Decoding Biden-Xi summit: Chinese president wanted it more but made it appear as if he did Americans a big favour

Given China’s status as America’s peer competitor, the acrimonious nature of bilateral ties and the increasingly intractable positioning of the world’s top two economies as rival blocs bent on great power competition, some would say that the fact that Joe Biden and Xi Jinping even managed to sit across the table was in itself a great achievement. Commentators such as Harvard University professor Graham Allison are calling the summit an attempt at avoiding World War 3. Beyond the apocalyptic framing lies an unstated fear that in China, the United States is finally faced with a competitor that has the intention and the ability to throw a formidable military, economic, technological, diplomatic, and ideological challenge to its supremacy. To quote professor John Mearsheimer, “China is already closer to the US in terms of latent power than the Soviet Union ever was.” With its hegemony under threat and insecurity heightened, the US has embarked on a range of policies to control and limit the speed and extent of China’s rise. It has, for instance, made it difficult for China to benefit from American innovation and technological advancement especially in the field of semiconductors, sparking resentment, victimhood and determination in an ambitious China that aims to supplant the US in setting the terms of the global order. The Biden administration went into the meeting keeping expectations as low as possible. While that created an impression that the summit was ‘productive’, the incremental progress cannot hide structural differences where the trend signals widening chasms. For instance, even as Biden hosted Xi — their first face-to-face interaction since Bali in 2022 — American resolve to shore up alliances and partnerships to counter China’s aggression remains strong. A few hours after the meeting concluded at the Filoli estate, a plush wedding venue for the well-heeled, top Pentagon official Ely Ratner pointed out on X (formerly Twitter) that “in just 43 days, (US defense) secretary Austin has met face-to-face with his counterparts from Australia, Japan, the Republic of Korea, the Philippines, and Thailand — all five US treaty allies in the Indo-Pacific. This is what enduring commitment to the region looks like.” In August this year, the Biden administration clamped down on US investments in China to degrade Beijing’s ability to achieve quantum leaps in military and surveillance technologies, which Washington fears may be detrimental to its national security. The order, that scrutinizes US investments in Chinese semiconductor, quantum computing and artificial intelligence companies, was further refined to close a few loopholes last month. According to Bloomberg, the updated law “will impose additional checks on Chinese firms attempting to evade export restrictions by routing shipments through other nations”. Meanwhile, US Department of Defense’s 2023 annual report on China’s military power recognizes Beijing’s growing military strength and estimates that China already possesses more than 500 operational nuclear warheads as of May 2023 and that number may exceed “1,000 operational nuclear warheads by 2030.” It has led the Pentagon to embark on ambitious plans such as developing a “vast network of AI-powered technology, drones and autonomous systems within the next two years to counter threats from China.” The US is also moving away from human-operated systems to more autonomous deployments to counter Chinese threat and is bolstering its hypersonic weapons program. As Hal Brands writes in Bloomberg, “in the past year, the Pentagon has unveiled new weapons programs, such as its ‘replicator’ drone initiative, aimed at China. Washington has concluded new basing agreements in Asia and engaged in tireless diplomacy to rally coalitions — military, economic, diplomatic, technological — against Beijing.” Considering the context, it may therefore seem that the meeting between the geopolitical rivals in San Francisco at a lush country estate featuring 654 acres of greenery was the sign of a weary hiatus for stability in ties and perhaps even a reset, even if limited in scope. Such a surmise would be a mistake. The San Francisco sojourn — Xi’s first visit to the US in more than six years and Biden’s second in-person meeting with Xi as the US president — was no turning point. It signals no significant structural shift or even a notional change in the trajectory of ties. Let’s see why. Both Biden and Xi had put on their best behaviour, with Biden even sharing a joke about his own presidential vehicle while admiring Xi’s Chinese-made luxury limo ahead of the talks. This was far removed from the bad blood on display during the high-level dialogue in Alaska in 2021 when angry words were exchanged between US secretary of state Antony Blinken and national security adviser Jake Sullivan on the US side, and China’s then seniormost foreign policy official Yang Jiechi and foreign minister Wang Yi. Usually, chummy summits between top leaders result in joint statements. In this case, there were none. In the separate readouts issued after the meeting that lasted nearly four hours, both sides stuck steadfast to their stated positions on contentious issues such as Taiwan, human rights or American moves to keep state-of-the-art chips out of China’s reach. For instance, the readout released by the White House states that America’s “one China policy has not changed” but reiterates immediately that “the United States opposes any unilateral changes to the status quo from either side”, that it expects “cross-strait differences to be resolved by peaceful means, and that the world has an interest in peace and stability in the Taiwan Strait.” The US side also called for “restraint in the PRC’s use of military activity in and around the Taiwan Strait” and stated that “the United States will continue to take necessary actions to prevent advanced US technologies from being used to undermine our own national security, without unduly limiting trade and investment.” Along with this stance was Biden’s off-the-cuff remarks at the post-meeting press conference where in answer to a question he again called Xi a “dictator”, eliciting a grimace from Blinken who was caught in a candid camera moment and inviting a sharp retort from China that called the US president’s quip “extremely wrong and irresponsible”. And just the day after the summit, Biden told executives at the APEC Summit that the US has “ real differences” with China.

