Market FAQ Ahead Of This Week's Trump-XI Meeting

With the reported meeting between President Trump and President Xi approaching, here are Goldman's market thoughts on this subject in the following investor FAQs:

1. What’s going to happen? President Trump could meet with President Xi in Beijing on May 14 and 15. If it does proceed, it marks the first of potentially four in-person talks between the two leaders in 2026.
2. How did Chinese equities trade around previous Trump/Xi interactions? The two presidents have conducted 6 face-to-face meetings and 12 phone calls since 2017. Chinese equities typically range-traded ahead of the dialogues but performed well thereafter, averaging 2%/4% returns in the next 1/3 months and outperforming SPX tactically post the events.
3. What were the deliverables in the prior meetings? The agreements/deals were mostly trade- and commerce-oriented. From the end of Trump’s first term, tariffs on China have risen and the scope of US restrictions on Chinese companies has expanded.
4. What could be discussed at the meeting? Goldman's textual analysis suggests that the US could focus more on trade, while China may stress on technology/semiconductors and Taiwan issues.
5. What’s GS expectation going into the meeting? GS economists expect China to buy more US farm goods, energy and manufactured products in exchange for less tech restrictions and slightly lower tariffs. A “grand bargain” is unlikely.
6. What’s market expectation going into the meeting? Low market expectation for positive surprises per conservative investor positioning and flows. Goldman's proprietary indicator suggests that US-China tensions are probably not a dominant market-driving factor at the moment.
7. How to position for the event in Chinese equities? Goldman sees a positive tactical upside case anchored by supportive empirical trading patterns, low investor expectation, and a compelling risk/reward profile for Chinese equity. They highlight Chinese exporters to the US, and a list of most-shorted HK-listed names for potential short-term alpha but would reiterate the bank's strategically positive views on several structural themes, notably AI and the 15th Five-Year Plan.