Superpower summit set for APEC sidelines as Biden and Xi seek to stabilize relations

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The most consequential part of the Asia-Pacific Economic Co-operation (APEC) summit in San Francisco this week may well be a meeting on the sidelines between U.S. President Joe Biden and Chinese President Xi Jinping – their first in a year.

They are expected to make fresh efforts to stabilize an eroding relationship that was derailed at the start of 2023 when a Chinese spy balloon drifted across North American airspace before being shot down by U.S. fighter planes off the South Carolina coast.

The Biden administration has avoided describing fraying economic ties between China and the United States as a “decoupling.” It has preferred instead to speak of “de-risking,” or “friend-shoring,” as both sides reduce their commercial interdependence on each other and turn to friendly allies instead for critical minerals and inputs.

Signs of the tensions abound, from electric vehicles to China’s “panda diplomacy.”

Last month, citing national security, Beijing tightened restrictions on exports of graphite, a crucial material in electric-vehicle batteries. China refines more than 90 per cent of the world’s graphite into the material used in EV battery anodes and this measure will drive up the cost of batteries around the globe. In August, it curbed exports of two metals vital to microchip production: gallium and germanium.

And on Nov. 8, the last giant pandas left the Smithsonian’s National Zoo in Washington to return to China, bringing an end – at least for now – to more than half a century of loaned pandas in the U.S. capital that began shortly after then-president Richard Nixon’s historic visit to Communist-led China in 1972.

The APEC summit, which ends with a leaders meeting this Wednesday through Friday, will attract hundreds of CEOs and more than 20 world leaders including Prime Minister Justin Trudeau.

Mr. Trudeau will be spared the risk of an awkward encounter with Indian Prime Minister Narendra Modi, whose government he accused of arranging the gangland-style killing of a Canadian citizen, because Mr. Modi is skipping the meeting.

Both the United States and Britain have spoken out in support of Canada in the conflict, which escalated in October when India stripped 41 Canadian diplomats posted to India of their diplomatic immunity.

On Friday in New Delhi, U.S. Secretary of State Antony Blinken echoed the need for India to co-operate in Canada’s probe of the June, 2023, murder of Hardeep Singh Nijjar.

“We think it’s very important that India work with Canada on its investigation, and that they find a way to resolve this difference in a co-operative way,” he said.

The last time Mr. Biden and Mr. Xi met, in November, 2022, on the sidelines of the Group of 20 summit in Bali, the two pledged more frequent communication.

“We’re going to compete vigorously. But I’m not looking for conflict, I’m looking to manage this competition responsibly,” Mr. Biden said in Bali.

The thaw was short-lived. American furor over what appeared to be a wayward spy balloon forced the cancellation of an important meeting with Mr. Blinken and a return to the fraught relations that followed then-House Speaker Nancy Pelosi’s August, 2022, visit to Taiwan.

China reacted to her trip with aggressive military exercises encircling the self-governed island that Beijing has warned it wants to annex, even by force, and announced it was cutting off co-operation with the United States on climate change and other matters.

Both countries have their hands full with other pressing matters as they seek to repair their strained communications channels. U.S. focus is already divided between supporting Ukraine in its battle against a Russian invasion and efforts to stop the Israel-Hamas war from spreading beyond the Gaza Strip.

Mr. Xi, meanwhile, is grappling with economic problems at home including a continuing property crisis, dramatic levels of youth unemployment and a pullback by foreign investors.

Jude Blanchette, a Washington-based China expert at the Center for Strategic and International Studies, said results from a San Francisco meeting could include better military-to-military communications and working groups on issues such as climate change and artificial intelligence.

He said another motivation for Mr. Xi can be found at a gala banquet this Wednesday in San Francisco, where he is expected to speak to American-China business groups. Mr. Xi needs to address a significant drop-off in foreign business investment driven by Beijing’s draconian pandemic lockdowns, regulatory crackdowns on companies in the name of national security, and the hostile U.S. attitude toward China in Washington over recent years.

He said the dinner should generate “visuals of Xi Jinping in the United States glad-handing with U.S. corporations and investors, and the hoped-for signal that this sends: that China is open for business.”

Bonnie Glaser, head of the Asia program at the German Marshall Fund, said perhaps one of the most pressing matters is getting China to resume law-enforcement co-operation, and particularly on counternarcotics. China is a major source of fentanyl or precursor chemicals for making the opioid.

“We have a very large number of Americans dying of fentanyl every year. We need the Chinese to step up. They have been reluctant to resume,” she said.

There’s a catch, though, she said. Beijing is demanding that the United States lift sanctions it placed on the Chinese Ministry of Public Security’s Institute of Forensic Science, effectively barring it from receiving U.S. exports. China says these sanctions hinder the work of its National Narcotics Laboratory of China.