By Trevor Hunnicutt and Liz Lee
BEIJING, May 15 (Reuters) - U.S. President Donald Trump entered his final talks with Xi Jinping on Friday touting economic wins that gave markets little to cheer, while Beijing warned Washington about mishandling Taiwan and said its war with Iran should never have started.
Trump is making the first visit by a U.S. president to China, America's main strategic and economic rival, since his last in 2017, and has been seeking tangible results to beef up his dented approval ratings ahead of crucial midterm elections.
"We've made some fantastic trade deals, great for both countries," Trump said, seated beside Xi in a decorative red armchair at the opulent Zhongnanhai complex, a former imperial garden that houses the offices of Chinese leaders.
Earlier, they had chatted and strolled outside, with Trump remarking about the beautiful roses and Xi promising to send him seeds for the flowers, before a lunch of lobster balls, Kung Pao scallops and shrimp dumplings.
But as Trump prepared for his final meeting, China's foreign ministry issued a blunt statement outlining its frustration with the Iran war.
"This conflict, which should never have happened, has no reason to continue," the ministry said, adding that China was supporting efforts to reach a peace deal in a war that had severely affected energy supplies and the global economy.
At Zhongnanhai, Trump said the leaders had discussed Iran and felt "very similar", though Xi did not comment.
Trump had been expected to urge China to convince Iran to make a deal with Washington to end a war that has pushed up prices and made him politically vulnerable at home.
But analysts doubt Xi will be willing to push Tehran hard or end support for its military, given Iran’s value to Beijing as a strategic counterweight to the US.
A brief U.S. summary of Thursday's talks highlighted what the White House called the leaders' shared desire to reopen the Strait of Hormuz off Iran and Xi's apparent interest in American oil purchases to pare China's dependence on Middle East supply.
A fifth of global supplies of oil and liquefied natural gas travel through the Strait in normal times.
BOEING SHARES SLIDE ON UNDERWHELMING DEAL
U.S. officials said they had also agreed deals to sell farm goods, beef and energy to China, with progress on setting up mechanisms to manage future trade, and both sides expected to identify $30 billion of non-sensitive goods.
There were scant details of the deals, however, and no signs of a breakthrough on selling Nvidia's advanced H200 AI chips to China, despite CEO Jensen Huang's dramatic last-minute addition to the trip.
Trump told Fox News that China had agreed to order 200 Boeing jets, its first purchase of U.S.-made commercial jets in nearly a decade, but that was far short of the roughly 500 markets had expected, and Boeing shares fell more than 4%.
"For the market, the summit can be strategically reassuring while underwhelming in substance," said Chim Lee, senior China analyst at the Economist Intelligence Unit.
The main achievement of the summit may be maintaining a fragile trade truce struck when the leaders last met in October and Trump suspended triple-digit tariffs on Chinese goods while Xi backed away from choking off supplies of vital rare earths.
U.S. Trade Representative Jamieson Greer, accompanying Trump, told Bloomberg TV on Friday it had not yet been decided whether to extend the truce beyond its expiry later this year.
STARK WARNING ON TAIWAN
Xi's remarks to Trump that mishandling Taiwan, the democratically governed island Beijing claims, could lead to conflict, delivered a sharp, if not unprecedented, warning during a summit that otherwise appeared friendly and relaxed.
Taiwan, which lies just 50 miles (80 km) off China's coast, has long been a flashpoint in U.S.-China ties, with Beijing refusing to rule out the use of military force to gain control of the island and the United States bound by law to provide Taipei with the means to defend itself.
"U.S. policy on the issue of Taiwan is unchanged as of today," Secretary of State Marco Rubio, who is also traveling with Trump, told NBC News, adding the Chinese "always raise it ... we always make clear our position and we move on."
Taiwan Foreign Minister Lin Chia-lung thanked the United States on Friday for repeatedly expressing its support.
The China-U.S. relationship is the most important in the world, Xi said at Thursday's lavish state banquet, adding, "We must make it work and never mess it up."
JAILED CHINA CRITIC JIMMY LAI
Rubio said Trump had brought up with Xi the issue of Hong Kong's most vocal China critic, media tycoon Jimmy Lai, sentenced in February to 20 years in jail, in the Asian financial hub's biggest national security case.
"The president always raises that case and a couple others, and obviously we’ll hope to get a positive response from that," Rubio told NBC News.
"We'd be open to any arrangement that would work for them, as long as he's given his freedom," he said of Lai, who has denied all the charges against him.
Hong Kong affairs are an internal matter for China, the foreign ministry has said previously when asked about Lai.
(Reporting by Trevor Hunnicutt, Liz Lee, Antoni Slodkowski and Mei Mei Chu in Beijing; Ben Blanchard in Taipei; Writing by David Brunnstrom and John Geddie; Editing by Alistair Bell, Lincoln Feast and Clarence Fernandez)
