U.S. President Joe Biden and Chinese President Xi Jinping met for four hours on the margins of the Asia-Pacific Economic Cooperation (APEC) forum in San Francisco, discussing a wide range of issues from Taiwan to the South China Sea, the wars in Ukraine and the Middle East, economic relations, military-to-military communications, artificial intelligence, and the opioid epidemic. The scope of the agenda reflects the perilous state of the world and the importance of a functional U.S.-China relationship to addressing international challenges or at least ensuring they do not get worse. Viewed from another perspective, though, the low expectations that both sides set for the meeting is a stark reminder that the world’s two largest economies disagree on nearly all of the most consequential issues.
Both Biden and Xi pursued this meeting hoping to establish parameters on U.S.-China competition and avoid a continued deterioration in relations that would make a crisis or conflict more likely. With concrete deliverables ranging from the resumption of military-to-military talks to a working group on artificial intelligence, cooperation on combatting fentanyl, and new commitments on addressing climate change, the two leaders likely achieved their objective. At the same time, however, this does not erase the fact that Washington and Beijing are engaged in a long-term strategic competition that is driven by structural factors and shows no sign of abating. With elections looming in Taiwan, increasing Chinese pressure on the Philippines in the South China Sea, and wars raging in Europe and the Middle East, any reduction in tensions is likely to prove short-lived.
The Road to San Francisco
Biden and Xi met one year and one day after their last interaction, a meeting on the margins of the G20 summit in Bali. Since then, a lot has transpired in U.S.-China relations. In February, the United States shot down a Chinese spy balloon that was flying over the country, prompting Secretary of State Antony Blinken to postpone his trip to Beijing and putting high-level interactions on hold. Beginning over the summer, though, senior Biden administration officials began traveling to Beijing, from Secretary Blinken to Secretary of Commerce Gina Raimondo and Secretary of the Treasury Janet Yellen. National Security Advisor Jake Sullivan held extensive talks with China’s top diplomat Wang Yi, who also recently traveled to Washington to lay the groundwork for Xi’s trip to San Francisco.
These senior-level interactions have been accompanied by working-level meetings. Two weeks ago, the State Department’s China Coordinator traveled to Beijing for a discussion on maritime issues. Special Presidential Envoy for Climate John Kerry hosted his counterpart Xie Zhenhua in California. Just last week, the Assistant Secretary of State for the Bureau of Arms Control, Verification and Compliance hosted talks in Washington with her Chinese counterpart on arms control and nonproliferation.
For Xi, meeting with Biden on American soil had important symbolic value. At a time when he is facing growing headwinds, Xi will use this meeting to present himself to the Chinese people as a statesman who is equal to the American president and can ably steer Chinese foreign policy. Xi also likely hopes that the deliverables stemming from this meeting can prevent or delay the imposition of new export controls that would exacerbate China’s economic issues.
Biden, heading into a reelection campaign and contending with wars in Europe and the Middle East, was wagering that improved U.S.-China relations would lessen the chances of a conflict erupting in the Indo-Pacific, either due to an unintended incident at sea or in the air or Chinese aggression against the Philippines or Taiwan.
When dealing with such a top-heavy political system as China’s, where one cannot be sure what information is getting to Xi or how it is being presented to him, leader-level interactions are a critical way to relay concerns, send signals, and get a sense of how the ultimate decision-maker is thinking about issues. A leader conveying his strategic intent directly to his counterpart is often more important than any concrete deliverable, and this could very well prove to be the case here.
The most contentious issue between the two sides and one where it is safe to say neither came any closer to adopting the other’s stance is Taiwan. Like his predecessors, Xi defines Taiwan as a “core interest.” He has explicitly linked unification with Taiwan to his goal of “national rejuvenation,” while also stating that the Taiwan question cannot continue to be passed from generation to generation. For the past seven-plus years, there has not been any official communication between China and Taiwan, and over that same period China has dramatically increased its military, economic, and diplomatic coercion of the island. Responding to such pressure, U.S. support for Taiwan has increased through elevated security and economic ties and high-level interactions.
Against this backdrop, Taiwanese voters will choose their next president in under two months. China deeply distrusts the leading candidate, Vice President William Lai of the ruling Democratic Progressive Party (DPP), who has in the past called himself a “pragmatic worker for Taiwan independence” and opined that “when Taiwan’s president can enter the White House, the political goal that we’re pursuing will have been achieved.” Although Lai has subsequently stated that “it is not necessary to declare independence” and “there are no plans to change the name of our country,” if he wins the election China will likely take its pressure campaign to new levels.
