The signal from the summit meeting between presidents Joe Biden and Xi Jinping in San Francisco on Wednesday is that a rocky year in the US-China relationship had a makeover in atmospherics. Serious differences remain and there is the also the challenge of navigating the two high-stakes presidential elections in 2024 — in Taiwan in January and in the US in November.
Both Washington and Beijing gave a positive account of the summit and were eager to display successful diplomacy. For Biden, there is great urgency to claim foreign policy success when the proxy war in Ukraine has been practically lost and another war just commenced in the Middle East. War, after all, is failure of diplomacy.
After the Summit, Biden hyped up saying his talks with Xi “were some of the most constructive and productive discussions we’ve had…we’ve made some important progress, I believe… And in the months ahead, we’re going to continue to preserve and pursue high-level diplomacy with the PRC in both directions to keep the lines of communication open, including between President Xi and me. He and I agreed that either one of us could pick up the phone, call directly, and we’d be heard immediately.” Biden ended his press conference calling Xi a dictator, but added the final remark, “Anyway, we made progress.”
The Chinese readout ended with an extraordinary summing up: “The meeting was positive, comprehensive and constructive. It has charted the course for improving and developing China-U.S. relations. And San Francisco should be a new starting point for stabilising China-U.S. relations. They [Xi and Biden] instructed their teams to build on the understandings reached in Bali and to timely follow up on and implement the new vision agreed on at San Francisco. The two heads of state agreed to continue their regular contact.”
The readout highlighted that Biden “warmly received” Xi, hosted a luncheon in his honour, and “escorted himto his limousine to bid farewell.” It said the two presidents had “a candid and in-depth exchange of views on strategic and overarching issues critical to the direction of China-U.S. relations and on major issues affecting world peace and development.”
The White House readout said, in turn, “The two leaders held a candid and constructive discussion on a range of bilateral and global issues including areas of potential cooperation and exchanged views on areas of difference.”
Although it was too much to expect a breakthrough in the relationship, the four-hour long talks produced some results — the two sides agreed to work together to control flows of narcotic drugs, resume military-to-military communications, cooperate on risks posed by artificial intelligence, and expand exchanges in education, business, and culture and increase the number of flights between their countries. Something is better than nothing. There was no joint statement issued after the summit.
Then, there is the vexed question, which neither side would dare discuss publicly — namely, China has begun to sell its vast holdings of US Treasury bonds. The damage a Chinese selloff could do to financial markets, to Washington’s finances, and to the economy generally needs no explanation. For decades, the US was a major consumer but since Americans were running a trade deficit, they needed to borrow to support the purchase of Chinese imports and Beijing advanced that loan indirectly through its purchases of US Treasury bonds. But the matrix has changed.
As it is, the demand for US bonds is not high, by any means — in fact, one of the most enthusiastic buyers of US bonds is the US Federal Reserve. This has been compared to something like having your own bakery and buying up most of your unsold bread at the end of the day so that a negative opinion of your sales does not form. The fact that Treasury Secretary Janet Yellen appeared in the front and centre of US-China relations is a signpost.
At San Francisco summit, neither side gave away anything at all. Xi asserted that no matter what US does, reunification of Taiwan is “inevitable.” Xi proposed “peaceful co-existence”, the chosen way of life between the Soviet Union and America, but Biden insisted that “the United States and China are in competition” and that the US “will always stand up for its interests, its values, and its allies and partners.”
If Beijing hoped for a return to the “Bali spirit,” Washington won’t even acknowledge any such thing. The US apparently has no recollection of Biden giving any such “five noes” assurances. The White House readout of the San Francisco meeting does not mention these assurances, either. Clearly, there are substantial gaps in strategic perception and mutual understanding. And there is reason to doubt whether any real negotiations took place at all during the 4 hours of conversation.
A close study of the two readouts — and the media reports later — gives the impression that primarily, Biden was grandstanding before his domestic political audience while Xi spoke with an eye on the global audience.
Biden demonstrated his readiness to hang tough on China and avoid any substantial or unilateral concessions, aside displaying that his vast experience in international diplomacy serves America’s interests optimally today and his agility of mind and attention span at 80 to withstand the rigours of personal diplomacy is not to be doubted.
For Xi, there was no such subjective consideration. He soared high, like Shelley’s skylark, springing from the earth “like a cloud of fire… like an unbodied joy whose race is just begun.” Xi’s was the voice of reason and cooperation that stood in sharp contrast with Biden’s confrontational approach. Xi exhorted that Washington and Beijing must “join hands to meet global challenges and promote global security and prosperity” rather than “cling to the zero-sum mentality” and thereby “drive the world toward turmoil and division.”
The western narrative is in shambles. Xi didn’t appear to be in a politically and diplomatically weak position, as China grapples with economic problems. Evidently, it isn’t the case, either, that he needed a “successful” summit more than Biden did. On the contrary, the San Francisco summit conveyed the resonant message that China has arrived as a global power.
However, although the summit didn’t appear to have made serious effort to reset the relationship by addressing each other’s vital interests and core concerns, it is a good thing that communication links have been reopened, which will be useful for managing the relationship and building “guardrails” around it and a “floor” under it.
Meanwhile, there is a sliver of hope that on the single most explosive issue potentially — Taiwan — fortuitous circumstances may calm the choppy waters. No doubt, the Taiwan election will be of pivotal importance for the US-China relationship, for, if the two main opposition parties, the Kuomintang (KMT) and the Taiwan People’s Party (TPP), who have finally decided to join hands, field a joint candidate in the January 13 election, it will be a formidable ticket assured of an easy victory.
That, of course, will impact the delicate dynamics of the Taiwan question, given the clear willingness of the KMT and TPP to jointly improve cross-strait dialogues after the election that offers the prospect of something of a welcome respite for the Washington-Beijing-Taipei triangle.
The big question remains: Did Biden succeed in affirming that notwithstanding the defeat in Ukraine war and the forever war just beginning in the Middle East, the US is in “a position of strength” in the relationship with China? Framed differently, is China paying heed to US entreaties to roll back its relations with Russia and Iran? The indications are to the contrary.