{"title":"US-China Board of Trade Talks: 5 Strategic Signals for Asia Family Offices","html":"

What Is the Proposed US-China Board of Trade and Why Does It Matter for Family Offices?

A proposed US-China Board of Trade — one of two institutional mechanisms reportedly under discussion ahead of a summit between US President Donald Trump and Chinese President Xi Jinping — could represent the most significant structural reset in bilateral economic relations since Phase One of the trade deal signed in January 2020. A companion Board of Investment is also said to be on the table, designed to create formal channels for managing capital flows and commercial disputes between the world's two largest economies. For principals running single-family offices or multi-family offices across Singapore, Hong Kong, and the wider Asia-Pacific region, the direction of these talks carries direct implications for portfolio construction, currency exposure, and the allocation of capital into private markets on both sides of the Pacific.

The reason this matters personally to any family office principal in Asia is straightforward: US-China trade tension has been the single most disruptive macro variable for regional asset allocation over the past six years. Portfolios with meaningful exposure to Greater China equities, US-listed Chinese ADRs, or cross-border real assets have been repriced repeatedly by tariff escalations, export control regimes, and diplomatic ruptures. A formalised bilateral trade governance structure — however nascent — would alter the risk premium attached to a broad swath of assets that regional family offices hold. Understanding the architecture of what is being proposed, and the gap between US and Chinese expectations, is therefore not background noise. It is front-line allocation intelligence.

According to reporting by Channel News Asia and corroborated by multiple Washington and Beijing policy sources, the Board of Trade concept envisions a standing bilateral body that would address tariff schedules, market access disputes, and sectoral negotiations outside the slower machinery of the World Trade Organization. The Board of Investment, separately, would focus on screening and facilitating cross-border direct investment — a domain that has been progressively restricted since the Committee on Foreign Investment in the United States (CFIUS) tightened its remit under the Foreign Investment Risk Review Modernization Act of 2018. The gap between what Washington wants — verifiable commitments and enforcement mechanisms — and what Beijing is prepared to offer — broad frameworks with limited external oversight — remains the central fault line.

How Does the Divergence in US and Chinese Expectations Affect Regional Investment Risk?

Expectations between the two sides diverge sharply, and that divergence is itself a tradeable signal. The United States, under the Trump administration's second term, has consistently prioritised structural commitments: enforceable purchase agreements, technology transfer restrictions, and reciprocal market access benchmarks. China, for its part, has signalled openness to dialogue but has resisted any framework that it interprets as institutionalising external scrutiny of its domestic industrial policy. This is not a new tension — it echoes the breakdown of the Phase Two trade negotiations in 2020 — but the institutional form being proposed in 2025 is more ambitious in scope.

For family offices, the practical consequence of this divergence is a prolonged period of uncertainty that is unlikely to resolve cleanly at a single summit. Data from the Peterson Institute for International Economics indicates that US tariffs on Chinese goods averaged approximately 19.3% as of late 2024, even after partial rollbacks, compared to a pre-trade-war baseline of roughly 3.1% in 2017. Those tariff levels have cascading effects on supply chain configurations, the earnings of multinationals with China exposure, and the relative attractiveness of manufacturing-linked private equity in Southeast Asia — a region that has absorbed significant supply chain diversion since 2018. Family offices with allocations to Vietnam-focused or India-focused private equity funds, for instance, have a direct stake in whether US-China trade friction persists or moderates.

"A formalised US-China Board of Trade would not eliminate bilateral risk — it would institutionalise the management of that risk. For family office principals, the distinction matters enormously when pricing long-duration private market commitments."

The currency dimension is equally consequential. The offshore Chinese renminbi (CNH) has traded with elevated volatility relative to the US dollar throughout periods of tariff escalation. A credible summit outcome that signals progress toward a Board of Trade framework could compress CNH volatility and alter the hedging calculus for family offices with RMB-denominated assets — whether held through Qualified Foreign Institutional Investor (QFII) quotas, Stock Connect positions, or direct onshore bond holdings. Conversely, a summit that produces only a communiqué without structural commitments is likely to be read by markets as a deferral, not a resolution, sustaining the current risk premium.

What Regulatory Structures Should Asia Family Offices Use to Navigate Cross-Border Exposure?

Regulatory structuring is the practical toolkit through which family offices manage the jurisdictional complexity that US-China tension creates. Singapore's Variable Capital Company (VCC) framework, administered by the Monetary Authority of Singapore (MAS), has emerged as the preferred vehicle for family offices seeking to consolidate multi-jurisdictional investment mandates under a single regulated structure. The VCC allows sub-funds with different investor bases and asset classes — including Greater China private equity, US venture exposure, and Southeast Asian real assets — to be ring-fenced within one umbrella, reducing administrative duplication and enabling efficient repatriation of capital.

Hong Kong's Open-ended Fund Company (OFC) structure, overseen by the Securities and Futures Commission (SFC), serves a comparable function for family offices that maintain a primary nexus in the city. Given Hong Kong's role as the dominant offshore RMB centre — handling approximately 75% of global offshore RMB payments according to SWIFT data — the OFC remains strategically relevant for families with deep Mainland China ties, even as some principals have diversified their structuring footprint toward Singapore. The Dubai International Financial Centre (DIFC) has also gained traction as a third-node jurisdiction for Asia-based families seeking a non-aligned domicile for assets that straddle East-West geopolitical lines. DIFC-registered family office structures benefit from zero corporate tax on qualifying income and access to a common law framework that is familiar to both US and UK-trained advisers.