Both Xi and Biden repeated well-worn talking points on Taiwan. According to China’s official readout, Xi “elaborated on the principled position on the Taiwan issue in depth, pointing out that the Taiwan issue has always been the most important and sensitive issue in Sino-U.S. relations. China attaches great importance to the relevant positive statements made by the United States during the Bali meeting. The United States should embody its stance of not supporting ‘Taiwan independence’ in concrete actions, stop arming Taiwan, and support China’s peaceful reunification. China will eventually be reunified and will inevitably be reunified.”
According to the U.S. readout, Biden “emphasized that our one China policy has not changed and has been consistent across decades and administrations. He reiterated that the United States opposes any unilateral changes to the status quo from either side, that we expect cross-strait differences to be resolved by peaceful means, and that the world has an interest in peace and stability in the Taiwan Strait. He called for restraint in the PRC’s use of military activity in and around the Taiwan Strait.”
This language, however, is softer than that used in the U.S. readout following Biden’s meeting with Xi in Bali, which noted Biden “raised U.S. objections to the PRC’s coercive and increasingly aggressive actions toward Taiwan, which undermine peace and stability across the Taiwan Strait and in the broader region, and jeopardize global prosperity.”
The difference in readouts over the course of one year, despite Chinese pressure on Taiwan intensifying during that interval, will be sure to worry Taipei. More worryingly, despite saying on four occasions that he would defend Taiwan from Chinese aggression, when asked a similar question in the press conference following the meeting Biden punted. While Biden noted that he raised his objection to potential Chinese interference in Taiwan’s elections, his press conference and China’s mention of “positive statements made by the United States” on Taiwan will likely cause consternation in Taipei.
It’s the Economy
Beyond the desire to convey an image of a statesman who is able to deftly navigate China’s most important relationship, Xi also sought a meeting with Biden in hopes of lessening the pressure on China’s economy. An array of indicators reveal that China’s economy is struggling: economic growth is slowing, net exports are down, the property sector is on the verge of collapse, the country is burdened by high debt, youth unemployment was last reported to be over 20 percent (after which the government announced that it would stop publishing that statistic), and foreign direct investment has turned negative for the first time in decades.
U.S. policies, above all restrictions on the export of advanced technologies (most importantly semiconductors) and controls on outbound investment have exacerbated China’s homegrown economic problems. Xi complained about these policies to Biden, arguing that “the United States has continuously taken measures against China in terms of export controls, investment reviews, and unilateral sanctions, which have seriously damaged China's legitimate interests…We hope that the United States will take China’s concerns seriously, take action, lift unilateral sanctions, and provide a fair, just and non-discriminatory environment for Chinese companies.”
Xi’s aim is to prevent the Biden administration from expanding the export and investment restrictions and leave as much U.S.-China trade untouched as possible. As investors lose confidence in China due to its turn away from markets, raids on foreign businesses, and detention of businesspeople, Xi also wanted to convey that China remains open for business. Xi’s dinner in San Francisco with business executives is another way of delivering this message. Xi’s appeal to Biden on the issue of export controls and investment restrictions, however, likely fell on deaf ears.
The Phone Is Ringing – Will Anyone Pick Up?
Military-to-military communication between the United States and China has often been the first thing to go during periods of heightened tension, when such channels are needed the most. In August 2022, after then-U.S. House Speaker Nancy Pelosi visited Taiwan, China shut down all military-to-military communication with the United States.
The United States has repeatedly asked China to reopen military-to-military communications, concerned that there could be an incident between the two militaries that could spiral. The Department of Defense has documented “over 180 instances of PLA coercive and risky air intercepts against U.S. aircraft in the region” over the past two years, which is more than occurred over the previous decade.
Until now, China refused to reopen such channels. At this meeting, though, Xi agreed to restore high-level military-to-military dialogue as well as the three specific military-to-military engagements that were canceled in 2022.
While this is a welcome development, its significance should not be overstated. China continues to view such exchanges as a favor that it bestows on the United States and one that should be revoked when the United States does something that it objects to. It is highly unlikely that military-to-military communications would be operative during a crisis; at that time, any call to the People’s Liberation Army (PLA) will likely go unanswered until Xi has decided how to respond.
The core issue remains that each side holds a fundamentally different conception regarding the role of military-to-military hotlines and routine talks. For the United States, such mechanisms ensure that militaries act professionally, minimize the chances of an incident, and can help deescalate an inadvertent collision if one nonetheless occurs. From China’s perspective, the United States is asking for reliable communications channels because it wants to reduce the risk to itself of operating close to China. Seen from this vantage point, the United States is looking for a seatbelt so it can drive recklessly, but if China refuses to provide such a seatbelt the United States will back away and stop conducting operations within the First Island Chain.
