What will Joe Biden and Xi Jinping discuss at the APEC Summit?

What can senior leaders do to ease tensions between the United States and China? U.S. President Joseph Biden and PRC President Xi Jinping are set to meet this week at the APEC (Asia-Pacific Economic Cooperation) summit. It would be the first time President Xi Jinping has visited the United States since 2017, when he met with former U.S. President Donald Trump. Why is his visit so important right now? Professor of Political Science Jack Zhang joins the National Committee on November 9, 2023 to discuss the shared goals between the two leaders, predict the main takeaways from the APEC summit, and help us understand the summit in the greater context of U.S.-China relations.

Transcript

Jack Zhang: My name is Jack Zhang. I’m an assistant professor of political science at the University of Kansas, and I also direct the KU (University of Kansas) Trade War lab.  

Why is it important that Xi Jinping is visiting the United States right now?  

Jack Zhang: Yeah, I mean, short answer is it’s long overdue. Right? Since the end of the Cold War. I believe we’ve had a Chinese head of state visit every about every two years or so. But the last time the Chinese had a state, President Xi, was in the U.S., I believe was 2017 in Florida. So that was six years ago, right? And these past six years have been some of the worst, most tumultuous and conflict sort of filled years of U.S.-China relations since normalization. 

So, you have mounting strategic competition, that really started with the Trump trade war. These tariffs are still in place, and I’ll return to that later. In 2018, just as we thought, maybe the trade war was coming to an end. 2020, COVID hits. Mutual recrimination, finger pointing, a lot of acrimony. And then quickly, after the Biden administration coming in, I think some of us were hoping that maybe tensions will cool. 

But instead, actually, we’ve seen a ramping up of economic competition, really deepening of this trade war into the tech war, into something like tech containment and multilateral pressure. And so things are bad in U.S.-China relations. Public opinion is worse than ever. Public opinion, I think, in the U.S. [of] China is 83% unfavorable. In China, I think it’s 75% unfavorable towards the U.S. So, pretty bad. 

And so in this context, I think it’s really promising and important that leaders of both sides see the need for putting guardrails on what I think is the most consequential bilateral relationship in the world. To identify some mutual areas of cooperation, mutual interests, and maybe, you know, if we can hope, to deescalate somewhat and maybe bring about a reset of the relationship, although I’m not so optimistic there. 

Just to throw in an analogy, I always, you know, think that rivalries and competition I don’t think have to be destructive. I’m a college basketball fan. And, you know, I hope for U.S.-China relations to be more like the Duke-UNC rivalry and competition, where it’s passionate, it’s intense, there are real stakes, but it’s not an existential war for survival. 

It’s not a you-win, I-lose. I mean, in the game it is right. But it’s not a no prisoners taken type of competition where, you know, we go burn down each other’s stadiums or something like that. And instead, that rivalry pushes each team to be better. So I hope, you know, I don’t think we can avoid U.S.-China competition moving forward. Some of that competition could even be healthy. 

But I hope that this kind of meeting will be a small step towards making that competition constructive rather than sort of destructive and destabilizing.  

What issues will be brought up during the summit?  

Jack Zhang: Well, as you may know, Lawrence, Kansas is very far from Washington, D.C. And so I don’t have any special insight into this other than just reading the news. 

But I think there have been some headlines that hint at what the agenda of the meeting will at least touch on. I think there’s a round of nuclear arms control talks that that’s been happening in the background that probably will be on the on the agenda. And this is timely and important for the U.S. . The U.S. is now entangled in two conflicts that involved nuclear powers. 

The war in Europe after the Russian invasion of Ukraine and now the Israel-Hamas war. But with Iran and worry of there being skirmishes between U.S. forces and Iranian proxies. So the last thing that the U.S. wants or the administration wants is a crisis involving another nuclear power, being that China or North Korea. 

And rehashing that would also be bad for the world economy. So any progress on arms control, especially as Russia is pulling out of some of these Cold War era agreements, would be beneficial. And so it’s nice to see the U.S. and China potentially addressing that. Related to that a little bit is I think the hope that military-to-military dialogues will resume after being frozen since the trade war and controlling for making sure that accidents don’t happen in tensions in the South China Sea, which have also been in the headlines again this past couple of weeks. 

Turning next to a different subject, climate is almost certainly going to be on the agenda. I think John Kerry had a productive talk to the Chinese counterpart and it looks like the U.S. and China are trying to at least get on the same page ahead of the COP 28 summit. So, I’m sure there’ll be some nod, especially at this [event] in California. 

