Asia stocks rise on AI, US-China trade talks optimism

The US and China concluded high-level talks in New York with a proposed AI safety notification mechanism for potential summits between US President Donald Trump and Chinese President Xi Jinping. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng discussed operationalizing a process agreed in May to identify potential tariff cuts on non-strategic goods, known as the Board of Trade.

The US side proposed the new AI safety notification system to emphasize national security concerns and common threats, covering AI-related incidents that rise to a national security level. The Chinese response to the US proposal was unclear, with Vice Premier He and China's chief trade negotiator Li Chenggang leaving the talks without speaking to media.

US Trade Representative Jamie Greer clarified that export controls on sophisticated AI chips and semiconductor manufacturing equipment were not on the agenda, but rather the groundwork for a successful summit. Other key topics included plans to operationalize a process for identifying potential tariff cuts on non-strategic goods and addressing the flow of critical minerals to US companies, which have been insufficient despite Beijing's prior commitments.

The discussions point to incremental progress in avoiding an escalation of tensions in the delicate trade relationship between the two economic powers. US Representative Ro Khanna emphasized the need for an international agreement on AI safety, with principles including banning self-improving AI and implementing safeguards to prevent misuse of AI for biological or nuclear weapons.