The first deliverable, detailing cooperation on addressing climate change, was presented even before Biden sat down with Xi. In the “Sunnylands Statement,” the world’s two largest carbon emitters agreed to “pursue efforts to triple renewable energy capacity globally by 2030” and “accelerate renewable energy deployment in their respective economies.” They also pledged to include methane in their 2035 climate goals, a step that China had previously been unwilling to take. The two countries also agreed to restart their bilateral climate working group that China suspended after Pelosi visited Taiwan. At the same time, China did not pledge to phase out its use of coal or halt construction of new coal-fired power plants. Nonetheless, the statement could pave the way for the United States and China to pursue something more ambitious under the auspices of the COP28 talks in two weeks.
Fentanyl-related deaths are now the leading cause of mortality among young Americans, while China is the leading supplier of the precursor chemicals that cartels in Mexico use to make the opioid. It should be no surprise, then, that addressing this scourge is a top priority for the Biden administration. The Department of the Treasury has sanctioned over 40 China-based persons connected to fentanyl trafficking, the Department of Justice has indicted and arrested Chinese citizens for fentanyl-related crimes, and in September 2023 Biden added China to the U.S. list of major drug transit or major illicit drug producing countries.
Prior to this meeting between Biden and Xi, Chinese cooperation on fentanyl had been halting and conditional. In 2019, China imposed controls over all fentanyl-related substances, which stopped the direct flow of Chinese-produced fentanyl to the United States (before China imposed these controls, it was the largest source of fentanyl in the United States). The United States and China also conducted joint investigations into fentanyl trafficking, while China allowed the U.S. Drug Enforcement Administration to expand its presence in the country. At the same time, however, after the U.S. Department of Commerce added an institute under China’s Ministry of Public Security to its Entity List due to its role in human rights violations in Xinjiang, Beijing backed away from further cooperation. Following Pelosi’s visit to Taiwan, China stopped all counternarcotics cooperation with the United States, clear evidence that Beijing views such cooperation as a favor to the United States and one that it can leverage in pursuit of other priorities.
Biden and Xi agreed to establish a bilateral counternarcotics working group. If China sincerely cooperates on this issue, the flow of fentanyl to the United States would decrease, which alone would make this meeting worthwhile. Given China’s history on this issue, however, one should be skeptical of the potential for meaningful progress.
The two sides also announced the creation of an intergovernmental dialogue on artificial intelligence (AI). The United States wants to discuss risk and safety issues associated with AI, especially as they pertain to the military uses of AI and nuclear command-and-control. Beijing, however, likely seeks a broader dialogue that it would try to use to prevent additional U.S. controls on AI-related technologies.
Ukraine, Gaza, and the South China Sea
Missing from China’s readout was any mention of the wars in Ukraine and Gaza or heightened tensions in the South China Sea. The U.S. readout, however, mentioned all of these areas. Biden “emphasized the United States’ enduring commitment to freedom of navigation and overflight, adherence to international law, maintaining peace and stability in the South China Sea and East China Sea” and “reaffirmed the United States’ ironclad commitment to defending our Indo-Pacific allies.” He also reaffirmed U.S. support for Ukraine and for “Israel’s right to defend itself against terrorism and emphasized the importance of all countries using their influence to prevent escalation and expansion of the conflict.” In each of these areas, the United States and China are on opposite sides and there is no sign that this gap will be bridged.
A Reset in U.S.-China Relations? Not So Fast
Xi is seeking a short-term, tactical pause in U.S.-China competition, hoping to buy time so that he can address China’s economic problems. Amidst any stabilization in U.S.-China relations, though, it is important to keep in mind that Xi’s conviction that the United States represents the primary threat to the Chinese Communist Party (CCP) remains unchanged. As Xi assessed in March, “Western countries led by the United States have implemented all-around containment, encirclement and suppression of China.” Xi likely still believes that the United States and the West more generally are in decline, while China is on the ascent; in his now-famous formulation, “the East is rising and the West is declining.” So long as these views remain fixed, the bilateral relationship will be marked by increasingly severe competition with periodic tactical pauses.
Making this judgment about the likely trajectory of U.S.-China relations, though, is not to say that a meeting between Biden and Xi was ill-advised. To the contrary, it should be seen as a positive development. Given China’s political system and the degree to which Xi has consolidated power, it is critical for the U.S. president to have direct, lengthy interactions with him. This provides an opportunity to get a better feel for how Xi sees the world and China’s place in it, directly convey U.S. concerns, and underscore commitment to U.S. alliances and partnerships. The meeting also sends an important signal to these allies and partners in the Indo-Pacific, principally that the United States is attempting to responsibly manage its relationship with China and is not seeking a conflict. In this instance, Biden also secured important deliverables on fentanyl, artificial intelligence, and military-to-military talks. The real litmus test for the durability of this easing of tensions, though, could come as soon as January 2024, when Taiwanese voters elect their next president.