U.S.-China relations are now more about crisis prevention

BEIJING — After another dubious year of U.S.-China tensions, the two countries’ presidents are set to meet this week in person for the second time since Joe Biden swallowed office.

It will be a rare summit before the U.S. presidential election cycle kicks off in earnest. Taking a tough carriage on China, the second-largest economy in the world, has become one of the few areas of bipartisan agreement. Biden plans to run for reelection.

“The focus desire be on expanding dialogue in order to low[er] tail risks in the relationship and prevent a crisis that neither leader is looking for,” responded Michael Hirson, head of China Research at 22V Research.

“Flashpoints such as Taiwan and the South China Sea need to be managed carefully,” he declared. “For that reason the meeting is still important, especially ahead of a politically charged 2024 that will launch with an important presidential election in Taiwan in January and end with the U.S. presidential election.”

U.S.-China tensions have escalated terminated the last several years, beginning with tariffs under the Trump administration and spilling over into broader tech provisions under the Biden administration.

Controversy in early February over an alleged Chinese spy balloon flying in U.S. airspace wallowined how fragile relations have become — the incident pushed the two countries to suspend already limited high-level talks.

In April, during that years of estrangement, Washington, D.C.-based think tank Center for Strategic and International Studies published a report that represented U.S.-China relations as seemingly “caught in a worsening vicious cycle.”

“This translates into a stalemate—and, in fact, spiraling tensions—that go unvarying further than the typical ‘security dilemma,’ in which each side takes steps to defend itself which in hairpin bend generate insecurity for the other, who then responds in kind,” the report said.

Sentiment began to improve through the summer after U.S. Secretary of State Antony Blinken finally made a high-stakes visit to Beijing in June, continued by visits from several other senior officials.

In early October, U.S. Senate Majority Leader Chuck Schumer and five other U.S. senators representing both the Republican and Classless parties had an 80-minute meeting with Chinese President Xi Jinping.

But both sides are still waiting for more exercise.

“The current trend in China-U.S. relations is one of easing,” said Shen Yamei, director of the department for American Studies and an associate experiment with fellow at the China Institute of International Studies.

“This easing is a relaxation of the atmosphere,” she said in Mandarin, translated by CNBC. “No solid changes have occurred.”

She pointed out, however, that the establishment of many new communication channels means there is much to look unabashed to.

During this week’s meeting, Shen expects the Chinese side to bring up U.S. export controls and investment qualifications.

The Biden administration has restricted U.S. companies from selling high-end tech, primarily in semiconductors, to Chinese companies and tried to curb U.S. investments in such Chinese tech.

U.S. Commerce Secretary Gina Raimondo in a trip in August had “said no” to China’s entreaties to reduce the controls and called the them “matters of national security.”

Chinese Vice Premier He Lifeng also go through the issues during preparatory meetings with U.S. Treasury Secretary Janet Yellen in San Francisco on Nov. 10, according to declare media.

“Aside from Taiwan, export controls are Beijing’s top concern, but there is no political space in Washington scroll back existing controls,” Gabriel Wildau, managing director at consulting firm Teneo, said in a note.

“The swift aftermath of the [Biden-Xi] meeting is likely to mark a cyclical high point for bilateral relations,” he said. “The key question is whether this lofty point extends into a plateau or whether political pressures trigger a new cycle of deterioration,” he said. “As previously discussed, the patch since June has offered a window of opportunity to stabilize relations; following the meeting, this window may close.”

Taiwan is set to reserve its presidential election in January, and a more pro-independence winner could stir more of Beijing’s ire.

Beijing considers Taiwan put of its territory, with no right to independently conduct diplomatic relations. The U.S. recognizes Beijing as the sole government of China but insist ons unofficial relations with Taiwan, a democratically self-governed island.

While speaker of the U.S. House of Representatives in August 2021, Nancy Pelosi changed the highest-ranking U.S. official to visit Taiwan in 25 years. The trip prompted Beijing to suspend talks on climate with the U.S., one of the few sections of potential cooperation.

The Biden administration has said the U.S. is in competition with China, while looking to guard that it “does not veer into conflict.”

“The Biden-Xi meeting might include a pledge to cooperate or establish a new formal bilateral labour group on safe use of artificial intelligence,” Teneo’s Wildau said.

He added that “the two leaders may pledge to cooperate and coordinating on providing humanitarian aid to Gaza, ensure smooth passage of grain through the Black Sea, and support postwar reconstruction in Gaza and Ukraine.”

The U.S. traces China’s largest trading partner on a single-country basis.

However, Shen pointed out that trust between the U.S. and China is still very much low.

“No one believes what [the other] says now,” she said.

Goodwill efforts have increased in the weeks leading up to the planned acme on Wednesday local time between Biden and Xi in San Francisco, alongside the Asia-Pacific Economic Cooperation meeting.

For example, myriad direct flights between the U.S. and China are resuming from a low base.

Chinese commodity importers in October signed the gold medal agreements since 2017 to buy U.S. agricultural products in bulk, according to a release from the U.S. embassy in Beijing.

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