Stronger growth and reflation ease pressure for stimulus in China in World Economy News 18/05/2026 Constructive strategic stability’ to guide US-China ties after Trump’s first Beijing trip since 2017 President Trump’s long-awaited trip to Beijing largely played out as expected, with some positive developments on the economic side but no real breakthrough on geopolitical issues. A Chinese foreign ministry readout noted that Presidents Xi and Trump agreed to establish “China-US constructive strategic stability” to guide the next three years of relations. It holds the potential to expand cooperation on the economy and trade, health, agriculture, tourism, culture, and law enforcement. Earlier announced measures included China agreeing to renew beef import licences and resume Boeing aeroplane imports. We expect there to be additional announcements unveiled moving forward. But even without any groundbreaking deals, China’s trade with the US is expected to show signs of recovery in the months ahead. We saw in the April trade data that China’s exports to the US bounced back to 11.3% year-on-year, after falling by 16.4% in the first quarter. The media and market focus was on the geopolitics side leading up to the summit, especially watching for any potential developments on Iran and Taiwan. No major breakthroughs were expected given the positions of both sides were well known heading into the meetings. China reiterated Taiwan as its core issue, while the US focus was on developments in Iran. We’re unlikely to see any major formal announcements of progress on these issues. But actions speak louder than words. If we see any signs of progress in Iran negotiations or the planned Taiwan arms sales in the days ahead, it would likely suggest these discussions bore fruit. Reflation trend is gaining steam China’s April inflation data surprised on the upside, indicating strengthening reflation momentum. Both PPI and non-food inflation hit 45-month highs in April. We suspect the impact