> Xi knows the Chinese economy must rebalance for domestic reasons
China lacks the middle class to be able to absorb the rebalancing.
> Chinese investors are eager to invest more in US assets and companies.
CFIUS already rejected most of the intended Chinese government purchases of US companies via shell companies.
> Xi's new power suggests he'll enjoy the authority and longevity necessary to complete China's adjustment
Xi has been aiming for dictatorship ever since he came to power, under the guise of 'routing out corruption'. that was long before stock market collapse. It's good US is crippling this dictator's desire to grow any stronger. Look no further to the uigher concentration camps to see the fate that could befall any western countries around the world.
> I don't think China has sufficient reserves in-place for a trade war
Correct. They are a cash-flow economy. Any small decrease in cash flow will severely crash it.