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Global Impact: has economic slowdown prompted Beijing rethink as Xi-Biden Apec meeting nears reality?

Photo of arifnsn arifnsn Send an email November 6, 2023
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Ironic, considering that the trade war that Trump started with China has gone on for more than half a decade and one of the most pressing bilateral issues for the Biden administration is a lack of high-level, military-to-military dialogue.

02:17

China’s Wang Yi calls for ‘in-depth’ Sino-US dialogue ahead of Antony Blinken talks in Washington

China’s Wang Yi calls for ‘in-depth’ Sino-US dialogue ahead of Antony Blinken talks in Washington

Recent visits by several of Biden’s key cabinet officials to Beijing assured many pundits that these engagements were laying the groundwork for the US leader to get Washington’s message to Xi directly.
First, US Secretary of State Antony Blinken travelled to Beijing in June, getting an audience with Xi, who told the top US envoy that better bilateral relations will have “a bearing on the future and the destiny of humankind”.
Underscoring the depth of animosity that many in the US feel for China, former top US envoy for East Asia Susan Thornton recently defended these visits as being not merely “a talk shop”.

While Blinken, Yellen and Raimondo came away with little more than agreements that talking is good, other visits to China by US political figures outside of the Biden administration offered further evidence that Beijing is ready for engagement.

03:44

Yellen hails ‘step forward’ in US-China ties despite national security concerns

Yellen hails ‘step forward’ in US-China ties despite national security concerns

California Governor Gavin Newsom, a figure whose political priorities differ vastly from those of the Chinese government’s, also pulled off a meeting with Xi. A bleak outlook in terms of global progress on the climate front gave the two some common ground.
The Chinese leader told Newsom that collaboration with the United States on green development and climate change has “huge potential”, echoing the governor’s positive tone following a raft of high-level meetings in Beijing.

“It is completely possible for us to strengthen cooperation [in aspects like green development and climate change], and make it a new highlight for the development of China-US relations,” Xi told the governor.

Kerry said Beijing and Washington agreed to work together to guarantee a positive outcome for the 28th session of the Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change, to be held in Dubai later this year, and the two sides agreed to “work intensively in the weeks ahead”.

01:42

China’s Xi Jinping and California’s Gavin Newsom strike upbeat tone in Beijing meeting

China’s Xi Jinping and California’s Gavin Newsom strike upbeat tone in Beijing meeting

Regular dialogue between the world’s two most powerful armed forces have also been cancelled, making it harder for them to prevent accidental conflicts. Beijing also said it would stop cooperating in tackling the drugs trade, fighting crime and repatriating illegal immigrants.

Schumer and his colleagues apparently understood the risks, saying they were heading to China for “direct, candid and respectful” conversations with the Chinese leadership, on topics ranging from human rights to reciprocity for US businesses in China.

02:27

Chinese President Xi Jinping meets top US senator, says China-US ties impact ‘destiny of mankind’

Chinese President Xi Jinping meets top US senator, says China-US ties impact ‘destiny of mankind’

Schumer lived up to the direct and candid part. During his meeting with Xi, he criticised China for not condemning the terrorist attacks against Israel by Hamas, which occurred during the visit, and urged Xi to “stand with Israeli people to condemn these cowardly and vicious attacks”.
Newsom pulled off his meeting with Xi even after the Pentagon issued its strongest warning yet that China poses an existential threat to the US and all of the world’s democratic countries.
What might have changed Beijing’s position? Some have suggested the country’s economic slowdown.
Indebted Chinese property developers such as Evergrande and Country Garden owe millions to small companies and their workers, a crisis that has many analysts wondering how much of the rest of the economy will be affected as millions of homebuyers who pre-bought property have little recourse but to wait for a turnaround.

China’s economy turns corner: 7 takeaways from GDP, September activity data

However, China’s economic recovery regained some momentum in the third quarter, rising by 1.3 per cent from the previous three months, amid ongoing calls for increased policy support to sustain a consistent growth trajectory.
With such a mixed bag of economic indicators – China’s retail sales grew by 5.5 per cent in September, but real estate investment fell by 9.1 per cent in the first three quarters – it is difficult to know how much economics affects foreign policy.

