Former U.N. Ambassador Nikki Haley warned that President Xi Jinping will "turn on the charm" during his upcoming meeting with President Donald Trump next month. Haley stated China is "not our friend," citing Beijing's alleged funding of Iran's war effort and hacking of U.S. infrastructure.

Diplomatic Warnings

Haley wrote on X that Xi would claim China is a good actor during the summit. She alleged Beijing is simultaneously "funding Iran in a war against us, hacking our critical infrastructure, and undermining America at every turn." She urged Washington to "hold them accountable."

Haley has consistently cast China as an adversary. In 2023, she called it "the biggest threat we've had since Pearl Harbor." In June, she made similar claims regarding China supplying weapons systems to Iran, while alleging Russia provided drones and satellite support.

Cybersecurity Actions

The Justice Department and FBI announced the seizure of domains used by QScan and QTRouter, hacking platforms linked to the China-based group QTFY. Court records link QTFY to Nanjing Xinjiuwei Network Technology Co. The records allege the company sold hacking services to China's Ministry of State Security and the People's Liberation Army.

Alleged targets included NASA, the Federal Reserve, the Energy and Justice departments, and the U.S. Senate.

Trade and Tariffs

The upcoming meeting marks the second between the leaders this year, following Trump's visit to Beijing in May. The two established new bilateral trade and investment boards, though Taiwan and trade-fairness concerns remain unresolved. The Trump administration is separately weighing a 7.5% tariff on Chinese imports over industrial overcapacity.

Founder Securities Chief Economist Yan Xiang stated that China’s capital market is becoming more effective at supporting new growth drivers, citing structural reforms that have enhanced market resilience and directed capital toward technological innovation.

The assessment follows a July 30 meeting of the Political Bureau of the CPC Central Committee, which prioritized deepening comprehensive reform of the investment and financing framework to strengthen market confidence.

Structural Shifts in Financing

Founder Securities identified three key reasons for the significance of these reforms. First, an efficient capital market underpins technological innovation by directing resources toward innovative sectors, particularly hard-tech firms driving "new quality productive forces." Second, balanced investment and financing functions help increase household investment income, thereby boosting domestic demand through wealth effects. Third, a resilient market helps cushion external shocks, using domestic development certainty to offset global volatility.

Progress over the past two years has been substantial in aligning the market with these goals.

What the Numbers Show

The data reveals a distinct pivot toward institutional stability and strategic sector support. The fact that the STAR Market, ChiNext, and Beijing Stock Exchange accounted for more than 70% of all A-share listings and more than 60% of total IPO proceeds since 2024 indicates a decisive regulatory preference for channeling capital into hard-tech and innovative enterprises rather than traditional sectors. Simultaneously, the 85% increase in A-share holdings by medium- and long-term investors, such as the national social security fund and insurers, signals a maturing investor base less prone to short-term volatility.

Market Stability Mechanisms

Internal stability has improved through coordinated policy actions. Two innovative structural monetary policy tools launched jointly by the China Securities Regulatory Commission and the People’s Bank of China, along with Central Huijin’s quasi-market-stabilization role, have maintained orderly conditions. During turbulence in 2025, institutions including Central Huijin curbed panic-driven declines by increasing ETF holdings.

Future Reform Priorities

Founder Securities highlighted several areas for continued focus:

• Financing: Further reform of the STAR Market and ChiNext, development of diversified equity financing forms, and strengthening of corporate bond and REIT markets.
• Investment: Expansion of patient capital pools, refinement of mechanisms for medium- and long-term capital entry, and development of index funds and ETFs suited to long-term horizons.
• Stability: Building a market stabilization framework tailored to China’s structure, including strategic reserve capacity and cross-agency risk early warning systems.
• External Risks: Maintaining institutional opening-up while strengthening inherent stability to withstand spillovers from global market turbulence.