The World This Quarter

CWA # 2310
The World This Quarter
China and the World (Jul-Sep 2026):
Xi-Trump summit, Taiwan tensions, South China Sea contestations, Strengthening the SCO and Cautious rapprochement with India

The World This Week #376, Vol 8, No. 38, 25 October 2026

Lakshmi Karlekar
25 October 2026
Photo Source:

In the third quarter of 2026, China continued to expand its influence throughout Asia and the broader Global South while attempting to control its ties with the United States. There was modest movement on trade, investment, and technology during the September Trump-Xi summit in Washington, but the two nations' disputes remained unresolved. China relied on its maritime presence and diplomatic engagement to further its objectives as tensions over Taiwan and the South China Sea persisted. Beijing also pushed for changes in global governance and strengthened regional cooperation through organizations like the SCO and BRICS. Although border conflicts and strategic distrust continued to be major problems, India-China ties showed indications of progress, especially through participation at the BRICS summit. The quarter focused on China's attempts to strike a balance between cooperation and competition, utilizing trade, technology, vital minerals, and regional organizations to safeguard its interests and bolster its standing in an increasingly contentious global order.

1. US-China Summit: Managing Strategic Competition
Chinese leader Xi Jinping and the US President Donald Trump had their second meeting of the year at the White House on September 24–25. While many of the most challenging issues in the relationship—from Taiwan to technology competition—were left unresolved, the meeting advanced novel approaches on trade and investment, negotiated tariffs and critical minerals, and artificial intelligence. As a result, the result was stabilization rather than reconciliation.

Both leaders of state agreed that Iran should uphold its pledge to refrain from developing nuclear weapons and that no nation or organization should be permitted to impose tolls on international waterways. Additionally, the two heads of state acknowledged the beneficial role of the China-U.S. trade and economic consultation mechanism, including the creation and advancement of the Board of Trade and other mechanisms, where they reached an agreement for a reciprocal tariff reduction of US$30 billion. Additionally, the two parties acknowledge the importance of collaboration between U.S. and Chinese law enforcement and counter-narcotics efforts.  Numerous cases involving New Psychoactive Substances (NPS) and precursor chemicals have recently been solved by the two sides working closely together, and an array of related criminal suspects have been arrested in both nations.

Thereby, the US and China have established a constructive relationship of strategic stability on the basis of respect and fairness, and have pledged to advance their bilateral goals. There will be a record four presidential meetings this year after both Trump and Xi announced their plans to attend the  APEC summit in Shenzhen in November and the G20 conference in Miami in December. However, the trade ceasefire was only extended for a further two months, so these discussions will probably concentrate on how to maintain the status quo.

2. Taiwan: Expanding Grey-Zone Pressure
On September 24, 2026, Taiwan's Coast Guard Administration (CGA) stated that it has upgraded its patrol and enforcement capabilities throughout the Pratas Islands, which Beijing and Taipei both refer to as Dongsha. Following the completion of a wharf renovation in July, an upgraded 100-ton patrol boat will be put into service, and bigger vessels will be sent to the surrounding seas more often.

Furthermore, the Coast Guard stated that since the beginning, it has seized nine Chinese fishing vessels that were discovered to be operating illegally near Pratas. Since then, the boats have been used for marine conservation and reef patrol in what is otherwise a little-visited national park. The statement comes after Chinese government vessels have been increasingly active around the islands for more than a year. The station, which is more than 400 kilometres from Taiwan proper and is protected by the coast guard rather than a military asset, is strategically significant and physically vulnerable, according to Taiwanese officials.

The September patrol boost is in the pattern of Chinese "grey-zone" pressure, which is defined as coercive actions that do not escalate into military combat. The Asia Maritime Transparency Initiative's analysis of Automatic Identification System data reveals that China Coast Guard and Maritime Safety Administration activities around Pratas have changed from sporadic, peripheral patrols to a more consistent presence. China uses military drills, coast guard ships, marine militias, and other types of coercion to affect Taiwan's strategic environment instead of going overboard into open warfare. These actions also put more strain on Taiwan and make it more difficult for the US to react.