While bilateral engagement has resumed on various fronts and levels, one area – military-to-military – remains largely stuck, an issue that many Pentagon officials have been stomping their feet about.

04:00

PLA will show ‘no mercy’ against Taiwan independence moves, top Chinese general says

PLA will show ‘no mercy’ against Taiwan independence moves, top Chinese general says

Ratner and some others in the US Pentagon held out hope that the two sides would agree to resume high-level negotiations on the military front at two key meetings: the Xiangshan Forum in Beijing and the next Asean Defence Ministers’ Meeting-Plus in Jakarta this month.

But the Pentagon missed a “good opportunity” to send US Defence Secretary Lloyd Austin to the Xiangshan Forum, where he could have met top brass of the People’s Liberation Army (PLA) and resumed long-stalled dialogues between senior military officials, according to General He Lei.

Assuming the Xi-Biden summit will happen this month, prospects for success – however that is defined – may depend on how the talks are structured.

Xi and his delegation arrived at that meeting after a personnel reshuffle at the 20th Communist Party congress, where Xi secured a third term in power and saw his closest allies promoted.

Those looking for hints about whether Xi’s economic problems have in any way changed his foreign policy formulation can have a look at the G20 meeting line-up.

60-Second Catch-up

Deep dives

Photo: Shutterstock Stock

When Xi and Biden talk at Apec, managing Taiwan will top the agenda

  • Washington and Beijing share an interest in easing tensions and maintaining peace and stability across the Taiwan Strait

  • Yet the Chinese president’s recent statements ‘don’t imply he’s content with the status quo’, an analyst says

When China President Xi Jinping and US President Biden sit down in San Francisco in two weeks, among the most contentious issues on the agenda is likely to be the increasingly perilous situation in Taiwan, analysts and former US officials said on Thursday.

After a lengthy prologue involving detailed protocol discussions, negotiations over possible deliverables, high-level official “confidence building” meetings and “will Xi, won’t Xi attend” speculation, the two leaders are set to meet on the sidelines of the Asia-Pacific Economic Cooperation forum this month.
Illustration: Lau Ka-kuen

Don’t expect any breakthroughs when Xi and Biden meet, analysts say

  • The White House has confirmed that a leaders’ summit will go ahead in San Francisco this month

  • ‘No major thaw’ is anticipated but it could send a signal that they’re managing their differences

Preparations are in full swing for a summit between Xi Jinping and Joe Biden this month, but analysts say they do not expect any breakthroughs given the long-standing issues looming over the talks.
They say the much-anticipated meeting could, however, bode well for US-China ties and send a positive signal to regional countries that the world’s two biggest economies are managing their differences and trying to ease tensions.
Photo: Jack Lau

Lloyd Austin’s absence at Xiangshan Forum a missed opportunity: Chinese general

  • US defence secretary could have met top PLA brass – and maybe even President Xi Jinping – at security conference, says Lieutenant General He Lei

  • Washington frequently complains about Beijing’s refusal to engage in long-stalled dialogues between senior military officials

The Pentagon missed a “good opportunity” to send US Defence Secretary Lloyd Austin to the Beijing Xiangshan Forum, where he could have met top brass of the People’s Liberation Army (PLA) and resumed long-stalled dialogues between senior military officials, a Chinese lieutenant general has said.
“Does he really want to meet senior Chinese officials? If he genuinely wanted to make contact, then he should have come,” He Lei, former vice-president of the PLA Academy of Military Sciences, told the Post on the sidelines of the security conference on Tuesday.
Photo: AFP

Xi-Biden summit would show talking is ‘not weakness’: former US envoy

  • Both sides ‘working pretty hard’ to make a meeting happen at November’s Apec forum, the former diplomat said during her trip to China

  • Thornton said she perceived a steadying upwards trend in the relationship during her visit

