Biden himself referred to it but it was to reassure American business that he was not taking a major step to weaken the business links between the US and China. Biden told business leaders that the U.S. was “de-risking and diversifying” but not “decoupling” from Beijing. “A stable relationship between the world’s two largest economies is not merely good for the two economies but for the world,” Biden said. “A stable relationship. It’s good for everyone.”
Major US companies have thrown their weight against the idea of decoupling from China, and Biden would definitely listen to them in an election year. A major part of the American companies in the Fortune 500 list sees China either as an important market or production base and cannot afford any form of decoupling.
It is curious how both the leaders had the interest of business uppermost in their minds though the two countries are wrestling with several security-related differences.
There is "plenty of room for our corporations, and we are fully able to help each other succeed and achieve win-win outcomes," Xi told the APEC CEO summit, which took place in San Francesco at the same time he had a bilateral meeting with the US president. "We invite friends from business communities across the world to invest and deepen your footprint in China," he added.
Trade and political conflict with the US are taking away a lot of time that the Chinese president would like to use to shore up a sliding economy, rising unemployment and signs of social unrest in some parts of China. A reduction in the continued bickering between the two countries would be welcome for Xi Jinping. "Conflict and confrontation have unbearable consequences for both sides," the Chinese leader told Biden.
Greeting the ‘dictator’
"I know the man. I know his modus operandi," Biden said about Xi. "He's a dictator in the sense that he — he is a guy who runs a country that — it's a communist country that is based on a form of government totally different than ours."
China’s Ministry of Foreign Affairs lashed out at the comment describing it as “extremely incorrect and irresponsible political manipulation.” “There are always some careless individuals attempting to sow discord and damage China-U.S. relations, but their attempts will not succeed,” said Mao Ning, the China Ministry of Foreign Affairs spokesperson.
The two leaders covered 20 odd topics during their four-hour meeting that included a walk in a wooded park in San Francisco on November 15. There were specific agreements on five of those issues. The two governments spoke in generalities about the rest of the issues.
Biden did not give Xi what he was particularly looking forward to, which is a relaxation of US restrictions on Chinese companies particularly those in the high-tech sector. He cannot afford to relax controls after telling American voters that China has grown by stealing technology from the US. “The President emphasized that the United States would continue to take necessary actions to prevent advanced U.S. technologies from being used to undermine our own national security, without unduly limiting trade and investment,” a White House readout said.
On the other hand, Xi agreed to Biden’s request for the resumption of military communication between the two countries. Beijing had cut off the communication link last year after American officials made adverse remarks about China’s claim over Taiwan. “During the Cold War, the United States and the Soviet Union always maintained military-to-military communication to avoid any accident or misreading of intent that could cause a war between nuclear powers," said Mick Mulroy, a former US Deputy Assistant Secretary of Defence. "This needs to also be the case now between China and the US."
There was no headway in US efforts to rope in China to persuade Iran to stay out of the Israel-Palestine conflict. China has considerable influence over Tehran as it is the biggest buyer of Iranian oil but Xi refused to be drawn into this situation.
Both countries continue with their rigid stance on Taiwan refusing to see each other’s point of view. Biden called for restraint in China’s use of military activity in and around the Taiwan Strait.
Xi also accepted another of Biden’s suggestions that the two countries co-operate to fight trafficking in illegal fentanyl which are pain killers abused by drug addicts in the US. China-based factories are known to be one of the major sources of illegal fentanyl. The US saw 75,000 drug-related deaths last year with the synthetic opioid contributing to it. It remains unclear if Beijing would crack down on dozens of drug manufacturers that employ thousands of people.
The world’s worst carbon emitters also agreed to work together on climate change by slowing methane emissions - a particularly potent greenhouse gas - and triple renewable energy by 2030.
The Chinese president said he is open to the idea of gifting giant pandas, the cuddly bears which are a national treasure in China. The National Zoo in Washington DC this month returned three giant pandas as per a loan agreement with a Chinese zoo. "Pandas have long been envoys of friendship between the Chinese and American peoples," Xi said at a meeting of business leaders. "I was told that many American people, especially children, were really reluctant to say goodbye to the pandas, and went to the zoo to see them off".
In short, it’s a truce, perhaps a temporary one. Biden will face an election within a year and a temporary truce is perhaps the best Xi can hope for. As for the markets, neither the Shanghai Composite nor the Hang Seng have really done anything in the past week, despite the Biden-Xi show of bonhomie. All this is at best, to quote Goldman Sachs’2024 outlook note, ‘’Temporary Relief from China’s Multi-Year Slowdown”.
Saibal Dasgupta was the China correspondent for the Times of India in Beijing for 14 years. He has also reported for Asiamoney and Euromoney in Hong Kong and was the Asia editor in Singapore for www.complinet.com, a London-based web portal on financial compliance. Views are personal and do not represent the stand of this publication.
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