And that was—I think there’ll be a nod to climate change and green technology there. I would assume that law enforcement will also be on the agenda, particularly from the U.S. side. The ask is that China help limit fentanyl precursor chemicals from coming to the U.S. The Biden administration has either announced or has already implemented some sanctions against Chinese firms that are involved in identifying to be involved in this kind of trade. 

But maybe that carrot and stick sort of approach on this issue, which has devastated U.S. communities and is high up on the agenda for Congress, will be touched on here. I would guess now, just more and more speculative, I would venture to guess that U.S. asks will also include calls for China to pressure Russia to end in the war in Ukraine, to call on Iran maybe for restraint, [or] to share intelligence, perhaps vis-a-vis North Korea. 

Those are issues of concern on national security front for the U.S. and areas where China has some leverage. And on the other hand, China probably will be concerned and ask about sort of U.S. stance, reaffirmation maybe of the One China policy in Taiwan, ahead of these elections that are due in Taiwan in January of next year. 

Another area that China probably will push the U.S. is for, you know, a clarity about what de-risking is and decoupling. The Biden administration has said that it’s trying to pursue de-risking, not decoupling and not containment of China. But a lot of the instruments are the same in those categories. And as I’ve mentioned before, the tariffs that the Trump administration put into place are still in place, and consumers and businesses and 

producers in both countries are paying costs for that. And so maybe that’s probably too optimistic, heading into an election year here in the U.S., whether there’ll be substantive over there. But at least some clarity about the, you know, the aims and extent of some of these economic statecraft variables to be discussed. And finally, I think we’re close, closely aligned to what the National Committee has been calling for, like people to people exchanges, [which have been] moribund since the pandemic. 

And, you know, flights are still really limited between the U.S. and China. Direct flights, a lot of academic programs are on ice. Visas or a source of uncertainty. And so all of those things, I imagine, could be, you know, would be productive parts of the agenda.  

What are shared goals between the United States and China? 

Jack Zhang: Yeah, I think there are many fundamental goals that the U.S. and China share in common. First is peace, or avoiding war, to be more specific. I mean, if you read the headlines these days, it feels like we’re heading towards a World War Three type of scenario sometimes. And so, you know, avoiding a direct U.S.-China confrontation would definitely be the interest of both countries. 

Both are nuclear powers, the first and second largest economy in the world—[it] would be devastating on all levels. So definitely avoiding that. And beyond that, you know, putting an end to wars in Europe and the Middle East and in Africa, where both U.S. and China have economic interests. Peace in those circumstances will serve the interests of both nations and also the welfare of the people who are caught in the middle of those conflicts. 

So first is peace. Second is economic development and things like growth. This used to be a ballast in the U.S.-China relationship. And in particular, I think maybe there’s room for cooperation in that I personally believe that one of the causes of the trade war was overconfidence by either side that they were going to be less hurt by the measures that they were putting into place to coerce the other side. 

But it turns out the trade war is just really destructive for both economies, and right now, in particular, the Chinese economy in the past couple of quarters is really struggling. Unemployment is is high, maybe higher than the official numbers even suggest. Companies are default. Major sectors of the economy tied to real estate or [the] long-term sort of engine of Chinese domestic growth is slowing down and has big problems. Foreign direct investment going into China are at the lowest levels since I remember. 

So all these are pressures that maybe may increase the appetite for cooperation. That would be good. The U.S. economy looks better off in the short run at least, but I think if we’re looking at it seriously, we have to acknowledge a serious structural problem, especially with debt. In the U.S., I think debt servicing is now in the range of $1 trillion or something like that a year. 

It’s insane. And so the long acknowledged structural imbalances between the U.S. economy and the Chinese economy, we’ve been talking about this for like a decade. As far and as long as I’ve been following this issue. There are common interests in resolving some of these imbalances, in particular excess savings, investment in China, excess debt in the United States, and, you know, debt-fueled sort of consumption. 

I think the trade war was a distraction from all of that. It’s not a macroeconomic fix that addresses some of these things and actually, I think [it] exacerbates these problems. So moving towards, again, finding room for cooperation on economic growth or maybe structural reforms even would be really important. Climate change, of course, you know, both governments acknowledge this is a serious problem. 

Both governments want to move towards greener technologies, more sustainable economies. How to implement and cooperate, I’ll defer to you—you guys had a really good series recently with [Public Intellectuals Program fellow] Michael Davidson, so check that out for climate at APEC. So I won’t talk more about that. And lastly, I think, science and technology development, which is one of the early areas of cooperation between the U.S. and China, has really been frayed since the onset of the trade war and especially during the pandemic. 

