at a fresh 19-year record. Traders were beginning to more seriously worry about how higher yields could weigh on stock valuations and damp the appeal of holding equities.
General Mills Chief Financial Officer Kofi Bruce offered the consumer-side view. “We like the start to the year. We are also mindful of the fact that the environment could remain a little tenuous,” Bruce said, discussing inflationary pressures that could put additional pressure on household spending in an interview with CFO Journal.