Blinken's face after Joe Biden calls Chinese President Xi a "dictator" 😂😂😂 pic.twitter.com/XqjQU9FmZd

— Jason Howerton (@jason_howerton) November 16, 2023

Underlining the fact that one dialogue or two, or even smart policymaking cannot settle differences that are structural and tensions that are deep lying, the Chinese statement bluntly asks the US not to “scheme to suppress and contain China.” The statement, released in English by the Chinese foreign ministry, says the US “should take real actions to honor its commitment of not supporting ‘Taiwan independence’, stop arming Taiwan, and support China’s peaceful reunification”, and calls China’s reunification “unstoppable.” Hitting out at Biden administration’s moves such as CHIPS Act designed to cripple China’s own semiconductor industry, the Chinese statement says “president Xi Jinping pointed out that US actions against China regarding export control, investment screening and unilateral sanctions seriously hurt China’s legitimate interests” and “stifling China’s technological progress is nothing but a move to contain China’s high-quality development and deprive the Chinese people of their right to development.” If the much-hyped summit failed to arrest a declining relationship, was it an exercise in futility? Not quite. To the extent that an earnest diplomatic manouvre can accomplish, Wednesday’s meeting between Biden and Xi achieved a tactical pause in hostilities driven by motivations that are entirely different for both sides. The enormous political and diplomatic capital that was spent in making this meeting a reality pointed to a curious moment in history when the top two powers appear tired of a confrontational posture and while they won’t be caught napping, each wishes that the other would provide a bit of breathing space. It wasn’t just the high-level visits to Beijing by top Biden administration officials, or Wang Yi’s meeting with American counterparts in Washington, reports are emerging that months of intricate planning went in logistics and scheduling everything down to the minutest detail before Xi embarked on an aeroplane to San Francisco, including, as CNN reports, “deciding beforehand where Xi would sit and what he might see out of the window at any given moment”. The carefully choreographed meeting offered modest gains for Biden at a time when America’s diplomatic heft, resources and attention appear stretched due to its close involvement in two fierce wars in two different theatres. With Ukraine in limbo and the Israel-Hamas war threatening to snowball into a bigger regional conflict and its own defence-industrial base spread thin, the last thing the Biden administration needs is a ratcheting up of tension with a militarily powerful China in Asia, and yet another crisis going into the election year. For Biden, at least, high-level diplomacy offers the promise of risk mitigation, ensuring that “competition does not veer into conflict” and the reaping of a few low-hanging fruits without falling at the sharp end of Republican rhetoric over cozying up to China. He came out of the meeting counting modest positives in improving cooperation on counternarcotics — a particularly sticky problem for Biden given the political ramifications of failing to stop deadly fentanyl opioid sourced from China, securing the resumption of direct military-to-military communication, a hotline with Xi and the initiation of a dialogue to discuss risk and safety issues associated with artificial intelligence. Added to this is the promised cooperation on climate change ahead of Cop 28 and Biden may feel that he has pulled off a tough balancing act. Though the core issues driving distrust, competition and great power rivalry remain unaddressed, the act of putting a floor in the relationship, one of the key aims of Biden administration to show that it has managed well a critical relationship where controlling the levers of escalation is no mean feat. For Xi, the need for the summit arose from a completely different set of prerogatives rooted for the most part in China’s faltering economy and the sense of pervasive dread that threatens his promised ‘China Dream’. This is a particularly dangerous problem for Xi who has fashioned himself as CCP’s ‘core leader’ and degraded all rival power centres within the Chinese Communist Party, creating a situation where he commands total loyalty and absolute power. The flip side of this concentration of power is that there’s no one to blame for China’s deep economic malaise caused by a deepening housing market crisis that is spreading like gangrene and sucking out the various stimulus measures offered by policymakers. According to a recent Bloomberg report, “China’s home prices fell the most in eight years in October, signaling the property slump is worsening even after the government ramped up efforts to revive demand” and the recorded decrease in 70 cities “was the steepest since February 2015.” With youth unemployment at record high of more than 20% before the Xi regime stopped releasing the data since August, and more and more university graduates showing a marked lack of urgency in seeking employment — a social phenomenon that has been called ‘lying flat’ — the Chinese economy appears bleak and caught in the grip of a vicious cycle. As South China Morning Post observes, “the worsening youth joblessness is rooted in