The interplay between these structures and the proposed US-China investment governance framework is direct. If a Board of Investment were to establish new screening protocols for Chinese capital entering US markets — or for US capital entering sensitive Chinese sectors — family offices holding interests through Singapore VCCs or Hong Kong OFCs would need to assess whether those structures provide adequate insulation from extraterritorial reach, particularly under the evolving CFIUS regime and China's own Foreign Investment Security Review mechanism.

How Should Family Office Principals Position Portfolios Ahead of the Trump-Xi Summit Outcome?

Portfolio positioning ahead of a binary geopolitical event requires scenario discipline rather than directional conviction. The most useful framework for family office investment committees is to map exposures against three distinct summit outcomes: a substantive framework agreement that establishes the Board of Trade and Board of Investment with a working timeline; a partial agreement that produces a tariff truce without institutional architecture; and a breakdown that accelerates decoupling across technology, finance, and trade. Each scenario carries differentiated implications for asset classes that regional family offices commonly hold.

1. Substantive framework agreement: Positive for Greater China equities, offshore RMB bonds, and cross-border private equity. Likely to compress risk premiums on US-listed Chinese ADRs and reduce hedging costs on CNH exposure. Supply-chain diversion plays in Vietnam and India may see partial reversal of inflows.
2. Partial tariff truce without institutional structure: Neutral to mildly positive for risk assets in the near term, but sustains structural uncertainty. Family offices should maintain hedges on CNH and avoid extending duration in RMB fixed income without a clear policy anchor.
3. Summit breakdown or escalation: Negative for Greater China allocations, positive for safe-haven USD assets and gold. Accelerates the case for Southeast Asian and Indian private markets as structural beneficiaries of supply chain reorientation. MAS-regulated Singapore structures gain relative appeal as a neutral domicile.

According to Preqin data, Asia-Pacific private equity fundraising reached approximately USD 96 billion in 2023, with a meaningful share targeting markets that are direct beneficiaries of US-China supply chain reorientation. Family offices that have already made commitments to Vietnam manufacturing, Indian infrastructure, or Indonesian consumer funds are positioned to benefit from continued friction; those with legacy Greater China private equity exposure face a more complex exit environment if decoupling accelerates. The summit outcome will not resolve these structural trends overnight, but it will set the tone for the next 12 to 18 months of capital allocation decisions.

What Should Family Offices Watch in the Months Following the Summit?

The summit itself is a starting point, not a conclusion. The institutional mechanisms being proposed — the Board of Trade and the Board of Investment — would require months of technical negotiation to operationalise, and the gap between announcement and implementation has historically been where US-China agreements lose momentum. Family office principals should task their investment teams and external advisers to monitor a specific set of forward indicators rather than reacting to headline communiqués.

Key dates and developments to track include: the composition and mandate of any joint working groups announced at the summit; the status of existing Section 301 tariff reviews under the Office of the United States Trade Representative (USTR); any amendments to CFIUS regulations that expand or contract the definition of covered transactions; the People's Bank of China's CNH fixing policy in the weeks following the summit; and the pipeline of Chinese company listings on Hong Kong and US exchanges, which serves as a real-time barometer of cross-border capital market confidence. MAS and the SFC are also likely to issue updated guidance on cross-border fund structuring if a new investment governance framework is agreed, and family offices should ensure their legal counsel is monitoring both regulators' consultation pipelines.

Frequently Asked Questions

What is the proposed US-China Board of Trade and how would it work?

The proposed US-China Board of Trade is a bilateral institutional body under discussion between the United States and China that would create a standing mechanism for managing tariff disputes, market access negotiations, and sectoral trade issues. It would operate outside the WTO framework, allowing faster bilateral resolution of commercial disputes. A companion Board of Investment would address cross-border capital flows and foreign investment screening. Neither body has been formally agreed upon as of mid-2025, and the gap between US demands for enforceable commitments and China's preference for broad frameworks remains unresolved.

How does US-China trade tension affect Asia family office allocations?

US-China trade tension directly affects the valuation of Greater China equities, offshore RMB bonds, US-listed Chinese ADRs, and private equity funds with China exposure. It also influences supply chain investment flows into Southeast Asia and India, which have absorbed manufacturing diversion since 2018. Currency hedging costs on CNH rise during periods of escalation, and the structuring of cross-border investments through vehicles such as Singapore VCCs or Hong Kong OFCs becomes more complex when extraterritorial regulatory reach expands.

What is a Variable Capital Company (VCC) and why do family offices use it?

A Variable Capital Company (VCC) is a Singapore corporate structure regulated by the Monetary Authority of Singapore (MAS) that allows investment funds to be established with flexible capital arrangements and multiple sub-funds under a single umbrella entity. Family offices use VCCs because they enable the ring-fencing of different asset classes and investor mandates, reduce administrative duplication across jurisdictions, and provide a MAS-regulated domicile that is recognised by institutional counterparties across Asia and beyond. The VCC framework was introduced in 2020 and has seen rapid adoption among single-family offices and multi-family offices based in Singapore.

How does CFIUS affect family office investments in the United States?

The Committee on Foreign Investment in the United States (CFIUS) is a US government body that reviews foreign investments for national security implications. Under the Foreign Investment Risk Review Modernization Act of 2018, CFIUS expanded its jurisdiction to cover minority investments in sensitive technology, infrastructure, and data companies. For Asia-based family offices with Chinese beneficial owners or significant Chinese LP bases, CFIUS review can delay or block investments in US venture capital and private equity funds. Family offices should conduct CFIUS screening as part of their standard due diligence before committing to US-domiciled fund structures.

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