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Senior officials from the United States and China began a new round of trade discussions in Malaysia on Saturday, seeking to defuse tensions between the world’s two largest economies ahead of a planned leaders’ meeting later this week.

According to China’s official Xinhua news agency, the talks in Kuala Lumpur are being led by Chinese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent. The discussions mark the latest effort by both sides to stabilise relations amid escalating economic measures and strategic rivalry.

Setting the Stage for the Xi–Trump Meeting

Bessent and He — a close ally of President Xi Jinping — are tasked with addressing a series of recent punitive steps imposed by both countries. The meeting also aims to lay the groundwork for anticipated talks between Xi and US President Donald Trump on Thursday, to be held on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea.

Trade Tensions on the Rise

Tensions have risen sharply in recent weeks. Earlier this month, Trump criticised Beijing’s decision to expand controls on rare-earth exports, threatening steep tariffs on Chinese goods and even suggesting he might cancel his first in-person meeting with Xi since returning to the White House this year.

The discussions come as the clock ticks down on a trade truce that expires on November 10, unless the two sides agree to extend it. The fragile stability that had returned to the bilateral relationship has been disrupted after Washington broadened its technology restrictions and proposed new levies on Chinese vessels entering US ports.

Beijing’s Response and Industry Concerns

Beijing responded in kind, unveiling tighter export controls on critical materials, including rare earths. Earlier this week, China’s Ministry of Commerce held an unusually large meeting with foreign businesses in Beijing, attempting to reassure them that the new measures were not intended to restrict legitimate trade.

Outlook: Talks to Shape Future Relations

The outcome of the Malaysia talks is expected to shape the tone of the upcoming Xi–Trump meeting and determine whether the two powers can prevent a renewed escalation in their long-running economic confrontation.