Analysis – What China’s Xi gained from his Biden meeting

By Michael Martina and Greg Torode

SAN FRANCISCO/HONG KONG (Reuters) – When Chinese President Xi Jinping met executives for dinner in San Francisco on Wednesday evening, he was greeted with not one but three standing ovations from the U.S. business community.

It was one of several public relations victories for the Chinese leader on his first trip to the United States in six years, where he and President Joe Biden struck deals on fentanyl, military communications and artificial intelligence on the sidelines of the Asia-Pacific Economic Cooperation summit.

All three were results that the United States expected from China, rather than the other way around, said two people briefed on the trip.

But Xi appeared to have achieved his own goals: obtaining concessions on U.S. policy in exchange for promises of cooperation, easing bilateral tensions that would allow a greater focus on economic growth, and having a chance to attract foreign investors who Increasingly avoid China.

China’s economy is slowing and earlier this month the country reported its first quarterly deficit in foreign direct investment. And the ruling Communist Party has been battling political intrigue that has raised questions about Xi’s decision-making, including the sudden and unexplained removal of his foreign and defense ministers.

“If the U.S. and China can manage their differences … that means Xi Jinping doesn’t need to focus all his attention on it (bilateral relations),” said Alexander Neill, an associate researcher at the Pacific Forum in Hawaii. Tank.

“He needs to focus on his domestic agenda, which is incredibly urgent.”

Lifting sanctions for cooperation

Securing Xi’s promise of Chinese cooperation to stem the flow of fentanyl into the United States was high on Biden’s to-do list for the summit. A senior US official said the agreement, under which China would take action against certain companies producing fentanyl precursors, was made on a “trust but verify” basis.

In return, the U.S. government on Thursday removed a Chinese forensic public security institute from the Commerce Department’s trade sanctions list, where it was placed in 2020 over alleged abuses against Uyghurs, a long-held diplomatic target of China.

Critics warned the lifting of sanctions against the institute would signal to Beijing that listings of U.S. companies were negotiable and questioned the Biden administration’s determination to pressure China over the Chinese government’s alleged genocide of Uyghurs .

“This undermines the credibility of our entity list and our moral authority,” said a spokesman for the Republican-led House Select Committee on China.

Additionally, Biden’s Republican opponents argue that the U.S. is missing an opportunity by not taking advantage of China’s slowing economic momentum for further diplomatic gains.

Biden also called a success an agreement to resume military dialogues that China aborted after then-U.S. House Speaker Nancy Pelosi’s trip to Chinese-claimed Taiwan in 2022.

But even if Beijing would welcome less tension, it is unlikely to change China’s military behavior that the U.S. considers dangerous, such as the interception of American ships and planes in international waters, which has led to a number of near misses.

“China fears that hotlines could be used as a potential pretext for a U.S. presence in areas it claims as its own,” said Craig Singleton, a China expert at the Foundation for Defense of Democracies in Washington.

Biden administration officials have acknowledged that building a working military relationship will not be as easy as biannual meetings between defense officials.

“This is long, hard, slow work and the Chinese need to see the value of these millions before they do it. This will do us a disservice,” a senior Biden administration official told Reuters in October ahead of the Xi-Biden meeting.

In his public remarks to Biden, Xi suggested that China seeks peaceful coexistence with the United States, telling business leaders that China is willing to be a “partner and friend” to the United States in various industries and the use of exit bans and detentions against some managers.

Similarly, Xi’s televised garden walk with Biden and the largely respectful reception given to Xi by his American hosts were highlighted in China’s tightly controlled media to show a domestic audience that their president is managing the country’s most important economic and political relationships .

“Xi Jinping may have made the calculation that exaggerating the American threat will do more harm than good to China and its standing in the party and the party itself,” said Drew Thompson, a former Pentagon official who is now a researcher at the National University of China Singapore is .

“The fact that we are debating whether China is investable is a real problem for China.”

At the same time, Xi reiterated to Biden points he made to Russian President Vladimir Putin earlier this year, urging the U.S. president to view U.S.-China relations through “accelerating global transformations that have occurred for a century.” didn’t give.”

Analysts say that’s code for the belief that China – and Russia – are reshaping the U.S.-led international system.

However, this time pragmatism may have prevailed over ideology.

China recognizes that it is still necessary for its economic progress to have somewhat normal relations with the United States and Western countries, said Li Mingjiang, a professor at the Rajaratnam School of International Studies in Singapore.

“It is the fundamental driving force behind the meeting.”

(Reporting by Michael Martina and Greg Torode; additional reporting by Trevor Hunnicutt in Washington and Antoni Slodkowski and Laurie Chen in Beijing; Editing by Don Durfee and Tom Hogue)

Copyright 2023 Thomson Reuters.

Brian Ashcraft

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