3. South China Sea: Maritime Contestation and ASEAN Engagement
Beijing reaffirmed its rights over contested waters and rejected the South China Sea arbitration verdict on July 12, 2026, the tenth anniversary of the ruling. Additionally, China objected to a joint statement endorsing the award made by the US, the Philippines, and a number of other nations. This showed its will to withstand outside criticism while still promoting talks with those directly involved. Beijing consistently disputes the Permanent Court of Arbitration's 2016 ruling that the Philippines had won the case and that China's broad claim of sovereignty in the South China Sea had no legal foundation.

To advance consultations on the Code in the South China Sea (COC), China and the ten ASEAN Member States convened the 57th Meeting of the ASEAN China Joint Working Group on Implementation of the Declaration on the Conduct of Parties in the South China Sea (JWG DOC) in Manila, the Philippines, from August 19 to 21, 2026. Tan Qingsheng, Deputy Director General of the Foreign Ministry's Department of Boundary and Ocean Affairs, and Adina Kamarudin, Director General of Maritime Affairs of the Malaysian Ministry of Foreign Affairs, co-chaired the meeting.

China has ratified the United Nations Convention on the Law of the Sea (UNCLOS), which states that the Second Thomas Shoal is located inside the Philippines' exclusive economic zone. Manila has long called on Beijing to respect a decision made by an international arbitration court in 2016 that supported its maritime rights. China’s "dangerous and aggressive" activities against Philippine navy troops have been denounced by the US State Department.

4. SCO and the Global South: Strengthening Indo-Eurasian ties 
China kept making significant investments in international forums outside of the institutional framework headed by the West. Beijing had a crucial opportunity to strengthen ties with Russia, India, and Central Asian nations during the 26th SCO Summit in Bishkek, which took place from August 31 to September 1. Under the theme "25 Years of the SCO: Together for Sustainable Peace, Development, and Prosperity," Kyrgyzstan convened the summit, which commemorated the SCO's 25th anniversary. The Protocol on Amendments and Additions to the SCO Charter, which aims to update the organization's institutional framework, was accepted by the leaders. It enables more recent members to actively contribute to determining the organization's future structure.

The rules establishing the Universal Centre for Countering Challenges and Threats to the Security of SCO Member States were adopted by the SCO leaders. In order to combat terrorism, extremism, and organized crime, this seeks to improve intelligence sharing. The leaders adopted programs to combat drug addiction and stop the spread of synthetic substances and their precursors until 2030, and they accepted the rules on the SCO Anti-Drug Centre’s Executive Committee. Leaders developed the foundation for the SCO "Green Technology Corridor" and agreed on an action plan for the growth of ports and logistical hubs throughout member nations (2026–2030).

In its stance on Iran, the SCO denounced the military attacks on the Islamic Republic of Iran's land, which have killed many civilians and seriously harmed the nation's economy. Additionally, SCO members reiterated their support for the Islamic Republic of Iran's sovereignty and territorial integrity and their advocacy for a diplomatic and political solution to the crisis. They said that the US-Israel attacks on Iran pose grave threats to global peace, security, and stability and are in violation of both international law and the UN Charter. The SCO gives China a way to increase regional cooperation in security, energy, and connectivity while advancing a multipolar global order. SCO members also stated in their press release that they are against any "unilateral coercive measures" that violate UN and WTO regulations and could have a "negative impact on the global economy."

5. India-China Relations: Cautious Rapprochement
Throughout the quarter, there were indications of a slow stabilization of India-China ties. President Xi Jinping interacted with other BRICS leaders, including Indian Prime Minister Narendra Modi, during the 18th BRICS Summit in New Delhi on September 12–13. The New Delhi Declaration, a 140-paragraph consensus agreement on global governance change, was unanimously accepted by the BRICS members on September 12. The two nations placed a strong focus on enhanced bilateral ties, economic collaboration, development, and the amicable resolution of border disputes. This demonstrated China's readiness to uphold its fundamental interests while pursuing practical interaction with a strategic rival.