A potential meeting between President Joe Biden and his Chinese counterpart Xi Jinping next month is poised to install “the most solid guardrail” for the bilateral relationship, according to former top US envoy for East Asia Susan Thornton.
The fact of a face-to-face exchange could show the world that Washington and Beijing can manage their relations and that talking with each other is “not a concession”, she said in an exclusive interview with the South China Morning Post last week.
Photo: AP

‘Differing US and Chinese objectives will limit Xi-Biden meeting outcomes’

•Ambassadors to US from Australia, Singapore and France agree it is in the interests of their countries to preserve Taiwan status quo•Singapore arrived at its positions ‘not because we want to please one side or the other, but because of our own particular circumstances’, says envoy

China and the US both seek to stabilise their relationship but each brings a different lens to an expected meeting between presidents Joe Biden and Xi Jinping in November, according to Australia’s envoy to the US.
Ambassador Kevin Rudd told a panel hosted by the Council on Foreign Relations in Washington on Monday the difference in expectations would lead to “at best, modest outcomes”.
Photo: AP

Why Xiangshan Forum could be ‘useful opportunity’ for US-China military ties

  • Senior defence officials, including from the Pentagon, will attend the three-day security conference in the Chinese capital

  • Beijing and Washington are set to restart military talks, but their geopolitical rivalry will likely be a focus at the gathering

Beijing is expected to restart military communication with Washington when it hosts a security forum from Sunday, but analysts say issues like Taiwan and the South China Sea will make it challenging.
The three-day Xiangshan Forum – seen as Beijing’s answer to the Shangri-La Dialogue in Singapore – has not been held in person for four years because of the Covid-19 pandemic.
Photo: Reuters

US-China financial, economic ties turn positive after ‘dangerous’ period: Yellen

  • Financial group meeting on Wednesday followed first Economic Working Group meeting on Tuesday as part of efforts to foster regular communications

  • US Secretary of the Treasury Janet Yellen said the US and China ‘have had a set of very constructive and deepening discussions about areas of mutual concern’

Senior finance officials from China and the United States had “professional, pragmatic, candid and constructive” discussions over financial stability, supervision and regulation at the first meeting of a new financial group this week.

The virtual meeting on Wednesday followed the first Economic Working Group meeting on Tuesday, and covered monetary and financial stability, financial supervision, sustainable finance, anti-money-laundering and countering the financing of terrorism, as well as global financial governance between the two countries, the People’s Bank of China said on Friday.
Photo: Xinhua

Leading Chinese academic and cultural figures urge Sino-US ‘friendship’

  • Soft power push by Beijing sends delegation including former NBA star Yao Ming to New York ahead of likely meeting between Xi Jinping and Joe Biden

  • Amid optimism, speakers concede bilateral relations have been frosty with little likelihood of quick turnaround

A delegation of Chinese academic, economic, cultural and sports figures called for “China-US people power and friendship” on Wednesday in a bid to reboot the nation’s wobbly soft power ahead of an increasingly likely meeting between President Xi Jinping and President Joe Biden.
The effort to seed the ground for improved ties dovetails with a rare Xi statement at a gala dinner in New York the evening before in which the third-term president called for mutual progress and common prosperity with the United States.
Photo: Reuters

US dollar trust not an ‘easy thing to overcome’ despite jump in de-dollarisation

  • International Finance Forum say a trend of using regional currencies rather than US dollar is a result of unprecedented US monetary tightening

  • But dependence on the US dollar is not going to be a very easy thing to overcome, said former central bank of Malaysia governor Nor Shamsiah

Interest in de-dollarisation is increasing given growing financial fragmentation risks worldwide, according to a report, but there is still not a credible alternative to the US dollar despite yuan internalisation efforts, political and financial leaders said at a forum at the weekend.

The report by the International Finance Forum (IFF) attributed the trend of using regional currencies rather than the US dollar to the adverse spillovers of unprecedented US monetary tightening.

Global Impact is a weekly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world.

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Photo of arifnsn arifnsn Send an email November 6, 2023
0 84 9 minutes read
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