A Breakthrough in the Relations between the U.S. and China After the Bali Meeting of the 20th epoch of Biden-Xi
Biden and Xi both said in their remarks that they were willing to compromise despite their differences. The two men shared warm greetings before the talks began, as they had previously spent a lot of time together when they were vice presidents.
The leaders of two superpowers met face-to-face and unmasked on the sidelines of the Group of 20 summit in Bali, Indonesia, on Monday evening. In a substantial meeting, they touched on the war in Ukraine, military tension in the Taiwan Strait and North Korean missile tests.
Is he willing to compromise on certain issues? Yes,” Biden told reporters afterward about his meeting with Xi. “We were very blunt with one another about places where we disagreed.”
Since Biden became president, the two have had no face to face interaction. It took place after both leaders had just strengthened their respective political positions at home, analysts say.
Yu Jie, a senior research fellow on China at the London-based Chatham House, believes that Biden’s success in the elections will result in a better relationship between Washington and Beijing.
U.S officials agree with this optimism. A senior administration official told reporters before the meeting that it had created space for reopening what they believed to be simply ongoing work between the two countries.
In what analysts called a “breakthrough,” Beijing and Washington said they would resume climate talks that had been frozen following House Speaker Nancy Pelosi’s controversial visit to Taiwan in August, which Beijing claims as its own. The White House said the leaders wanted to empower key senior officials to maintain communication.
However, Yu warns that Monday’s meeting is just “a baby step” towards improving relations: “It will not resolve any substantial grievances both sides have had against each other, but only slowing down the deterioration of their relations.”
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The State Department said that Secretary of State Antony Blinken will travel to China early next year to follow up on the meeting between the Chinese President and US President Barack Obama.
The US imposed drastic export bans on certain advanced chip technology last month, which are aimed at making it harder to access the technology used in military and artificial intelligence.
On Taiwan, despite intense media speculation over Beijing’s intention, Biden said he did “not think there’s any imminent attempt on the part of China to invade Taiwan.”
“The world is big enough for the two countries to develop themselves and prosper together,” tweeted Hua Chunying, a foreign ministry spokesperson who accompanied Xi in his meeting with Biden.
But the president objected to Beijing’s “coercive and increasingly aggressive” Chinese actions in the waters around Taiwan, according to the White House readout, adding such behaviors “undermine peace and stability across the Taiwan Strait and in the broader region, and jeopardize global prosperity.”
Both Chinese and American militaries have recently been beefing up their capabilities in case of a conflict over Taiwan. For Washington, this is also a part of the broader paradigm shift in its strategy in the Indo-Pacific region. After decades of concentrating its fighting power in the Middle East, the U.S. is now shifting its focus to Asia.
China appeared to be late to the game when Russia invaded Ukraine. Beijing has repeatedly called for an end to the war.
A statement from the White House says that during their meeting, Xi and Biden agreed that nuclear war should never be fought and that they opposed the use of nuclear weapons in Ukraine. The Chinese readout included no mention of nuclear weapons.
Last year, China’s foreign minister Wang Yi put out three core demands — “bottom lines” — that China wanted the U.S. to agree to in order for relations to improve: to not get in the way in the country’s development, to respect China’s claims over places like Taiwan and to respect Beijing’s Communist Party rule.
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And while Biden came in to the G20 with a stronger position due to the narrow Democratic victory in the battle to control the Senate, he is up for reelection in two years himself.
Analysts said the meeting could lead to better ties between countries in the global economy. Stock markets in mainland China and Hong Kong were buoyed as a result, with technology giants such as Alibaba
(BABA) and Tencent
(TCEHY) soaring on Tuesday.
Neil Thomas said that the goal of the meeting was to build a floor under growing relations between Beijing and Washington.
President Biden said that the United States and China needed to work together to tackle global issues, including climate change, debt relief, and food security.
Ken Cheung, chief Asian foreign exchange strategist at Mizuho Bank, said the meeting was a positive sign that the two sides were keen to find common ground.
In recent months, tensions between the United States and China have increased as the countries compete for dominance of the microchip industry and argue over tariffs, US support for Taiwan and potential spy balloons.
The Hang Seng index rebounded 4% on Tuesday, on track to record a third straight day of gains. The index has soared since last Thursday because of China’s latest policy shift towards a gradual reopening of borders and rescue package for ailing property sector.
On Tuesday, Chinese technology shares which have been hammered by a regulatory crackdown at home led markets higher. In Hong Kong, shares of China’s Alibaba were up by 11%, followed by that of China’s Tencent which was up 10%.
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They said it was helpful for the US position on Taiwan and its One China policy to be reiterated by Biden, as was the use of nuclear weapons by Russia.
“This was far more progress than we, or indeed most commentators had expected, and dominates what may otherwise turn out to have been a fairly irrelevant G20 summit,” the ING analysts said.
