Xi-Biden at APEC: A reset in relations, but for how long?

U.S. President Joe Biden and Chinese President Xi Jinping met for the first time in a year on November 15th on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum’s summit in San Francisco. It was a relief for the world that the meeting between the two superpowers not only took place but also produced more concrete results than expected. The systemic conflict underlying U.S.-China relations and resulting divisions on key international issues, however, will not go away. With Biden calling Xi a “dictator” again shortly after their meeting, relief could indeed be short-lived.

There was a time when the United States (and the political West in general) hoped for or even believed in China’s integration into the rules-based international order, especially after the country’s WTO accession in 2001. In recent years, however, it has become crystal clear that this is not going to happen. Meanwhile, China, already the world’s largest economy in terms of GDP measured in purchasing power, was intent on becoming a leading economic and technological power, at least on equal footing with the U.S. or even replacing it as global hegemon.

As a means to this end, China is reshaping the post-WWII and post-Cold War international order to make it more compatible with Chinese needs and interests, especially its non-democratic state-capitalist system. This effort includes setting up parallel China-led international structures, such as the Shanghai Cooperation Organization (SCO) or the Asian Infrastructure Investment Bank (AIIB), as well as re-ordering existing international organisations from within, e.g., by channelling Chinese citizens into leading positions at the UN.

Consequently, the U.S. (in an increasingly rare bipartisan consensus) has defined China as its key challenge in the 21st century. The U.S. sees itself and its partners in a race with China for global supremacy and discourse power and is willing to go to great lengths in ”out-competing China” – a goal clearly stated in the 2022 National Security Strategy. China, meanwhile, is sticking to its narrative of “peaceful development” and suspects the U.S. of trying to contain it through protectionist measures and “cold war rhetoric”.

U.S.-China relations were caught in a dangerous downward spiral…

Thus, the relations between the two superpowers have become dangerously estranged and tense, especially in the past 15 months: After Nancy Pelosi’s visit to Taiwan in August 2022, China stopped military-to-military communication, which significantly raised the risk of accidental escalation due to misunderstandings and misinterpretations that cannot be easily solved without direct linkages. Bilateral climate talks, one of the maybe easier topics on which to find common grounds for cooperation, were also suspended.

The brief thaw in relations after the first meeting of President Xi and President Biden at the G20 summit in Bali in November 2022 quickly evaporated when, in January 2023, the U.S. shot down a Chinese surveillance balloon over its territory, which it reported to have been used for spying activities – which China denied. The incident froze U.S.-China diplomatic relations on the brink of escalation for a couple of months, showing both them and the rest of the world how tense the situation really had become. A real risk of intensifying geopolitical and economic bloc-building continues as we come to the end of 2023.

However, both the U.S. and China are aware that along with economic and political power comes at least a certain degree of international responsibility and that an actual escalation of their conflict would be devastating for their own and the global economy. Without open channels of communication at political top levels and regular military-to-military exchanges, this could unintentionally happen over the issue of Taiwan. The Rhodium Group, a U.S.-based research firm, has estimated that a major Taiwan crisis and resulting sanctions against China might lead to up to USD 3 trillion of global trade and financial flows being disrupted, roughly the size of the UK economy in 2022.

…which came to a halt with the Xi-Biden meeting at APEC – at least for now

Both the U.S. and China, therefore, re-booted diplomatic exchanges over the summer of 2023, trying to pave the way for their top leaders to meet again. This also was what their allies and partners expected of them or at least hoped for. The annual summit of the Asia-Pacific Economic Cooperation (APEC) forum, taking place in San Francisco from November 14-17, 2023, offered a chance to ease U.S.-China relations yet again.

Continuous efforts on both sides succeeded in making the meeting happen on the sidelines of APEC. On November 15th, Xi and Biden sat down for a 4-hour talk at Filoli estate in Woodside, California, near the summit in San Francisco. As low as expectations were prior to their meeting, some of the actual results were promising (PRC read out in English here, U.S. readout here).

Big power talk: better yield than expected…

From an international perspective, the key result is the resumption of military-to-military communication, including personal phone calls between theatre commanders – a relief for the world to hear. These are important steps to reduce the risk of escalation, and both Xi and Biden should be given extra credit considering the recent difficult relationship.

Biden and Xi also both committed to working together to fight the global climate crisis. This came as no surprise, as their special envoys on climate, John Kerry and Xie Zhenhua, sat down shortly before the APEC meeting to resume bilateral climate talks and prepared important steps toward reviving a bilateral climate working group. Their top leaders’ reaffirmation is an important signal in the run-up to the COP-28 climate conference in early December.

Biden and Xi agreed to establish a dialogue on artificial intelligence in general. China, however, did not pledge to join the “Political Declaration on Responsible Military Use of Artificial Intelligence and Autonomy”, which the U.S. initiated earlier this year “to build international consensus around responsible behavior and guide states’ development, deployment, and use of military AI”.

A fourth important result (which, if one believes Chinese state media reports prior to the meeting, also ranked very high on Xi’s list) is the commitment to promote people-to-people exchange again and more strongly, e.g. by increasing the number of passenger flights between the two countries and encouraging more exchange not only through business but also in the cultural and educational fields, among others. Personal contacts can indeed contribute to easing tense relations between two nations.

President Biden was also able to score domestically, as both sides agreed to resume “bilateral cooperation to combat global illicit drug manufacturing and trafficking, including synthetic drugs like fentanyl.” This could prevent even more American citizens dying from drugs containing illegally produced fentanyl, of which China is the biggest exporter. With election year in mind, this also was the first item in the White House readout of the meeting.

…but as expected, core divisions remain

The world should certainly be relieved that the U.S. and China have resumed talks at the highest political level. Non-escalation of U.S.-China relations is vital for the international order and for the two superpowers themselves. To achieve this, keeping channels for communication open is key.

The readouts of the Xi-Biden meetings, however, also made very clear that the U.S. and China’s views on crucial international issues, such as the violent conflict in the Middle East, the war against Ukraine, the Taiwan Strait, export controls or human rights more generally, diverge to a nearly unreconcilable degree.

So, as positive as the apparent stabilisation of U.S.-China relations is and as welcome as the above-mentioned results are, they should in no way obscure the fact that the fundamental conflict between the two superpowers will not go away. The renewed competition of systems is here to stay and will characterise the 21st century for the foreseeable future. The fact that Biden called Xi a “dictator” yet again shortly after their meeting (though, obviously addressing the American electorate more than the international community) might already be an indication that the relief about the two superpowers resetting their relations could indeed be short-lived.

About the author

Cora Jungbluth is a senior expert in the Europe’s Future Program at the Bertelsmann Stiftung. Her research focus is on China, foreign direct investment and international trade (especially the role of emerging economies).

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