Next year, which starts with a presidential election in Taiwan and ends with another one
in the US, is shaping up to be a crucial year for the world’s most important relationship

• By Shawn Donnan / Bloomberg

It took place at a venue famous for glitzy weddings, but Wednesday’s summit between US President Joe Biden and Chinese President Xi Jinping (習近平) had more in common with a counseling session for a couple contemplating divorce. The premise: Let us try to keep things civil for the kids.

All week, fear of a new Cold War has loomed over San Francisco, where Asia-Pacific leaders are gathered. After four hours of talks on Wednesday last week, the US and Chinese presidents offered a glimpse of just how hard it is going to be to manage their relationship away from that course.

The meeting at the Filoli Estate, 40km south of San Francisco, was months in the planning. However, when the stakes are high, and the differences fundamental, even the most arduous diplomatic groundwork can sometimes only yield small victories.

Illustration: Yusha

The US and China have agreed to collaborate on climate and artificial intelligence (AI), and resume military-to-military contacts. More US students would be welcomed in China, Chinese pandas might return to US zoos, and Xi vowed to crack down on fentanyl shipments. Bigger and more divisive issues like trade, tariffs left over from the Trump years and competition over technology were set aside for now.

Also largely unanswered after Wednesday’s talks was the question of what comes next.

There are plans for working groups that would see middle-ranking officials meet occasionally, but no future high-level interactions were announced aside from a planned China trip by US Secretary of the Treasury Janet Yellen, although the two leaders pledged to speak directly if tensions flared. Next year, which starts with a presidential election in Taiwan and ends with another one in the US, is shaping up to be a crucial year for the world’s most important relationship.

“The meeting came out as well as it could have,” Michael Froman, head of the Council on Foreign Relations and former US trade representative, said at the end of a long day on Wednesday. “The question is whether the positive momentum will endure and lead to more and more significant concrete results. There’s still major issues to be addressed, and this was more about improving the mood.”

In other words, the leaders of the world’s two largest economies found common ground where they could, but they did not even manage to agree publicly about the nature of their relationship.

At a dinner with US business leaders, Xi offered an effusive history of Sino-American ties, with a heavy emphasis on friendship and personal connections. He rejected outright the idea, regularly floated by US officials, of an existential competition between the countries.

“If one sees the other side as a primary competitor, the most consequential geopolitical challenge and posing a threat, it will only lead to misinformed policymaking,” Xi said. “China is ready to be a partner and friend of the United States.”

By contrast, Biden portrayed a relationship built on competition and frank exchange of views.

Asked whether he trusted Xi, Biden offered a qualification for an answer. “I trust but verify, as that old saying goes,” he told a press conference after the summit.

“We’re in a competitive relationship, China and the United States,” Biden added. “My responsibility is to make this rational and manageable, so it doesn’t result in conflict.”

Biden was even less diplomatic as he walked out of the press conference, again calling Xi a “dictator.”

“Well, look, he is,” the US president said in response to a question. “I mean, he’s a dictator in the sense that he is a guy who runs a country that is a communist country that’s based on a form of government totally different than ours.”

To some US observers, Xi’s speech at the business dinner felt like an attempt to rewind the relationship to a happier time — even though US officials insist they are not seeking to turn back the clock that way.

It also seemed to gloss over the grievances of foreign investors. Surveys show they feel increasingly unwelcome in a China that has prioritized building national industrial champions.

Addressing a roomful of CEOs, Xi had been expected to make the case for investing in China — and signal that US businesses are welcome there — but he was “virtually silent” on the topic, one person at the event said afterward.

The next day, China released a separate, written speech in which Xi vowed to make it easier for foreigners to do business.

Both Biden and Xi highlighted a Chinese pledge to help stop shipments of illicit fentanyl to the US, though that is a commitment China has made before.

There were also agreements to increase commercial flights and tourism. Xi announced a plan to welcome 50,000 US students over the next five years, and indicated that China would again send pandas to US zoos, just weeks after bringing them home amid diplomatic tensions. The two sides have agreed to work together more on climate change issues, and on Wednesday they announced a working group to discuss the rapid development of AI.

“This is overall a good outcome,” said Bert Hofman, director of the East Asian Institute at the National University of Singapore and a former World Bank country director for China. “Fentanyl, AI and military-to-military dialogue are all in their mutual interest.”

Still, what comes next gets tricky. The presidential elections in Taiwan and the US, and all the bombast that’s likely to accompany them, would make it hard for leaders to meet, Hofman said. “Tensions could re-emerge.”

Taiwan goes to the polls in January. The nation’s opposition parties have agreed to run a joint campaign in the election, raising the chances that a more China-friendly government could take power in Taipei. Biden told reporters he made clear to Xi that the US would oppose any Chinese interference in the vote.

Xi’s response was unclear. In a statement after the summit, the Chinese Ministry of Foreign Affairs said the US should “support China’s peaceful reunification. China will realize reunification, and this is unstoppable.”

That kind of language is a reminder that the US and China have some fundamental disagreements — the kind that could trigger a Cold War.

However, other leaders at the Asia-Pacific Economic Cooperation group summit were urging a different outcome.

Speaking to another business gathering as Biden and Xi were meeting, California Governor Gavin Newsom said the US should approach China with an “open hand, not a closed fist.”

Newsom recalled his own childhood during the Cold War saying: “I was jumping under the damn desk at school, because we were having some nuclear war with Russia.”

Then he invoked his children: “I don’t want them to grow up like that.”

Malaysian Prime Minister Anwar Ibrahim offered a similar plea for the US and China to get along — so that the rest of the world does not have to pick sides.

“Countries like Malaysia cannot be forced to see the world and the big powers in a Cold War mindset,” he said. “This Cold War mindset must end.”