BEIJING, China – Like audiences everywhere, the Chinese were watching with a mix of amusement and calculation as the world’s richest man and its most powerful politician traded digital jabs like spoiled schoolboys. The drama had its entertainment value, but here in China, the real story lies elsewhere. This is a country where people know how quickly public favor can evaporate—and where they understand that power rarely announces itself in tantrums.

In a narrow Beijing noodle shop, the owner beamed as he handed over my lunch order. “He’s coming to China,” he said with unmistakable delight. The patrons behind me murmured their approval. They, like many others here, knew what really mattered.

“He” is President Donald Trump. And in Beijing, his planned visit isn’t seen as a routine diplomatic stop—it’s being framed as a symbolic gesture of deference, reminiscent of a tributary leader paying respects to a Chinese emperor. Trump won’t kneel, of course, but that’s beside the point. His arrival is a spectacle in itself.

Both Trump and Xi Jinping have extended invitations to visit each other’s countries. In the noodle shops and tea houses of the Chinese capital, Xi’s offer to host Trump is viewed not as mutual protocol but as a demonstration of power. Xi’s trip to the U.S.? That’s seen as an act of generosity. Trump’s visit to China? A clear victory.

In Beijing, Trump’s impending arrival is widely interpreted as a Chinese win in the ongoing trade war. The announcement of a 90-minute phone call between the two leaders came just after Washington quietly decided not to label China a currency manipulator—a major concession. For Chinese diplomats, it’s a two-fold triumph.

It’s long been known that Trump has sought a meeting with Xi. But Beijing turned down several earlier overtures. Why? Because, consistent with a diplomatic ethos that dates back centuries, Chinese leaders only agree to such high-level meetings when the outcome is already assured. A photo-op without substance is inconceivable to Beijing’s mandarins.

That’s why the Treasury’s decision to back off on labeling China a currency manipulator was no coincidence. The timing was strategic. And yet, Washington continues to criticize China—if somewhat hypocritically—for its lack of exchange-rate transparency. The critique may be valid, but America’s unwillingness to confront China head-on has become a pattern.

The truth is, the U.S. has repeatedly chosen not to formally accuse China of manipulating its currency. It’s worth noting that this reluctance may have less to do with fairness and more to do with economics: China currently holds $784 billion in U.S. debt, second only to Japan. If Beijing were to liquidate that sum—or even a significant portion—it would plunge the dollar’s value, effectively manipulating the currency market.

The U.S. Treasury’s report, “Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States,” was submitted to Congress with language that was harsh, if toothless. It accused China of bending the rules while simultaneously acknowledging Washington’s own inaction.

Following the call, Trump characterized his conversation with Xi as “very positive”—an expected line, perhaps, but one that obscures deeper tensions.

In reality, China holds the stronger hand. Its leverage extends far beyond trade surpluses. Rare earth minerals, for example, are indispensable to global technology—from smartphones to fighter jets. China’s dominance in rare earth exports gives it the upper hand. Should Beijing decide to halt those shipments, the impact on the U.S. economy would be immediate and painful.

Even so, unresolved issues remain: Taiwan’s status, the future of Chinese students in American universities, and other thorny matters still complicate the path forward.

Still, the overall trajectory seems clear. Beijing believes it has called Trump’s bluff—and with each diplomatic exchange, it tightens its grip. Back at the noodle shop, the owner’s grin says it all: for China, this is a moment of quiet vindication.