Scott Bessent and He Lifeng will meet in New York ahead of the anticipated Trump-Xi summit later this month
US Treasury Secretary Scott Bessent is heading to New York this weekend to sit down with Chinese Vice Premier He Lifeng for two days of talks covering artificial intelligence, rare earth minerals, and the broader economic relationship between the world’s two largest economies. The meetings, scheduled for September 19-20, serve as a diplomatic appetizer before the main course: a summit between former President Donald Trump and Chinese President Xi Jinping set for September 24 in Washington.
US Trade Representative Jamieson Greer is also expected to join the discussions.
AI leadership and shared risks #
Bessent has made clear in the lead-up to the meeting that the US has no intention of ceding ground on AI. He’s framed American dominance in artificial intelligence as non-negotiable, even as some voices in industry and policy circles have pushed for a more measured pace of development.
At the same time, the Treasury Secretary has signaled a willingness to engage on what he calls “shared risks” in AI development, acknowledging that both nations face real dangers from uncontrolled AI proliferation, from safety failures to the potential for adversarial uses, without conceding any competitive advantage.
One sticking point likely to surface is the distillation of US AI models. In plain terms, that’s the process of taking a large, powerful AI system built with American technology and compressing it into a smaller, cheaper version that can be deployed elsewhere. Washington has grown increasingly concerned that Chinese firms could reverse-engineer or replicate the capabilities of frontier US models through these techniques, effectively bypassing export controls designed to maintain a technological edge.
The governance of AI models more broadly is also on the agenda. Both countries have been developing their own regulatory frameworks for AI, but those frameworks don’t exactly see eye to eye.
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Rare earths and the supply chain chess match #
China dominates global production of rare earth minerals, the elements essential for everything from electric vehicle batteries to fighter jets to the semiconductors that power AI systems. China has shown willingness to pull the lever of export restrictions before in trade disputes.
Previous rounds of US-China engagement have touched on critical minerals and technology supply chains. The US has been investing in domestic and allied-nation mining and processing capacity, though building out those alternatives takes years.
Setting the table for Trump and Xi #
With the Trump-Xi summit just days away on September 24, the Bessent-He Lifeng meetings are designed to map the terrain and identify areas where the two leaders might announce progress. Earlier discussions, including exchanges at venues like Davos, touched on some of these same themes.
US-China economic relations have been strained for years, with intellectual property concerns, Chinese export restrictions on critical minerals, and American curbs on semiconductor sales to China all contributing to tensions.
What markets are watching #
Investors in the tech sector have reason to pay close attention. Any shift in the regulatory landscape around AI exports or technology collaboration could create meaningful volatility for companies on both sides of the Pacific. Chipmakers, cloud providers, and AI developers all have exposure to the outcome of these discussions.
The rare earths angle adds another layer of market sensitivity. Commodities traders and supply chain analysts will be parsing every signal from New York for hints about whether China might tighten or loosen its grip on mineral exports.
No specific outcomes have been previewed by either government. The substance, if any, will likely emerge in the days after the talks conclude, filtered through carefully worded readouts from both Washington and Beijing.
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