Mutual suspicions of researchers and, you know, fear of secrets, data security or, you know, business secrets, you know, flowing in and out. So on two areas here related to science and technology, I mean, one is just on regulation, right? So even if both the U.S. and China want to be leaders in, you know, the technologies of the future, that’s understandable. 

That still requires in a global economy to have common standards when it comes to AI or EV (electric vehicles) or robotics or genetics or mRNA vaccines, cryptocurrency or what have you. Space exploration, all of those require. And countries will benefit from having converging on certain standards for mundane things like what size charger you want to use for EVs or—if we converge on one standard it’s much better. 

So that’s certainly an area. But then the other side of the scientific technology question is, I hinted earlier, is the education and the collaboration bit, which has really suffered, right? I mean the National Committee’s done really good work on this highlighting this. I mean, the China Initiative was just a disaster for Chinese Americans like myself, especially working in STEM in the U.S. 

And what China has been doing with the espionage law and campaign puts a damper on, you know, there’s many fewer already expat researchers and workers in China, but I imagine there will be many fewer. These kinds of policies that discourage collaboration by research institutions, by universities like mine, so I hope that, you know some high-level sort of government mandate will create the room for some of these. 

What can both leaders do during the summit to improve the U.S.-China relationship?  

Jack Zhang: Yeah, and we just talked about a lot, and I don’t—time is limited, and I don’t think they’ll be able to get through and solve all of these problems. But I think the important thing is that having high-level meetings face-to-face like this sets the tone for bilateral relations for the whole bureaucracy of state, and I think creates political space right then for lower units and, you know, even non-state actors to kind of coordinate upon. 

Empowering lower-level officials who substantively know the issues and can solve some stuff and identify—they probably know areas where cooperation would be good. And there’s probably thousands of these but that are frozen pretty good, particularly I think, on the Chinese side. Right, Given the political climate that’s resulted from the trade war and the drive towards technological self-sufficiency and the siege kind of mentality, it’s really hard, I think, for initiative that used to be common from Chinese provinces or ministries to seek cooperation on substantive technical issues that are both beneficial, both beneficial to China and the U.S. 

Let’s take education for example. I think I’ve heard anecdotally from colleagues that there’s been, you know, kind of a schizophrenic reaction among Chinese partners about education exchange because it’s just not clear whether it’s going to get you in trouble or, as it’s been in the past, it’s been a good thing and can get you promoted. Right. So, I think having the political space created by the top leaders of both countries, again more influential, I think, in China than in the U.S., will hopefully solve some of those expectations problems lower down in government. 

You know, then there’s like low-hanging fruit. So maybe they can—probably have already negotiated some areas of things that they can announce afterwards as achievements. So, I don’t know. You guys probably have more insights on the National Committee side of what some of these might be. I could suspect, you know, flights, for example. Right. It’s an easy one, relatively easier one for the two governments to solve and allowing sort of more direct flights. Again, law enforcement on drugs, I think should be a no brainer, right, that I hope that the Chinese side, which has its own—and has cooperated with the DEA on drug interdiction and has very strict laws on drug use domestically to also be sympathetic to the problem that fentanyl’s causing in the United States and, you know, intervene to prevent these precursor chemicals from contributing to that problem. 

Another other one is improved business climate, I think is not an easy one, but like a low-hanging fruit, relatively speaking, in that, you know, historically both countries have welcomed investors from the other country. And in the past couple of years, that’s not been the case. There’s a lot of uncertainty, a lot of sense that foreign businesses are being unfairly treated, just even just whether they’re welcome sort of at all. 

And, you know, there’s a list of more concrete sort of actions that are taken that our friends in U.S-.China Business Council and AmCham (American Chamber of Commerce) have put together, whether these get right top-level attention—I mean, even acknowledging some of these issues, I think would go a long way in helping them get resolved—you know, I this is by no means a low-hanging fruit, but I’m biased because of what I work on, the tariffs, I think should be a low-hanging fruit. These are Trump-era tariffs that I would encourage the Biden administration to let go of. The economic analysis is very clear. They’re self-defeating. They’re dead weight loss. You know, if they are creating jobs, they’re at tremendous expense here in the U.S. And so, they’re just making supply chains worse. 

And, you know, it’s a chance for the Biden administration, I think, to differentiate itself from, you know, from the Trump administration, you know, the likely race with President Trump, because I don’t think you can out-tariff the tariff man. And so, explaining to the American people why trade barriers of this sort is not necessarily to the benefit of the American public, I think, is a thing that I hope the administration can do. I am skeptical whether that that that opinion is held by people in the administration.  

But yeah, so, you know, low-hanging fruit and creating some political space in a short, you know, couple of hours of meeting time, if that, would be a lot to ask for after six long years of waiting.