What can we expect from the Biden-Xi meeting
Please check out my Bloomberg Interview about the Biden-Xi meeting
A local perspective on what we hope the meeting accomplishes
1: A clear signal from the meeting that both countries remain committed to strengthening the relationship.
2: A continued softening of the rhetoric between the two countries. Since May, rhetoric and communication have moved in a positive direction. We should expect to see more of this.
3: An indication of where we go from here in the relationship. It already looks like fentanyl will be part of that, at least in the next year. What else will be a focus? Climate cooperation, working to end the War in Ukraine, additional high-level visits, etc.
4: Expect both leaders to “size each other up” meaning watching to see what strengths and weaknesses each has.
The US: They’ll be watching the specific topics and language used, as well as how President Xi interacts at the conference, how he responds to US asks, and how a weakened economy could affect ruling the country.
Some of the Asks: Stop the flow of fentanyl precursors, removing exit-bans of US citizens, treatment of US firms in the country, new national security laws including data restrictions, Iran and oil, the Ukraine War, and military-military communication.
China: they’ll be watching how well Biden moves, interacts, and discusses topics. There has been some discussion in-country that if Biden is seen as a partner that China can work with, things can move forward. If not, China could wait it out until a new US Administration (presumably a Trump one) to move forward.
Some of the Asks: Relaxation of technology controls, tariffs, removal of sanctioned officials and organizations, assurance on TW policy, export controls, not trying to contain China, and equal treatment of China amongst nations and as a global leader.
Expected Outcomes
With the environment between, and in, both countries, we should see modest steps over the next few weeks. Potential steps could be China granting license approval, some changes to legislation, removing exit bans, and some military or other form of high-level communication. Potential US steps could be clarifying export controls, opening opportunities for Chinese firms to get off the entity list, dealing with certain tariffs, and assurance on TW.
Meeting with US business leaders
The $2000 per plate dinner with US executives and leaders shows support for the relationship but also gives a chance to hear from President Xi.
Expect some form of mention, or discussion, on some major issues affecting US businesses in China:
Geopolitical concerns, especially the US-China relationship
Regulatory transparency
National treatment, meaning equal treatment between US and domestic firms for procurement
Market Access
Travel restrictions, including exit bans, lack of flights, issues getting visas
How new national security laws, including data, are going to be implemented
Lack of confidence in the market
Roadmap for the next 5-10 years
Conclusion
Compared to what the relationship has been the last several years, this meeting is positive, and I am overall optimistic that even if the relationship doesn’t improve substantially, it is better to talk than not, and there are areas of cooperation that can be undertaken.