He was met with polite appreciation from his foreign counterparts. His commitment to the belief that sat at the heart of the vow that was always decried as nave was underscored by his deep skepticism. The only assurance Biden would make was that he would deliver on his promises.
The moment gave us a chance to see the president’s high-stakes theory of the case, which was very aspirational with his party’s narrow congressional majorities. But even as this year began, Biden and his team were grasping to break free of a series of crises and the cornerstone of his agenda – a sweeping bill that included numerous administration priorities – appeared in shambles.
During those 2021 meetings in England and Belgium, Biden found a group of allies genuinely shaken by the January 6 insurrection and the events that led to it. The president was careful to assure them that the divide that came about during that day would heal, and the dark moment in US politics would pass.
“That’s why it’s so important that I succeed in my agenda, whether it’s dealing with the vaccine, the economy, infrastructure,” Biden told reporters in Brussels shortly before he boarded Air Force One for a flight to Switzerland and a sit down with Russian President Vladimir Putin. To continue to make progress, we have to demonstrate we can do it. And I think we’re going to be able to do that.”
He will enter the final two years of his term with much of his agenda now law as he decides whether to seek reelection at 80. Core elements of that agenda were driven by bipartisan consensus. Even Biden’s final bipartisan achievement of the year – the $1.7 trillion spending package – includes an initial $500 million to seed the technology and innovation hubs created by the CHIPS and Science Act in parts of the country outside of traditional tech sectors.
“One thing that is foundational with him is if he says he’s going to do something, he does it,” Steve Ricchetti, one of Biden’s closest and longest-serving advisers, told CNN in an interview, underscoring an approach that has been defined by steady, and at times stubborn, persistence.
Simple as it may seem, a campaign promise or commitment has tipped internal debates on policy decisions more than once, one White House official noted.
Biden’s closest confidants also stress that it’s a perspective that is instructive as the White House prepares for the dramatically reshaped Washington that will confront him upon his return from his family vacation to the US Virgin Islands.
A Biden adviser said that the idea of showing people government can work was mocked. “That’s literally what’s happening now.”
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“A mild recession is possible, a harder recession is possible,” he said Monday. “I think there’s a good chance that inflation will come down, but not enough by the fourth quarter — the Fed may actually have to do more,” he said.
Biden’s approval ratings are low and his age remains a concern for Democrats as they wait for an official decision about whether he will seek reelection.
But Biden’s overarching approach has guided the early-stage planning for the legislative and political implications of a new House Republican majority and served as the basis for aides already working through the outlines of the State of the Union address that will come early next year.
It’s also a defining element of the structure and message planning of a nascent campaign that has taken shape over the last several months and accelerated. A reelection campaign by Biden will be green lit soon, according to his senior team.
White House officials view the political salience of his agenda as both an underappreciated element of their ability to defy the expectations of sweeping GOP gains in the midterms and as a critical piece of what comes next. The agenda is currently being implemented, and it has not been affected by the prospect of a divided government and narrow legislative pathway.
“It forms the foundation for even stronger achievements as the nation heads into the New Year,” Mike Donilon, the White House senior adviser and long-standing member of Biden’s inner circle, wrote in a political memo circulated to allies this month.
Advisers said that Biden had laid down strict directives about the need for efficient implementation in the months to come.
“It’s not subtle,” a senior administration official said of the message from the top. We have to get it right and in the moments that we don’t it is necessary to explain and fix it.
“A lot of people told him that this wouldn’t resonate, or that it wasn’t the message, or that it’s outdated,” Stef Feldman, the longtime Biden aide who served as the 2020 campaign policy director before following him to the White House, told CNN.
Biden viewed his infrastructure proposal, in particular, as a central policy plank of his campaign as Democratic primary opponents raced to outdo one another with transformational progressive proposals – none of which included a viable way to pass a bitterly divided Congress.
What the proposals – particularly across industries and policy priorities tied to climate and manufacturing – also represented was a dramatic shift in what had become an entrenched, if not monolithic, economic orthodoxy. The pursuit of an industrial policy strategy would be overseen by Biden. He’d do so in many cases with Republican support.
Source: https://www.cnn.com/2022/12/28/politics/joe-biden-2022/index.html
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“This was the right moment for his theory of the case,” Feldman said. “He could apply the principles that have really guided him throughout his whole career.”
The principles have largely stayed with Biden throughout his time as a senator and vice president, and were refined during his two years out of office as he contemplated another run for the presidency.
“Ever since I’ve talked to the president about the economy, he’s distinguished between the short-term and the long-term, between consumption and investment,” said Jared Bernstein, Biden’s chief economist as vice president who now sits on the Council of Economic Advisers. These have always been a critical component of his economic thinking.
The core themes of Biden’s 2020 campaign were the same as those outlined in the 22-page memo he drafted in early 2015.
