The last summit between US President Joe Biden and Chinese President Xi Jinping took place a year ago in Jakarta, on the sidelines of the G20 summit. At that time, China’s gross domestic product (GDP) was 71% of the US GDP. However, the situation changed after the recent San Francisco summit, which can be described as a “conflict summit” between the two leaders.
Both countries are exhausted by the ongoing conflict in Ukraine and Gaza. Washington, which supports both Ukraine and Israel, suffers from a severe shortage of ammunition and military equipment due to the increasing demands of the Ukrainian war. Biden also faces a lot of internal pressure, both from the public and the officials, for his mismanagement of the Russian-Ukrainian conflict, which worsened after he approved support for Israel in its war on Gaza. This has negatively affected the Democratic Party’s chances of winning a second presidential term, which Biden has been dreaming of since the early 1980s.
On the other hand, China has adopted a rational policy that enabled it to overcome many of the crises caused by the global shift to a multipolar world. Although the International Monetary Fund’s economic estimates indicate that China’s GDP is now about 65% of the US GDP, which is 6% less than last year, China has managed to contain the problems of the real estate sector and prevent them from spreading to the financial sector. China has also broken the US blockade on chips by producing advanced, locally made chips for Huawei’s fifth-generation phones. Chinese apps still dominate the list of the top five downloaded apps in the US App Store. China has also led the expansion of the BRICS bloc, which now includes Egypt, Iran, Saudi Arabia, and the United Arab Emirates. The expanded bloc aims to deepen the global integration of emerging economies and reduce the dependence on the US dollar.
With Russia’s current weakness, China has turned to the Arctic Ocean by establishing the Polar Silk Road, to exploit the abundant energy resources and open a new trade route that connects Asia and Europe through the Arctic Ocean. China considers Vladivostok to be the Hong Kong of northern Eurasia.
China’s main challenges are deflation, weak exports, foreign capital outflow, exchange rate depreciation, and compounding economic shocks. These challenges have been the focus of Xi Jinping’s nation-building efforts. Since the US is still China’s largest economic partner, Xi needs to convince the US that China remains an attractive investment destination and a large consumer market.
China’s priorities include the following: reversing the US ban on Chinese chips, avoiding US restrictions that prevent other countries from selling chip-making products to China, removing hundreds of Chinese companies and research institutes from the US blacklists and entity lists, renegotiating tariffs to boost its exports, ensuring the continued flow of US capital into its domestic financial markets, and restoring Hong Kong’s status as a global free trade hub for China.
China’s core interest from a security perspective is Taiwan. With the presidential elections approaching next January, Xi Jinping hopes that Biden will issue a strong statement to the presidential candidates in Taiwan, affirming the US’s official opposition to Taiwan’s independence. Although President Biden has repeatedly stated that “the US does not support Taiwan’s independence,” these statements are not enough for China, which wants the US to explicitly reject any attempt by Taiwan to secede.
For President Biden, a face-to-face meeting with his arch-global rival is an opportunity to showcase his country’s and his strength. Taiwan is also a key issue for the US, which wants to ensure that China does not miscalculate the risks of military provocations across the Taiwan Strait.
China is focusing on revitalizing its economy with support from the US, while the US is seeking to build a security network to prevent wars from breaking out in the Indo-Pacific region. The meeting between Biden and Xi is expected to highlight the trade-off between China’s economic interests and the US’s security interests.
Neither Biden nor Xi Jinping was able to achieve a moral victory at the San Francisco meeting, but they could agree on one or two issues of mutual importance. This will mean that the transition to a multipolar world may take longer than the periods after World War II or the collapse of the former Soviet Union, and this may lead to more regional and international crises. Until then, we can only hope for the best.