US and China try to stabilize ties with Biden-Xi summit – Community News
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US and China try to stabilize ties with Biden-Xi summit

US President Joe Biden and Chinese leader Xi Jinping have plenty to discuss at their first virtual summit — from sanctions to Taiwan — even as expectations for a breakthrough on key issues are low.

A Biden administration official said the US expects the virtual summit to last several hours Monday evening at 7:45 p.m. in Washington, a time frame that includes translation for both leaders in their third meeting this year. It comes as the world’s two largest economies regularly spar over the origins of Covid-19, human rights in Hong Kong and Xinjiang, and the status of Taiwan.

While those issues won’t be resolved at the meeting, the US says it wants to put “guard rails” on the relationship so things don’t get worse. The US official, who asked not to be identified, told reporters Biden will urge Xi to adhere to established international standards.

A recent joint announcement on climate change shows that the two sides can work together on some issues. Chinese Foreign Ministry spokesman Zhao Lijian said on Monday that relations are at a “critical crossroads” and Beijing hopes they will return “on the right track of healthy and steady development”.

Xi comes to the top in a strong position after he faced a major hurdle last week to secure a third term as Communist Party leader next year. And while Biden won the passage of a key infrastructure bill, Democratic power struggles and accelerating inflation have hammered his public support a year before the midterm elections.

For markets, signs of bilateral ties improving may support investor sentiment. But the effect could be limited given wider concerns about a global rise in inflation and the continued impact of Xi’s pursuit of “common prosperity” to tackle inequality.

With that background, here’s what the two leaders can choose to focus on:

trade

The US and China are still far apart on economic and trade issues.

While an interim trade agreement signed last year remains in force, the two sides dispute China’s adherence to it. The accord called on Beijing to make changes to intellectual property and other regulations, and had specific targets for Chinese purchases of US goods.

Bloomberg’s calculations show that in the first 21 months of the two-year deal, China bought only half of the goods it promised to buy. Nevertheless, Chinese exports continue to rise and reached a new annual record in the first 10 months of this year.

The US has also signaled other concerns, including the impact of China’s “extremely robust and highly effective industrial policies on our ability to grow, on our ability to compete, on our ability to thrive,” US Trade Representative Katherine Tai said. week. “That’s a bigger conversation that we feel very strongly we need to have.”

Tai is in Asia this week with Commerce Secretary Gina Raimondo to meet officials in India, Japan and South Korea. Biden and Xi could give the green light to meet with their Chinese counterparts now or in the near future.

Financial transparency

China has long refused to allow US regulators to investigate audits of companies whose shares trade on US exchanges, citing national security concerns. US lawmakers say such resistance could expose investors to fraud, and the US has taken first steps to potentially divest some Chinese stocks.

But more recently, Beijing has indicated its willingness to promote cross-border cooperation in the field of accounting. The Chinese securities regulator made a proposal to the US last summer to break the audit deadlock. And China has slowly begun to open up its financial sector to foreign players.

JPMorgan Chase & Co. in August, was the first Wall Street firm to receive approval to take full ownership of a securities firm in China, just ahead of Goldman Sachs Group Inc. Many US companies, including Visa Inc. and Moody’s Corp. waiting on the sidelines for approval. A positive result at the summit could benefit those companies.

Visa

Students, journalists, officials and members of the Chinese Communist Party have all become entangled in visa restrictions imposed by the two countries.

The visas of more than 1,000 Chinese students and researchers were revoked last year for reasons of national security in the US. The Trump administration also restricted travel visas for members of the Chinese Communist Party and their immediate family members.

China is pushing back, with journalists being expelled or forced to leave and return on short-stay visas. This is one area where the two leaders could decide to call a truce.

Sanctions and blacklists

The US has sanctioned Chinese officials and property over Beijing’s treatment of Uyghur Muslims in Xinjiang and the imposition of a national security law in Hong Kong, with China demanding reprisals. Beijing has also sanctioned US officials who “acted abnormally” in relation to Taiwan and US companies for selling weapons to the self-governed island.

It is unlikely that both sides will withdraw from sanctions and blacklists already imposed. But Biden has said he wants to put human rights at the heart of his foreign policy, and is unlikely to pass up an opportunity to raise the issue with Xi.

Technology

While some of the more extreme measures taken in the Trump era — including a possible ban on apps like TikTok from ByteDance Ltd. — have been toned down, Biden still has Chinese technology in his sights. The global semiconductor shortage has exacerbated tensions between the US and China over technology.

Xi has made it clear that he wants his country to become self-sufficient in US-dominated core technologies. That includes everything from chip manufacturing to artificial intelligence. Washington wants to safeguard the competitiveness of its own companies and is increasingly vigilant that its know-how does not end up in the hands of the Chinese military – through forced technology transfer or hacking.

Taiwan

The self-governed island poses the greatest risk of a clash between China and the US. By claiming Taiwan as China’s territory, Beijing has stepped up military, economic and diplomatic pressure, including sending more than 200 planes to Taiwan’s air defense identification zone in October.

Meanwhile, the US policy of “strategic ambiguity” regarding the defense of Taiwan has come under scrutiny after Biden said the US would defend the island if China attacked. US officials said afterwards that there has been no change in strategy. But whether it was a verbal misstep or intentional, the Chinese took notice — and Xi is expected to seek clarity from Biden.

Olympics

Beijing is just weeks away from hosting the 2022 Winter Olympics. While some US lawmakers have called for a boycott of the Games, Biden has not embraced that argument. It is highly unlikely that the US president would consider attending any part of the Olympics, but Xi could expand an olive branch by inviting the US president.


Disclaimer: This article first appeared on Bloomberg and is published under a special syndication arrangement.


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