No discord, no concord: Xi-Biden meeting is a sign China-US relations may enter a period of de-risking

The leaders have agreed in principle to hold a virtual meeting before the end of the year – the first formal talks since Biden took office
It comes amid recent developments that provide grounds for cautious optimism, as both countries have started to move away from their confrontational approach

Wang Xiangwei

Published: 9:30am, 9 Oct, 2021

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At long last, Chinese President Xi Jinping and US President Joe Biden have agreed in principle to hold a virtual meeting before the end of the year. This will be the first formal meeting between the leaders of the world’s two largest economies, one that comes nearly a year after Biden took office – a nod to how the Covid-19 pandemic has changed not only people’s lives but also diplomacy.

That it also comes after months of tension marked by acrimony and accusations between the two countries has given a new interpretation to an old saying in China: “No discord, no concord.” Beijing and Washington have improved mutual understanding through rivalry and confrontation, even though both leaders had supposedly already established a rapport through spending a substantial amount of time together when they were vice presidents.

The fact that it took them so long to have a formal meeting also reflects the changing dynamics of the tortuous path China-United States relations have embarked upon.

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At the beginning of the year, there was brief, misplaced optimism that a Biden presidency was more likely to put a floor under the free-fall in bilateral ties after the Trump administration’s chaotic four years in power. But since then, relations have worsened, and the confrontational nature of the relationship has continued to dominate global headlines.

But Washington’s tough rhetoric and its much-touted efforts to rally its Western allies to gang up on Beijing have failed to alter China’s behaviour and stance at home and abroad, contrary to the original American thinking that strength in numbers would make the Chinese leadership backtrack. In fact, Beijing has doubled down on its diplomatic approach, which apparently prodded Washington to rethink some elements of its evolving strategy on China. The Biden administration has reportedly undertaken a months-long review of its policies towards China.

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US, Chinese diplomats’ meeting in Zurich paves way for continued talks

The unusual and undiplomatic fiery exchanges between top American and Chinese diplomats in Alaska in March were the most vivid example of this situation. Back then, Beijing’s top diplomat Yang Jiechi publicly rebuked the US for its criticism of China’s human rights and its threat to the rule-based international order, and said Washington could no longer “speak to China from a position of strength”. In the same month, Xi reportedly said on a separate occasion that the Chinese people could finally see the world at eye level, unlike the years in which people like him were seen as “country yokels”. The Alaska meeting was quickly followed by tit-for-tat sanctions, first from the US-led coalition of partners over Xinjiang and then a response in kind from Beijing.

Meanwhile, the Biden administration has continued to increase official contact with Taipei and ramp up military activities in the Taiwan Strait, a tactic started by the Trump administration. Beijing saw those moves as violating the one-China principle agreed between the two countries, and responded by sending frequent and increasingly larger sorties of warplanes into Taiwan’s air defence zone. All this has greatly heightened international concerns over a potential military conflict in the strait.

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It is within this context that last month, Xi and Biden had a lengthy phone call to discuss a wide range of strategic issues and set a framework for bilateral ties to move forward. In particular, the statements from both sides emphasised that Beijing and Washington had no reason to allow competition to veer into conflict, and the US had no intention of changing the one-China policy. The phone conversation was their first in seven months and only the second since Biden came to power.

Soon after the meeting, the US allowed Meng Wanzhou, chief financial officer of the Chinese technology giant Huawei, to return home after being detained in Canada for nearly three years. In exchange, two Canadians arrested on espionage charges in China – seen as retaliation for Meng’s detention – were allowed to go back to their country. The exchange has ended a long, damaging row involving China, the US, and Canada. Meng’s release was part of the two lists of concerns Beijing delivered to Washington in July when two senior Chinese and American diplomats met in Tianjin. The Chinese side was also encouraged by reports that the US had eased visa restrictions on Chinese students, another demand on the two lists.

US Trade Representative Katherine Tai has laid out the starting points for the Biden administration’s new trade strategy. Photo: AFP

These positive developments have paved the way for both countries to tackle weightier but thornier issues. Signalling the White House has finally wrapped up the months-long review of its China policies, US Trade Representative Katherine Tai on Monday delivered a speech that laid out the starting points for the Biden administration’s new China-trade strategy. By the look of it, Tai’s strategy does not differ much from the Trump administration’s. She said the US would keep the existing tariffs in place and press China to fulfil the promises it made as part of the Phase One trade deal signed in January last year. This involved Beijing pledging to buy US goods and services worth at least US$200 billion more over 2020 and 2021 compared with 2017, but it has fallen far short of the target.

Tai also said the US would restart a process for American companies to apply for exemptions from tariffs, which many economists have long argued were tantamount to a tax on American consumers and hurt American businesses more than Chinese exporters. However, her speech was light on details, disappointing some analysts and industry groups – though this is to be expected.

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As Tai said she planned to have “frank” discussions with Vice Premier Liu He in the coming days, she apparently intends to use the tariffs as leverage to extract concessions from her Chinese counterpart.

Meanwhile, the six-hour meeting in Zurich on Wednesday between China’s top diplomat Yang and US national security adviser Jake Sullivan, which led to the in-principle agreement of the summit between Xi and Biden, covered other strategic issues. Both sides described the meeting as more constructive and detailed than the Alaska meeting in March, as they agreed to maintain high-level dialogue and communication.

Perhaps as a sign of the gulf between the countries, both Yang and Sullivan even disagreed on the term with which to characterise bilateral ties. While Sullivan said the US would continue to engage with China at a senior level to “ensure responsible competition”, Yang said China opposed defining relations as “competitive”.

Still, these developments provide grounds for cautious optimism, as both countries have started to move away from their confrontational approach and are entering a period during which they will find ways to mitigate risks and dangers in their complex and fraught bilateral relationship.