SUMMARY
- The Vienna meeting between senior US and Chinese officials marks a clear effort by both sides to resume limited cooperation and dialogue, as Biden and Xi had agreed at their meeting in Bali last November.
- While the two sides aim to put a floor under the relationship, mutual distrust and domestic politics limit their willingness to make major concessions to the other side; domestic politics are also a key challenge and will become more complicated in the run-up to Taiwan’s January 2024 presidential election and the US presidential election in November 2024.
- The next six months are likely to be moderately more stable and predictable for the US-China relationship than the last year, but this will do little to restrain technology restrictions and other key fronts in the US-China rivalry.
US National Security Advisor Jake Sullivan and Wang Yi, China’s senior diplomat, met in Vienna for two days of meetings that ended on Thursday. The fact that the meeting was held – and appears to have been reasonably constructive according to US and Chinese readouts – marks a clear effort by both sides to “get back to Bali” (as US officials have put it).
At their meeting at the G-20 summit in Bali in November 2022, Biden and Xi signaled agreement to try to arrest the downward spiral in the relationship and reopen blocked channels of dialogue. That effort faltered in the wake of the balloon episode in February, and then China’s anger at the visit of Taiwan President Tsai Ing-wen to the US and her meeting in California with House Speaker Kevin McCarthy. It is now, hesitantly, back on track.
While both leaders have an interest in preventing tensions from spilling over into a full-blown crisis that could impact their domestic agendas, there are also specific incentives at work.
For President Biden, showing a willingness to engage directly with Beijing reassures allies in the US and Europe, who have expressed considerable angst that Washington is leading them into a new Cold War or even a hot war over Taiwan. Biden will attend the G7 leaders’ summit in Japan on May 19 – 21. Demonstrating that the US is seeking to manage competition will help keep allies in line on issues such as coordinating technology controls and supply chain cooperation and urging (calm) deterrence to protect Taiwan.
While the US side is skeptical that Beijing will be willing to exert any significant pressure on Russia, there is an interest in ensuring Beijing does not provide lethal support to Moscow and in exploring potential for Xi to play some kind of role in helping broker an eventual truce to the conflict.
Beijing had been notably standoffish about re-engaging with the US, insisting that Washington was professing interest in “guard rails” while taking provocative actions towards China, particularly in terms of support for Taiwan. Chinese officials evidently believe that point has been made, reflected in US actions to quietly tamp down the profile of Tsai’s trip and to lower the temperature on the balloon affair itself. Xi is managing a fragile economic recovery and has incentives to avoid the potential for additional US sanctions and export controls should the relationship deteriorate further.
But it is important to stress what this “mini-thaw” does not entail. First, the two sides each remain deeply skeptical that concessions they make will lead the other side to change their behavior in meaningful ways. Beijing, as Xi said at a speech during the National People’s Congress in March, believes that the US is out to “contain, suppress and encircle” China. Chinese officials perceive that Biden has limited political room to be softer on China even if he wanted to. Washington, for its part, sees Xi as fixed on his current domestic and foreign policy course after 10 years in power and responsive only when China’s core interests are at risk.
Second, domestic politics will make it difficult to lower tensions – particularly as the 2024 US presidential election approaches. The fact that the Vienna meeting was kept under close wraps until concluding shows how sensitive it is for the Biden team to be seen as “courting Beijing.”
In an unusual closed full committee briefing, the Senate Appropriations Committee on Wednesday heard from Secretaries Austin (Defense), Blinken (State), and Raimondo (Commerce) the lead cabinet members shaping and implementing the US-China competition strategy for President Biden. It is even more unusual not much has yet been shared from the session. Together, the Vienna meeting and the classified briefing confirm the challenges of maintaining constructive relations while pursuing crucial strategic national interests.
The “mini-reset” will be limited in scope and duration
It is likely that coming weeks will see some combination of a Biden-Xi call, revival of Secretary of State Blinken’s visit to China (originally planned in February), and planning for trips by Treasury Secretary Yellen and perhaps Commerce Secretary Raimondo.
The calendar for APEC, which the US is hosting this year, will also spur meeting opportunities. US Trade Representative Tai may meet with Commerce Minister Wang Wentao at the APEC trade ministers’ meeting on May 25-26 in Detroit. Most importantly, