As China’s top leaders huddled on their annual  summer retreat on August 3, US President Donald Trump loomed large over their deliberations.

Just two days earlier, Trump administration officials had said they were considering taxing Chinese exports worth $200bn at 25 per cent — compared to a previously announced tariff of 10 per cent. The world’s two largest economies had formally started trade hostilities in July, when they slapped punitive duties on $34bn of each other’s exports.

Chinese officials hoped their unwanted trade war with the US would pause there, at least for the summer. “Everyone has been surprised by Trump,” said one Chinese economist who is close to Beijing policymakers. “Most Chinese officials assumed that Trump was just trying to push the boundary but would eventually back off.”