“In fact this is a huge disrespect to Obama. “
Nothing to do with Obama or Trump. It is about Xi.
Chinese Communists have never hosted anyone there. In fact they purposely would not. They formerly would have such a dinner, as with Reagan, at the Great a Hall of the People.
This is for internal Chinese consumption and the symbolism of Xi, after recently consolidating power in the Communist state, and the symbolism of a Communist Chinese leader holding a State dinner in the Imperial Palace for the first time ever rather than in the Great Hall of the People is not lost on the Chinese public.
But wouldn’t that same concept have been applicable throughout history with Presidents.