James Palmer, Cindy Yu, and Evan Medeiros discuss the recent meeting between Biden and Xi, the outcomes of the meeting, challenges in controlling fentanyl exports, Europe's reception of the meeting, the state of doing business in China, and domestic pressures on the US-China relationship.
The recent summit between Biden and Xi resulted in agreements on military communications, AI cooperation, and addressing the fentanyl crisis, achieving the goal of stabilizing the relationship and making practical progress, but potential flashpoints and domestic pressures may strain the relationship again.
While the US and China attempt to compartmentalize their relationship by cooperating and competing on different issues, in practice, China tends to group all issues together and uses positive engagement to gain concessions, making sustained compartmentalization challenging.
Deep dives
Summary of the podcast episode
The recent summit between Chinese President Xi Jinping and US President Joe Biden resulted in agreements to resume military communications, cooperate on artificial intelligence, and address the fentanyl crisis. Overall, the Biden administration achieved its goal of stabilizing the deteriorating relationship and making practical progress on key issues. However, potential flashpoints such as the Taiwan election and ongoing tensions in the South China Sea could once again strain the relationship. Both the US and China face domestic pressures, with Congress taking an active role in shaping China policy and China grappling with economic challenges. The US business community remains hopeful for better economic ties, but is cautious given the uncertainties. Moving forward, the US-China relationship will be defined by cyclical warming, with structural competition and challenges persisting in the long term.
Compartmentalizing cooperation and competition
The US and China have attempted to compartmentalize their relationship by cooperating on certain issues like climate change while competing in others. In practice, however, China tends to group all issues together and use a carrot and stick approach to achieve its objectives. The recent summit showcased China's leveraging of positive engagement around climate change and other areas to gain concessions from the US. How long this approach will last depends on future flashpoints and challenges, such as the US lifting chip restrictions on China or US engagement with Taiwan politics. The structural deterioration and pressures in the US-China relationship remain, making sustained compartmentalization challenging.
Implications for domestic politics
There are domestic political implications on both sides of the US-China relationship. In the US, Congress plays a significant role in shaping China policy and could exert pressure on the Biden administration regarding the relationship with China. The US business community, while eager for improved economic ties, remains cautious due to recent challenges faced by foreign businesses in China. On the Chinese side, domestic pressures are more constrained due to the political structure. The Chinese government controls the media narrative and can manipulate public sentiment to maintain stability. However, economic concerns and growing tensions within the security services present internal challenges. Understanding and managing the domestic political landscape is crucial for both countries' approach to the US-China relationship.
Challenges and potential areas for future developments
There are several challenges and potential areas for future developments in the US-China relationship. The ongoing chip restrictions on China are unlikely to be lifted, as the US is committed to maintaining restrictions and pushing for domestic chip production. China, in response, is focusing on developing its own domestic chip industry. The trajectory of the relationship will also be influenced by future events, such as the Taiwan election and potential incidents in the South China Sea. Structural competition and economic headwinds in China contribute to a cyclical warming of the relationship, but the long-term challenges and pressures remain. The ability to maintain dialogues, cooperation, and find common ground amidst these challenges will shape the future of the US-China relationship.
Chinese President Xi Jinping visited the United States for the first time in six years this week, announcing with U.S. President Joe Biden a range of new collaborations between the world’s two biggest economies. Host Ravi Agrawal convenes a panel to analyze takeaways from this week’s Asia-Pacific Economic Cooperation summit in San Francisco and is joined by FP’s James Palmer, the Spectator’s Cindy Yu, and former Obama administration advisor Evan Medeiros.
