Recent diplomatic engagement, including the late September 2026 Xi-Trump summit that produced extensions on trade talks, an AI safety channel, and progress toward military crisis communications, has reinforced trader expectations against a direct US-China clash before 2027. Ongoing gray-zone activities such as expanded Chinese coast guard patrols east of Taiwan and limited live-fire drills continue without crossing into open conflict, while internal PLA purges have raised questions about near-term readiness. Both sides maintain incentives to manage risks through existing channels amid broader economic interdependence. Low-probability shifts could still arise from miscalculation during routine operations, rapid changes in Taiwan policy, or unforeseen incidents that outpace current de-escalation mechanisms.