The story so far: U.S. President Joe Biden and his Chinese counterpart Xi Jinping held a virtual summit earlier this week touching upon a range of policy concerns in the bilateral space. The meeting was long overdue given the lack of in-person contact between the two leaders, as Mr. Xi has not travelled outside China since early 2020, the time when Mr. Biden entered the Oval Office, owing to the outbreak of the COVID-19 pandemic. Meanwhile, tensions have soared between Washington and Beijing across issues of global and regional interest, including trade, Taiwan and the South China Sea, and technology, including 5G. At a meeting of senior officials from the two countries in March 2021 in Anchorage, Alaska , a heated exchange followed U.S. Secretary of State Antony Blinken’s comment that without the rules-based international order there would be a “much more violent world” and that Chinese activities in Xinjiang, Hong Kong, and Taiwan threaten that order and were, therefore, not internal matters. As a key meeting following that encounter, the latest summit exchange saw the two Presidents articulate their views on each of these subjects; yet there was no breakthrough announcement. This suggests that the task ahead for both nations would be to manage conflicts so that they do not spill over and affect the global economy.
Editorial | Agreeing to disagree: On U.S.-China ties
What are the core areas of tension now?
Trade and tariffs are at the top of the agenda of policy matters causing bilateral friction. After the globally damaging trade war with China through 2019 and 2020, a dispute that was exacerbated by former President Donald Trump’s tariffs on a vast swathe of Chinese exports — including solar panels, washing machines, steel and aluminium, and numerous food products — a temporary reprieve came with the Phase One Trade Agreement. Under it, China was mandated to buy $380 billion worth of American goods by the end of 2021, yet has failed to do so, according to analysts, owing to a shortfall in orders from Beijing for Boeing aircraft following the slowdown in commercial aviation during the pandemic. However, unlike the escalating tensions between Beijing and the Trump administration, this time a compromise may yet be hammered out, as U.S. Trade Representative Katherine Tai recently hinted that the exemptions for certain goods from trade tariffs may be permitted.
A second key area of tension is the question of Taiwan’s independence, a topic that was likely writ large in the discussions between Mr. Biden and Mr. Xi this week. The U.S. post-summit readouts suggests that Washington is holding firm to its long-standing policy on this complex subject, that it acknowledges but does not recognise Beijing’s claim to Taiwan under the One China policy. In contrast, the Chinese delegation has indicated that Mr. Xi said, “It is playing with fire, and if you play with fire, you will get burned” — a comment that signals that China will likely respond aggressively to any moves by Western powers seen as strengthening Taiwanese independence, including direct arms sales to Taipei and visits by Western lawmakers to the island territory.
A third major bilateral subject that has proved to be contentious is technology. On the one hand, since the administration of Mr. Trump, the White House used the trade war with China to bluntly accuse Beijing of “unfair trade practices for technology and intellectual property”, and U.S. policymakers relied on a matrix of export restrictions to target China’s semiconductor supply chain in a bid to safeguard critical infrastructure in the telecommunications sector. On the other, the arrest and subsequent release of Meng Wanzhou , CFO of Chinese telecommunications equipment and consumer electronics giant Huawei, after China counter-arrested two Canadian nationals, demonstrated the extent of suspicion that Western nations have of 5G technology rolled out by China. Such suspicion, overlaid with the string of indictments served to Chinese nationals in the U.S. on allegations of industrial espionage, hint at the deep chasm between the U.S. and Chinese governments on the broad question of technology and surveillance.
What led the two Presidents to engage in a dialogue?
Although the 2021 U.S.-China virtual summit meeting yielded no breakthrough announcement, Beijing wasted little time in claiming a diplomatic victory, with Chinese state media proclaiming, “Biden reiterates he doesn’t support Taiwan independence.” For Mr. Biden, whose job approval rating has slumped to 36%, according to the Quinnipiac University national poll, a win with China would have gone some way towards uplifting his prospects. But no quick victory has come out of the latest dialogue.