Even the anecdotes from the period – whether the one about Chinese leader Xi Jinping and American “possibilities” or his father’s sayings about the dignity of work, or the importance of “breathing room” – are the same that populate his speeches as president.
A clear through-line from Biden’s time as a senator and as vice president to the first two years of Trump’s presidency was pointed to by Ricchetti, who was a counselor to the president.
Biden wrote a book detailing how he dealt with his son Beau’s battle with brain cancer and his decision not to run for president. The process of getting to know Biden and his inner circle, along with the book tour that followed, is considered essential to a decision to run in 2020.
In the final months of the campaign, efforts to turn that foundation into a coherent policy agenda would have been intensified, with Democrats taking control of the Senate majority.
Officials structured the infrastructure, manufacturing, research and development, climate and equity proposals into interlocking pieces, designed to work in tandem even if they were eventually scaled back during the legislative process.
“At the core of this strategy was that the power of it is that these things work together,” National Economic Council Chairman Brian Deese, one of the architects of the package, said in an interview.
Being enamored with the term industrial policy still isn’t universally embraced. Even Deese, who has driven and defined its core elements, prefers “Modern American Industrial Strategy.” In its simplest form, it’s the idea that “if you do public investment in a thoughtful way, what you’ll actually do is crowd in private investment,” Deese said.
A resurgence in research and development funding. Significant public investments designed for critical areas of national and economic security. Labor unions were elevated and a focus was put on creating conditions to bring manufacturing jobs back to the US.
Source: https://www.cnn.com/2022/12/28/politics/joe-biden-2022/index.html
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On their face, these issues are politically popular and hardly exclusive to Biden. They’re also exceedingly difficult to turn into policy. At least until the outbreak of swine flu.
The bipartisan push for the $280 billion CHIPS and Science law was driven by the importance of the tiny chips in everything from cars to advanced weapons systems. It underscored the salience of the issue when Sen. Todd Young, an Indiana Republican up for reelection in 2022, drove the effort on Capitol Hill.
For Young, who had pressed for legislation tied to the issue in the year before Biden entered the White House, it was less about embracing a broader shift in economic policy and more about addressing the fact China had pursued exactly that for a decade or longer. Young was part of a group of 17 Senate Republicans who voted in favor of the eventual law that has led to new private sector investment.
The pandemic. Policy making in both parties is influenced by the rise of China. A president animated by the idea of long-term economic incentives crafted to connect workers and communities left behind for decades.
Kaufman, the former Delaware senator and one of the president’s closest friends, said that knowing what you are doing gives you a sense of confidence. “This is a guy who is so incredibly well qualified to be president because of experience.”
It is an implicit acknowledgment of the unprecedented factors that caused an opening to the presidency for Biden. Another incumbent, or another moment, and advisers note that it wouldn’t be a question of if Biden would win. He wouldn’t have even run.
Perhaps most critically for Biden, the voters sharply reject some of the most extreme voices parroting 2020 election lies in critical races for governor and secretary of state.
In the months leading up to the elections, Biden would recount his experiences with his foreign counterparts in a bid to underscore the stakes.
After he returned from Indonesia he was ready to give an updated version as he stood against a new factory in Arizona to celebrate an announcement by a Taiwanese chip maker that it would be moving its manufacturing operations to the US.
The United States is better positioned than any other nation to lead the world economy in the future if we focus on it, according to Biden.
“The thing I worry the most about is Ukraine,” he told Bloomberg Television in an interview Monday morning. “It’s oil, gas, the leadership of the world, and our relationship with China — that is much more serious than the economic vibrations that we all have to deal with on a day-to-day basis.”
Global supply chain disruptions have led to inflation and interest rate hikes from the world’s central banks, as a result of Russia’s invasion of Ukraine, which began more than a year ago.
“This is the most serious geopolitical thing we’ve had to deal with since World War II,” Dimon said Monday, also highlighting the war’s impact on relations with China.
The Chinese government is buying Russian energy and other equipment and giving the Kremlin an economic boost due to their close relationship with Moscow.
Dimon said JPMorgan Chase is taking an active role in improving the relationship between the United States and China by advising and engaging with both governments on keeping cordial relations. He doesn’t think a business solution exists to ease growing disputes but he is hoping thatcooler heads prevail. He said that it was the government that needed to smooth tensions with Beijing, not private enterprise.
“We probably should have started resetting this 10 years ago,” he said. The US government needs to have a very serious conversation with the Chinese government.
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The Federal Reserve could possibly go for a soft landing in which interest rates are reduced while avoiding recession, but that is still a hope of Dimon. His outlook is still cloudy.
The consumer in the U.S. is still healthy and has more money in their bank accounts than before the Pandemic and they are still spending it.
Even though America will enter a recession, he said, consumers will be better able to weather it than they were in 2008.