Global governance, including multilateral institutions, international trade and investment, energy and food safety, public health, catastrophe resilience, and the resilience of vital supply networks, are all on the summit's agenda. Leaders also talked about ways to increase economic cooperation among the BRICS nations, interruptions to energy and marine routes, and geopolitical crises. Enhancing payment system interoperability, increasing the use of national and central bank digital currencies in cross-border transactions, and creating new frameworks for collaboration for startups and logistics were among the economic topics of debate. A BRICS Incubator Network, a Startup Innovation Fund, and a Logistics Supply-Chain Cooperation Framework were among the initiatives that leaders took into consideration. The conflict in Ukraine, the ongoing conflict between Iran, Israel, and the United States, rising energy costs, and trade issues were all discussed at the summit.

The meeting was important because it showed that the relationship is progressing past the protracted standstill that followed the border crisis in 2020. While trade disparities, supply-chain reliance, and strategic distrust continue to pose problems for economic cooperation, border peace and tranquillity remain crucial to the partnership. Better ties with India have broader strategic significance for China. Cooperation within BRICS and other Global South organizations is made possible by a less combative relationship with New Delhi, which also lessens pressure along China's western boundary. However, resolution on the border issue is still a need for India's rapprochement.

To conclude: China in the third quarter (Jul-Sep 2026)
China's foreign policy from July to September 2026 demonstrated an attempt to remain stable while still defending its interests in the area. Although disagreements over trade, technology, Taiwan, and vital minerals remained unresolved, the Trump-Xi summit helped maintain communication between Washington and Beijing. Even as it interacted with ASEAN on maritime matters, China persisted in pressuring Taiwan and asserting its rights in the South China Sea. Beijing also aimed to improve relations with regional allies and encourage a bigger role for developing economies in BRICS. Although border conflicts and strategic distrust remained issues, India-China ties showed indications of progress throughout the quarter. In general, China aimed to grow its influence through economic and multilateral involvement, handle its disagreements with other nations through discourse, and stay steadfast on matters it views as essential to its national interests.

About the author

Dr Lakshmi Karlekar is an Assistant Professor at the School of Law, Christ University, Central Campus, Bangalore


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Climate Change
September 2019 | CWA # 161

Rashmi Ramesh

G-20 Summit
July 2019 | CWA # 147

Vivek Mishra

Global Politics
June 2019 | CWA # 134

Sourina Bej

China
June 2019 | CWA # 133

Harini Madhusudan

Julian Assange
June 2019 | CWA # 126

Jerin George

The BRI Summit 2019
May 2019 | CWA # 117

Sourina Bej

United States
January 2019 | CWA # 80

Abhishrut Singh

United States
January 2019 | CWA # 78

Kriti

United States
January 2019 | CWA # 77

Komal Tiwary

South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 71

Mahesh Bhatta

Nepal
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 70

Nasima Khatoon

The Maldives
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 69

Harini Madhusudan

India
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 68

Sourina Bej

Bangladesh
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 67

Seetha Lakshmi Dinesh Iyer

Afghanistan
Southeast Asia
September 2018 | CWA # 58

Aparupa Bhattacherjee

China
August 2018 | CWA # 52

Oishee Majumdar

United States
July 2018 | CWA # 47

Rahul Arockiaraj

United States
July 2018 | CWA # 40

Rahul Arockiaraj

East Asia
June 2018 | CWA # 26

Siddhatti Mehta

Global Politics
June 2018 | CWA # 21

Harini Madhusudan

Global Politics
May 2018 | CWA # 8

Samreen Wani

India
May 2018 | CWA # 1

Samreen Wani