the country’s weak economic recovery following the pandemic, with dwindling export orders and foreign investment; shrinking consumer demand; and debt-ridden local governments – lingering scars from three years under China’s restrictive zero-Covid policy.” Compounding the problem is a slump in fertility that promises to shrink the already depressed labour market even further and a toxic business environment for foreign firms and businesses that are being hounded by a new, draconian national security law. As a report in The Conversation points out, China’s new anti-espionage law “broadens the scope beyond what it originally sought to prohibit – leaks of state secrets and intelligence – to include any “documents, data, materials, or items related to national security and interests”. Armed with this harsh piece legislation that gives them wide scope to surveil emails or even social media accounts on electronic devices, Chinese officials are raiding the offices of foreign businesses to “catch spies” and at the receiving end has been American firms whose employees (Chinese nationals) were detained in June. The net effect of these drastic decisions by a paranoid Xi regime and a lasting economic downturn is the erosion of optimism and pervasive scepticism over the health of Chinese economy. Foreign firms are pulling out billions in profits instead of reinvesting in China, while foreign direct investment has suffered its biggest decline since monthly figures became available in 2014, crashing 34 per cent to Rmb 72.8 billion ($ 10 billion) year on year in September, according to Financial Times. Short point: Xi is in a soup entirely of his own making, and increasingly desperate to turn around the economic depression if only to secure his political future. He is entering into a state of permanent paranoia driven by an insecurity that a prolonged economic distress and subsequent collapse of the socio-economic contract may brew dissent and cause the Chinese people to turn against the party — a lesson the CCP has internalized from its obsession with the fall of the USSR. To do that, Xi must convince the American tycoons that it is safe to do business in China. Once again, the collapse of USSR has taught the CCP that a purebred socialist economy that operates in a domestic silo is ripe for the picking, and therefore “capitalism with Chinese characteristics” merits that Chinese economy must remain intrinsically integrated with the global economy — which means the door for foreign investment must remain open. Xi’s primary task and the key reason behind the trip, therefore, was to woo the US business community. This may explain why the Chinese president, who refused for weeks to receive even a phone call from Biden, was ready for a face-to-face meeting on the sidelines of APEC Summit. The desperation on Xi’s part was further evident from the fact that China wanted Xi’s meeting with American CEOs to precede the tete-a-tete with Biden. Wall Street Journal reports that White House shot down the Chinee request for the banquet meeting to be held first, following which Beijing backed down and rescheduled the dinner. To Xi’s credit, he managed to camouflage his desperation and made it appear as he’s the one holding all the cards and the Americans should be grateful that he allowed them the opportunity to host his Royal Highness the Emperor of Middle Kingdom. The needless fuss over Biden’s ‘dictator’ remark (an accurante description of CCP chairman Xi) in American media further cemented the impression, as if fearful that Biden has upset all carefully laid plans with that one remark. China’s economy is at such an advanced state of decay that Xi badly needs to create a welcoming business environment. He set about his task by delivering a masterclass in propaganda during his address at the banquet with business executives where he laid on thick the charm offensive and uttered the words “friend”, “friendship” or “friendly” no less than 15 times. Normally a taciturn individual given to dry, cold lecturing, Xi’s exceptionally warm speech before the corporate chieftains of America — that included the cream of the crop in Apple’s Tim Cook and BlackRock’s Larry Fink, along with senior leaders from Qualcomm, Boeing, Blackstone, KKR, Pfizer, FedEx and others, not to speak of Tesla CEO Elon Musk — was aimed at allaying their fears and saying the right things before an audience eager to keep doing business in China and tripping over each other to applaud Xi. In the end, Xi probably didn’t even need to utter statements that stretch even the outer limits of incredulity such as: “Throughout the 70 years and more since the founding of the People’s Republic, China has not provoked a conflict or war, or occupied a single inch of foreign land.” All he needed to do was mouth a few inane platitudes on “win-win cooperation”, dangle the carrot of China’s “super-large economy and a super-large market”, throw in panda diplomacy for the hall to erupt in repeated standing ovation. In balance, though the summit was a necessity for both leaders, Xi wanted it more but ended up convincing Americans that he did them a favour and sealing a PR victory to be sold back home to domestic audience. That’s the kind of ‘win-win’ cooperation Xi lives for. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views. 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