US President Joe Biden and Chinese counterpart Xi Jinping’s carefully choreographed, much-anticipated sitdown on the sidelines of the Asia-Pacific Economic Cooperation summit kicks off Wednesday at the Filoli estate south of San Francisco.
The gathering, among 16 acres of lush autumnal gardens, belies a heady agenda, as they attempt to repair a relationship badly strained by economic competition and military and diplomatic missteps.
The leaders are expected to discuss a US request for resuming military-to-military communication in hopes of avoiding confrontations in Pacific skies and seas, as well as a comprehensive Chinese law enforcement effort to crack down on fentanyl manufacturing and distribution networks.
The leaders also plan to confer about artificial intelligence, the status of Taiwan, and conflicts involving Ukraine and Israel. Chinese officials are likely to seek the rollback of export controls, tariffs, and restrictions on investment in the US.
The meeting is expected to follow roughly the same format as their previous gathering in Bali, Indonesia, in November 2022. After a handshake greeting, Biden and Xi will sit for a meeting with close advisers. Following a break, a larger group will gather for additional talks, with the total meeting time expected to stretch for hours.
Once they conclude, Biden is expected to hold a press conference, while Xi returns to San Francisco for a dinner with top US executives.
US and Chinese officials spent weeks discussing the agenda and the structure of the event, White House spokesman John Kirby said Tuesday.
“The table has been set again over the course of many weeks for what we hope will be a very productive, candid, constructive conversation here,” Kirby said.
Choreographed Summit
One US official, briefing reporters ahead of the meeting on condition of anonymity, said that because of the power Xi had consolidated within China, the meeting offered a rare opportunity to make changes in the relationship — and that the stakes couldn’t be higher.
Aides acknowledged every detail of the visit would be scrutinized.
Treasury Secretary Janet Yellen, who visited Xi in China earlier this year, greeted him at the airport upon his arrival, a nod to their preexisting relationship and her reputation in Beijing as a serious power broker.
And the selection of Filoli, nestled against the Santa Cruz mountains, evokes the informal meetings held between Xi and former President Barack Obama at Sunnylands outside Palm Springs, where the pair literally and metaphorically rolled up their shirtsleeves for days of talks.
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The biggest goal for both leaders is repairing a relationship that has been repeatedly strained.
Citadel founder Ken Griffin said a key objective should be taking “the mutual temperature down.”
“There is no room for an accident to take place,” Griffin said Tuesday in an interview with Bloomberg News at his firm’s inaugural global macro conference in Miami. “Our economies are incredibly coupled together, and an abrupt decoupling would come at just catastrophic costs to the people.”
China’s Economy
Ahead of the meeting, Biden said his goals included helping China’s struggling economy, provided that growth didn’t come at the expense of US intellectual property.
“If the average citizen in China was able to have a decent-paying job, that benefits them and benefits all of us,” he said. “But I’m not going to continue to sustain the support for positions where if we want to invest in China, we have to turn over all our trade secrets.”
The US did not plan to announce changes to its tariff regime or sanctions against Chinese entities despite expecting Xi to push the issue, the US official said.
Economic insecurity may partly explain Xi’s willingness to engage despite high-profile clashes over an errant Chinese spy balloon and then-House Speaker Nancy Pelosi’s visit to Taiwan. A crisis in China’s property sector has weighed down the country’s post-pandemic recovery with its economy no longer on course to surpass the US.
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Foreign holdings of the nation’s equities and debt have fallen by about 1.37 trillion yuan ($188 billion), or 17%, from a December 2021 peak through the end of June this year, according to Bloomberg calculations based on central bank data.
Still, bilateral trade between the US and China amounted to almost $760 billion in 2022, while the value of investments in physical and financial assets stood at $1.8 trillion.
Domestic Audience
US-China experts say there are no simple answers to the challenges the nations face, but the hope is Biden and Xi can rebuild a level of mutual understanding.
“The big thing missing is trust,” said Dennis Wilder, a senior fellow for the Initiative for US-China Dialogue on Global Issues at Georgetown University. “I have not seen the US-China trust deficit as big as it is today.”
A show of cooperation could help Xi signal at home that the cycle of actions hurting Chinese businesses is ending, according to Mary Lovely, senior fellow at the Peterson Institute for International Economics, bolstering an economy suffering weak consumer and investor confidence.
Still, both leaders must tread carefully for their domestic audiences, in particular Biden, who faces a tough reelection.
A Bloomberg News/Morning Consult poll this month found 46% of swing-state voters said they trust former President Donald Trump, the GOP frontrunner, on China compared to 34% for Biden.
--With assistance from Gregory Korte, Shawn Donnan and Hadriana Lowenkron.
