Global trade tensions, stoked by China-US tariffs, are settling into a steadier balance as the world braces for fresh challenges from rapid technological disruptions, financial leaders said on Tuesday at a summit in Hong Kong.

The China-US relationship had entered into a more "stable equilibrium" after last week's talks between the leaders of the world's two biggest economies, despite the noise on the surface over tariffs and other trade disputes, said William Ford, chairman and CEO of US private equity firm General Atlantic, at the Global Financial Leaders' Investment Summit.

"Below the water line, there was actually a much more constructive engagement, as evidenced by [US Treasury Secretary Scott Bessent] and some of the Chinese leaders in their five meetings during the year," Ford said. "It sets the stage for a much more positive and stable relationship between the US and China in the next year."

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He said the China-US relationship was in "a cyclical upswing", despite some longer-term challenges related to national security, competition and technology.

Georges Elhedery, group CEO of HSBC, speaks at the Global Financial Leaders' Investment Summit on Tuesday. Photo: Edmond So alt=Georges Elhedery, group CEO of HSBC, speaks at the Global Financial Leaders' Investment Summit on Tuesday. Photo: Edmond So>

After talks on Thursday on the sidelines of the Asia-Pacific Economic Cooperation summit in South Korea, Chinese President Xi Jinping and US counterpart Donald Trump teased out some relief on a host of bilateral trade irritants, followed by Bessent's announcement that China had approved the transfer agreement for short video app TikTok.

"It's a relatively good news story where we stand today," said Georges Elhedery, group CEO of HSBC, during the same panel discussion.

Elhedery said global trade had shown resilience and adaptability but cautioned that technology disruptions posed significant risks to the current macroeconomic landscape.

"Adopting it is an opportunity, [and] missing out on it is going to be a major risk," he said. "There is still a lot that's happening in blockchain, away from regulated financial services, in some of these unregulated stablecoin issuers.

"That's a threat, because it's an activity we cannot engage in, being regulated and living by different standards than some of these issuers."

On artificial intelligence and the massive investment in data centres that it has driven, Elhedery highlighted concerns about limited expertise, strained computing power and yet unproven benefits.

Ford added that "like so many new technologies, there is going to be misallocation of capital, capital destruction, overvaluation [and] irrational exuberance". But in the long term he said "you're going to create a whole new set of industries and applications, and there will be a productivity payoff".

The key was to invest now, since "unlike the internet, this cycle is very capital intensive, and you need to pay up front for the opportunity that's going to come down the road", Ford said.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

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