On April 6, 2026, Meridian International Center convened a closed-door U.S.-China Briefing at Meridian House featuring Deborah Lehr, Chairman of the Board at Meridian International Center, Chair and CEO of Basilinna, Vice Chair and Executive Director at The Paulson Institute, and former Deputy Assistant U.S. Trade Representative and Director for Asia at the National Security Council. Bringing together senior leaders from across business and policy, the discussion provided a timely, off-the-record opportunity to assess the state of the U.S.-China relationship and its implications for global markets, supply chains, and international economic competitiveness.
Ahead of Deborah’s upcoming travel to China with Secretary Hank Paulson, the conversation examined how geopolitical developments are reshaping China’s strategic posture, how economic pressures inside China are affecting its outlook, and what a potential Trump-Xi meeting could signal for the future of bilateral engagement. Participants also explored the implications of selective decoupling, shifting investment patterns, industrial overcapacity, critical minerals, energy competition, and the growing race for leadership in advanced technologies such as AI.
As participants shared perspectives from sectors with deep commercial, technological, and strategic exposure to China, the conversation underscored the complexity of a relationship defined simultaneously by competition, interdependence, and mutual risk.
Lehr opened by underscoring that the U.S.-China relationship remains the most important bilateral relationship in the world” even as it grows more complex and fragile. She described a dynamic in which the two countries are strategic adversaries militarily while remaining deeply intertwined economically—what she characterized as a system of “mutually assured disruption” that, simultaneously, creates a degree of stability.
She noted that recent U.S. policy has contributed to a historic reduction in the trade deficit and accelerated efforts to diversify supply chains, signaling a broader shift toward economic resilience. At the same time, expectations for high-level diplomacy (particularly a potential Trump-Xi meeting) are focused less on sweeping breakthroughs and more on achievable outcomes, including discussions on energy, critical minerals, and Taiwan.
A significant portion of the discussion focused on China’s internal dynamics and their implications for global engagement. Lehr pointed to a range of structural challenges, including high youth unemployment, weak domestic consumption, and a sharp decline in foreign investment—driven in part by both geopolitical tensions and domestic political conditions.
China’s economic model, she noted, is increasingly reliant on exports, with state-owned enterprises continuing to operate despite inefficiencies, fueling intense competition focused on market share rather than profitability. At the same time, the government’s long-running anti-corruption campaign and highly centralized, top-down decision-making structure have created an environment in which officials are often reluctant to act, contributing to broader uncertainty within the system.
Despite these headwinds, Lehr cautioned against underestimating China’s ability to manage its economy, noting that the country has historically demonstrated an ability to sustain growth even under pressure.
The conversation also highlighted intensifying competition in strategic sectors, particularly technology and energy. Participants examined China’s rapid progress in renewables—now accounting for roughly half of its energy mix and exceeding the rest of the world in installed capacity—as well as its continued expansion of coal and electricity production, enabling it to outcompete U.S. firms in key industries.
At the same time, China is actively pursuing technological self-sufficiency, with efforts to eliminate reliance on U.S. technology across critical systems. In response, Lehr emphasized that the United States cannot realistically constrain China’s trajectory and instead must focus on competing through innovation, particularly in areas such as AI, advanced manufacturing, and emerging technologies.
This competition is further shaped by workforce dynamics, with China graduating significantly more students than the United States (3:1), even as it faces high unemployment. This has raised questions about how effectively that talent can be absorbed into its economy.
Beyond bilateral dynamics, participants explored how China is strengthening its global position, particularly through strategic engagement in regions such as the Middle East. Lehr noted that China has maintained relationships across competing regional actors while expanding energy ties, allowing it to benefit economically from ongoing geopolitical conflicts.
The discussion also raised concerns about shifting U.S. relationships with allies, with some participants suggesting that current approaches could push partners closer to China. Others pointed to uncertainty around how allies, including Europe and Canada, are navigating their own economic and strategic relationships with Beijing.
For companies operating globally, the operating environment was described as increasingly complex and highly industry-specific. While geopolitical risks, regulatory pressures, and supply chain shifts are reshaping business decisions, participants also emphasized that China remains a significant market with substantial consumer demand and continued areas of opportunity.
Discussions on “selective decoupling” and “China-for-China” strategies reflected a broader trend of companies restructuring supply chains—moving certain operations to countries like Vietnam and India while maintaining a presence in China to serve local markets.
Throughout the conversation, participants emphasized the importance of sustained engagement between U.S. and Chinese leaders. Lehr pointed to past strategic economic dialogues as a model, where regular, face-to-face meetings enabled both sides to navigate difficult issues and work toward defined outcomes. As discussions concluded, it was clear that while competition between the United States and China is intensifying across economic, technological, and geopolitical domains, continued dialogue remains essential to managing risk and identifying areas of stability.
The briefing also helped lay the foundation for continued Meridian programming on China, reflecting sustained interest among leaders navigating the policy and business implications of this evolving relationship. As U.S.-China dynamics continue to influence trade, technology, energy, and investment, Meridian remains committed to convening informed conversations that help leaders interpret change and engage strategically.
| U.S.–China Briefing with Deborah Lehr | |
|---|---|
| Program Areas: | Corporate Diplomacy |
