US Treasury Secretary Scott Bessent is expected to discuss artificial intelligence, rare earths, and trade with He Lifeng, China's Vice Premier and lead economic envoy — a meeting that underscores how AI has become an intrinsic part of the broader US-China economic competition.

The meeting comes days before President Donald Trump and Chinese President Xi Jinping are due to meet in Washington on September 24. Reuters, citing a source familiar with the plans, said the Bessent-He talks could continue at a technical or working level into Monday. The Associated Press first reported the US plans.

AI policy is now welded to the whole economic fight

Placing AI on the agenda alongside trade signals that it has become part of the broad economic link between the two countries. Manufacturing and operating sophisticated models involves the use of chips, data centers, energy sources, and key minerals, which means disagreements over AI impact trade and industrial regulations across borders.

The same interdependence gives both parties a reason to maintain a certain level of communication. Despite tensions between Washington and Beijing over technology and supply chain issues, Bessent said there may be opportunities to limit their mutual threat. He told Axios:

"We are open to discussions on avoiding shared risks and avoiding bifurcation of our two systems." — Scott Bessent, US Treasury Secretary

Chinese open-weight models are the new competitive front

Bessent said the talks should cover both open- and closed-weight models. Open-weight systems make their trained model weights available for others to download, run, or fine-tune, although licenses and disclosure levels differ. Closed-weight models, by contrast, are offered only through controlled access.

That distinction has gained significant commercial value. According to Reuters, Chinese open-weight models are drawing the attention of American buyers because they are priced lower than the closed-type models from American labs. CSIS reported that Chinese solutions comprised 41% of Hugging Face downloads in the last year. CSIS also noted that Z.ai's current GLM-5.2 model, which has around 750 billion parameters, is very competitive on coding and agent performance compared with the top closed models made in the US.

The capability gap has also diminished. According to Stanford's 2026 AI Index, in March the top US AI model was only 2.7% ahead of the top Chinese model, continuing a trend since the beginning of 2025, when the two models regularly exchanged positions at the top of the list.

The rivalry has even reached the US government: Reuters reported that the National Archives website utilized Alibaba's Qwen model to search for proposed federal regulations, while the FBI accused Alibaba of stealing Anthropic's technology. The pairing captures the tension inside Washington: a US agency relying on a Chinese open-weight model even as American law enforcement accuses a Chinese AI company of taking a lab's technology.

Rare earths give Beijing leverage that takes years to unwind

Rare earths are important because they are the source of permanent magnets and other components used in advanced manufacturing. That puts them on the same supply-chain map as the chips, data centers, energy sources, and key minerals behind AI systems — overlap that helps explain why AI and rare earths ended up sharing an agenda. In 2025, China introduced export limitations that severely impacted defense, semiconductor, and automotive supply chains before the leaders of the United States and China decided to suspend the restrictions for a year. China's dominance in mining and processing these materials underpins that leverage.

Washington has moved to build alternatives through financial support, production agreements, and price subsidies. According to CSIS, one agreement signed by the US government with MP Materials includes a decade-long arrangement establishing a neodymium-praseodymium production floor set at $110 per kilogram. Even so, it will take years for new vertically integrated mine-to-magnet supply chains to emerge outside of China, because the full chain — extraction, processing, and magnet production — has to be built and scaled together.

The stacks are drifting apart, and the money is enormous

BCG states that new AI ecosystems devoted to the US and China are being formed that will impact AI systems, cloud services, processors, and applications. This creates difficulties for governments and businesses operating outside the two countries, which have to consider how long they can keep using technologies developed in both before regulations on exports, security, and procurement come into effect. The divide BCG describes is the same bifurcation Bessent said Washington is open to discussing avoiding.

The sums involved are tremendous. PwC forecasts that by 2050, investment in global AI infrastructure will amount to $31.6 trillion, with the United States accounting for $15.1 trillion and Asia Pacific for $8.2 trillion. It also estimates that disruption to the chip trade could lead to a reduction in global investment of almost 20%.

What to watch before the Washington summit

Axios says Washington is open to discussing "shared risks" with Beijing, while Cryptopolitan previously reported preparations for AI-focused talks ahead of the September 24 summit. The Associated Press says expectations for a major AI agreement remain low amid mutual distrust.

What matters now is whether the New York talks produce even a narrow set of practical guardrails while the much bigger contest over chips, minerals, trade, and AI continues.