Aristotle and how to assess the Biden-Xi meeting
Former Australian Prime Minister Kevin Rudd, one of the world’s top experts on China, quotes Aristotle when reflecting on US President Joe Biden’s meeting last week in San Francisco with Chinese President Xi Jinping
“One swallow does not a summer make, nor one fine day,” Rudd, now his country’s ambassador to the United States, tells me, in reference to just how durable reduced tensions and improved relations between China and the United States might be. That all depends on whether China delivers on its various commitments, whether Beijing follows through on promises to help reduce the fentanyl flooding the United States, and whether restored military-to-military ties lower the risk of conflict.
Xi’s concessions seem more tactical than heartfelt, aimed primarily at addressing his mounting economic troubles. China is facing historic levels of youth unemployment, reduced economic growth, and falling levels of foreign direct investment. (For a deeper look at China’s economic performance in 2023, look no further than this report from the Atlantic Council’s GeoEconomics Center and Rhodium Group.)
Xi’s advisers are likely telling him that he can’t restore growth unless he restores eroded domestic and international investor confidence, and that he can’t do that without this geopolitical charm offensive. What no one seems willing to tell Xi is that his distrust of markets and faith in Communist Party controls are the real problem.
What worries Rudd is that even as Biden and Xi were meeting in California, a Chinese destroyer was shadowing the HMAS Toowoomba, a long-range Australian frigate, endangering its divers by deliberately and provocatively activating sonar while they were working to disentangle their ship from fishers’ netting.
For those looking for a historic shift in US-Chinese relations—positive or negative—don’t mistake last week’s swallow for a change of seasons. It’s a tactical rather than strategic shift, but at least we now have important new behavioral benchmarks for assessing the trajectory of the relationship. Stay tuned as we track the progress.
Fred Kempe
Atlantic Council
President and CEO
Plus
Relying on old enemies: The challenge of Taiwan’s economic ties to China
Global attention to Taiwan tends to focus on China’s military threats and punitive economic actions.1 Combined with US officials’ periodic warnings about an imminent Chinese invasion, these developments suggest that the balance of power between China and Taiwan has tilted decidedly to Beijing’s advantage, underlining Taipei’s increasing vulnerability.2
But a wider view highlights an uneasy economic equilibrium that has constrained Beijing’s worst impulses. Cross-strait relations are anchored in global supply chains built around Taiwan-made semiconductors and Taiwanese electronics manufacturers’ investments on the mainland.3 If anything, China is becoming more dependent on its business ties to Taiwan as it experiences an unprecedented economic downturn and as foreign multinationals begin to move their factories to other countries. China’s economic vulnerabilities are deep, and its reliance on Taiwan is profound.
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