In an unexpected turn of events, the recent Asia-Pacific Economic Cooperation (APEC) summit hosted in San Francisco saw a significant shift in the rhetoric between the world's two major powers, the United States and China. President Joe Biden and Chinese leader Xi Jinping, despite their disagreements, engaged in a four-hour-long conversation, marking their second in-person meeting as leaders.
The summit, a crucial platform for reshaping Sino-American relations, provided an opportunity for the leaders to navigate through contentious issues. Contrary to the months-long accusations from China about the U.S. containing its economy, the Communist Party's narrative took a turn. The propaganda highlighted the shared history of both nations fighting together against Japan in World War II, emphasizing the collaboration of American volunteer fighter pilots known as the "Flying Tigers."
The leaders, who have known each other for over a decade, addressed several key issues. President Biden stressed the need to ensure healthy competition between the nations does not escalate into conflict. In contrast, President Xi cautioned against framing their relationship as a contest, asserting that major-country competition is not the prevailing trend of current times, and the Earth is vast enough for both countries to succeed.
The summit yielded some constructive outcomes, including the restoration of direct contacts between the armed forces of both nations. Efforts to curb the supply of precursor chemicals for producing fentanyl, a synthetic opioid responsible for tens of thousands of American deaths annually, were also announced. Additionally, the leaders agreed to engage in future discussions addressing the risks associated with advanced artificial intelligence (AI) systems.
The significance of this meeting lies not only in the agreements reached but also in the rekindling of communication between the two nations. As Taiwan remains a sensitive issue, President Xi emphasized its potential danger in U.S.-China relations. President Biden, however, maintained the long-standing U.S. policy of a "one-China" principle, refraining from explicit reassurances about defending Taiwan if attacked.
From an economic perspective, President Biden faces challenges in presenting an attractive counter-offer to China's economic enticements. The Indo-Pacific Economic Framework (IPEF), intended as a key trade weapon, faced setbacks as discussions on digital trade were halted by the Biden administration. This decision has implications for digital commerce, online services, cross-border data flows, and e-commerce, creating disappointment for liberal economies in the region.
As the two nations navigate their economic relationship, China appears to be making progress in Asia, capitalizing on America's withdrawal from multilateral deals. While the U.S. focuses on limited bilateral agreements to support its industrial policy, China's participation in the Regional Comprehensive Economic Partnership (RCEP), a 14-member trade deal, strengthens its influence in the region.
In conclusion, the Biden-Xi summit, though marked by disagreements, has provided a platform for dialogue and a potential shift in dynamics. The outcomes, including renewed military contacts and discussions on AI, suggest a commitment to managing the complex relationship between the U.S. and China. However, challenges persist in the economic realm, where China seems to be gaining ground as the U.S. grapples with domestic pressures and shifts in trade priorities. The true test of this evolving relationship will unfold in the face of future crises and geopolitical developments.
