China and the US Decide to Compete More Responsibly

The US-China summit in San Francisco ended on a surprisingly positive note. While there are no signs of a wider détente, a short-term rapprochement might stabilize the fraught ties between the two superpowers.

San Francisco Deliverables

The bilateral meeting between Xi Jinping and Joe Biden was held on the occasion of Xi’s participation in the Asia-Pacific Economic Co-operation (APEC), in what was the first visit of a Chinese leader to the US since 2017. On paper, the two sides reached a number of results.

First, the meeting brought the resumption of military-to-military communication which was cut by the Chinese side in 2022 following the visit by Nancy Pelosi, then serving as the US House of Representatives Speaker, to Taiwan. This should also involve a meeting between the ministers of defense after the successor to Li Shangfu, who was removed from his post in late October, is selected in China. The measures, it is widely believed, would help de-escalate the tensions between the two in the South China Sea and overall infuse the feeling of de-escalation. 

A second major agreement concerned the stemming of the flow of fentanyl into the US, which is expected to reduce the number of lethal overdose cases across the country. Since Chinese companies are dominating the market, Beijing’s decision to cooperate – going after the companies that produce various fentanyl precursors – is a significant achievement for US diplomacy. Yet it did not come without concessions. In exchange, the US removed a Chinese public security forensic institute from the sanctions list. The entity was put under sanctions in 2020 over its alleged involvement in the abuses against Uyghurs and other minority groups. Whether the Chinese government will walk the talk and really crack down on the fentanyl trade remains to be seen. 

Moreover, the two powers also touched upon the issue of jointly examining artificial intelligence, especially as it pertains to the risks in its military applications. Another area marked by evident progress is the climate change agenda where Washington and Beijing agreed to resume cooperation.

Overall, the official reaction from the Chinese side to the negotiations in San Francisco was fairly positive. The Chinese news outlets highlighted the progress in mutual relations and the tone has been noticeably friendlier, indicating Beijing’s willingness to stabilize otherwise increasingly hostile bilateral relations. This all comes in striking contrast to what statements were made when Xi and Joe Biden met the last time.

Why the Change?

Reasons for the relatively sudden, but nevertheless expected partial rapprochement vary. Among them, the state of the Chinese economy could be a primary driver. Though the level of difficulties experienced by China is still not fully known, growth has been slowing down as well as net exports, all the while the property sector exhibits signs of regress, and foreign investors are becoming increasingly worried about the general investment climate in the world’s second-biggest economy. Beijing needed the rapprochement with the US as a boost for its economy in an effort to lure investors back into the country.

Nor, as many observers argue, is China happy with the results of the Belt and Road Forum in early November, where attendance was visibly more limited than during the previous summits. Many of China’s close partners from Central Asia, South Caucasus, Africa, and the Middle East did not show up.

Perhaps the Chinese leadership is also concerned with prestige. Holding summits with Russian President Vladimir Putin might serve Chinese interests but only to a certain extent. It has also proved increasingly damaging for Beijing and its relations with the collective West. Prestige matters and the summit with Biden aimed at changing these negative dynamics featuring China along with the US in the duo which would impact the “destiny of mankind.”

Persisting Differences

Despite the progress, however, the two countries remain pretty much in the opposing camps. The summit took place amid the immediate fallout of the war between Israel and Hamas and a long-running conflict in Ukraine. Washington considers Beijing’s diplomatic efforts to wedge itself in peacemaking processes in Ukraine and Israel-Palestine as deeply one-sided. China’s peace plans for both conflicts were essentially rejected by Washington and its allies in Europe and Asia. At the same time, Beijing paints Washington as inflaming both conflicts.

In contrast to the Chinese readout after the summit, the US version mentioned Ukraine and the war in Gaza. But China is unlikely to cooperate in helping resolve those conflicts in a manner that would benefit the West, largely because the situation presents a long-term opportunity for Beijing. China sees it as a chance to gain time and potentially keep the West away from its borders, Taiwan, and perhaps even the wider Indo-Pacific region. For China, the two geopolitical crises echo the early 2000s when the US was preoccupied with global terrorism, offering Beijing a chance to bolster its position for future competition with the US. 

China also remains convinced that the West and especially the US are experiencing a decline in geopolitical influence. The two wars as well as the shifts in the Middle East where Arab states are increasingly open to China’s growing involvement, fit into this vision and give Beijing more strategic flexibility. The longer the US fails to restore peace in the region, the larger room for maneuver there will be for China. With the wars in Eurasia engulfing Washington’s allies and the looming presidential elections hinting at potential domestic instability, the US diplomatic and military potential has been stretched thin. China seeks to grasp this opportunity.

Still, both countries needed this short-term pause to re-assert their positions knowing full well that the competition in all areas will continue. The Chinese leadership is not naïve to believe that the US will abstain from continuing to build military and political coalitions in the Indo-Pacific region to counter China. Nor is Washington convinced that Beijing will be cooperative and abandon its ambitions in the development of AI, reshaping Eurasia’s infrastructure and in the military sphere. Meanwhile, the long-standing differences on Hong Kong, human rights in Xinjiang and elsewhere, and value issues, illustrated by the dictator remark made (again) by Biden, show the deep distrust between the two leaders and countries that is not going to disappear.

The summit nevertheless was a much-needed show of restraint. It signaled that the two powers can cooperate in some areas and that the two leaders maintain direct contact, spurring a momentum for improved ties, however limited and short-time it could be.