Xi Jinping warned Donald Trump of a potential conflict if the Taiwan issue is mismanaged, in blunt remarks that punctured an otherwise cordial start to the first trip to China by a sitting U.S. president in nearly a decade.

The two leaders spoke for nearly two-and-a-half hours at the Great Hall of the People on Thursday, after a welcome ceremony in central Beijing that included honor guards, a formal procession and dozens of children waving flags and cheering enthusiastically. While that meeting was still underway, China released a readout of Xi’s remarks that thrust self-ruled Taiwan into the spotlight.

“The Taiwan issue is the most important issue in China-U.S. relations,” Xi said, according to the official Xinhua News Agency. “If mishandled, the two nations will experience collision or even clashes, pushing the entire China-U.S. relationship into a highly dangerous situation.”

While a one-year trade truce has stabilized U.S.-China ties in recent months, Taiwan remains an issue that has strained the relationship. China has opposed a pending U.S. arms package to the island democracy that Beijing considers its territory, and asked the U.S. to clarify Washington doesn’t support Taiwanese independence.

As Xi and Trump toured the Temple of Heaven after their talks, reporters shouted questions at Trump about Taiwan, which he ignored. The U.S. side still hasn’t released a readout.

Trump will attend a state banquet on Thursday evening, his next opportunity to make public remarks. That dinner will be attended by Chinese officials and American business executives on the trip, such as Nvidia Corp.’s Jensen Huang and Tesla Inc.’s Elon Musk.

Xi’s comments amount to China’s most “direct” warning yet on Taiwan, said Zhu Feng, executive dean of Nanjing University’s School of International Studies. That language was likely aimed at warning the Trump administration against supporting Taiwanese President Lai Ching-te, who Beijing has previously branded a “separatist,” Zhu added.

The two leaders also discussed the situation in the Middle East, the Ukraine crisis and the Korean Peninsula, according to Xinhua, which didn’t directly name Iran. Xi stressed stability in trade between the world’s top economies.

The onshore yuan hit its strongest level since February 2023, gaining 0.1% following reports of a potential $30 billion trade deal. Mainland stocks fell 1.7% as investors took profits from a recent tech rally while awaiting concrete details from the ongoing summit.

Hsiao Kuang-wei, a spokesperson for the Taiwanese Ministry of Foreign Affairs, said Thursday that Taiwan will continue to work closely with the U.S. and like-minded partners to safeguard peace and stability across the Taiwan Strait.

China’s warning on Taiwan contrasted with the upbeat remarks the two leaders exchanged about the trajectory of their relationship.

“We should be partners, not rivals,” Xi said in his opening remarks, while Trump predicted the two countries had a “fantastic” future ahead. The U.S. leader added: “The relationship between China and the USA is going to be better than ever before.”

Relations between Washington and Beijing have been steady since the two presidents met last October in Busan, South Korea. But frictions have remained, including over China’s dominance over the supply of rare earths and American export controls that limit the ability of Chinese companies to access cutting-edge chips.

Xi said that a meeting the day before in South Korea between the countries’ trade negotiators had reached a “generally balanced and positive outcome,” according to an official statement.

The U.S. and China are weighing a potential framework whereby each country identifies some $30 billion in goods on which tariffs could be eased without threatening national security interests, Reuters earlier reported, citing four unnamed people familiar with the Trump administration’s objectives. The White House did not immediately respond to a request for comment on the report.

Xi also expressed confidence the U.S. and China could transcend the “Thucydides Trap” — whereby the risk of war is heightened when an established power is threatened by a rapidly rising power. The Chinese readout said the two countries supported each other hosting the Group of 20 and Asia-Pacific Economic Cooperation summits this year, giving both septuagenarians two more chances to hold talks.

Taiwan issue

Trump and Xi have met at least six times over the past decade — typically on the sidelines of major multilateral summits — although they have also visited each other’s nations.

When they last publicly spoke in a February phone call, the Chinese leader warned the U.S. to handle arms sales to Taiwan with “utmost care,” comments that came weeks after Washington approved a record $11 billion package for Taipei. Another $14 billion tranche has been delayed, and Taiwan recently passed a special budget giving the chip hub more fiscal space for such purchases.

Leading up to the summit, China intensified efforts to isolate Taipei. Lai’s international travel was blocked after Beijing pressured three African countries to deny his plane access to their airspace. Weeks earlier, Xi met with the island’s Beijing-friendly opposition Kuomintang — something that hadn’t happened in a decade.

Beijing has tools to retaliate if the U.S. pushes on Taiwan, according to Zhou Bo, a retired People’s Liberation Army senior colonel. He cited more sophisticated military maneuvers and sanctions as possible avenues.

Ali Wyne, a senior research and advocacy adviser on U.S.-China relations at the International Crisis Group, said he doesn’t expect Washington make any major change in its policy toward Taiwan.

“The greater concern, if you are in Taiwan, is what are the informal, off the record concessions President Trump might make?” he said.

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—With assistance from Paul Abelsky, Lianting Tu, Wenjin Lv, Jing Li, Rebecca Choong Wilkins and Yian Lee.

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