Biden, Xi Strengthen Economic Commitments at APEC Summit

The recent bilateral summit between Presidents Joe Biden and Xi Jinping held alongside the Asia-Pacific Economic Cooperation (APEC) meeting, was perceived by both leaders as a crucial opportunity to prevent their competitive relationship from escalating into a more confrontational phase. For Xi Jinping, the meeting was also a chance to bolster his domestic standing, which had been affected by a lacklustre economic recovery post-pandemic.

Earlier, U.S. Treasury Secretary Janet Yellen emphasized that the Biden administration wasn’t inclined toward economic decoupling but aimed for targeted restrictions primarily focused on national security. However, the administration’s credibility took a hit due to various punitive measures, such as retaining the previous administration’s tariffs. China interprets the significant decline in U.S. trade and investment flows as evidence that Washington’s intentions surpass routine security concerns.

In response to Washington’s punitive actions, Beijing’s reactions have primarily involved developing domestic manufacturing capabilities for high-tech goods that the U.S. has ceased supplying, as well as strengthening trade relationships with other countries. Xi Jinping reiterated China’s advocacy for open trade policies over protectionism, highlighting that there’s ample space for both countries to thrive in the global landscape. Additionally, he urged Biden to ease export controls on sensitive equipment and endorse stronger bilateral financial and investment ties.

However, Biden is under pressure not to appear yielding due to bipartisan anti-China sentiments. While expressing U.S. support for a free and open Indo-Pacific, which Beijing perceives as a containment strategy, Biden cautiously labelled the discussions as frank and productive. When asked, he reiterated his characterization of the Chinese leader as a “dictator.”

For the White House, the most positive outcomes of the talks included Beijing’s commitment to limit the trade of fentanyl-related components and the revival of military-to-military dialogues, in addition to a renewed focus on climate change initiatives. Both sides aimed to recalibrate relations and establish more robust communication channels. Nevertheless, most economic outcomes were symbolic—continuation of ongoing economic consultations, enhancements in air travel connectivity, and strategies to manage potential oversupply in green technology products. Both sides pledged not to let the relationship deteriorate further.

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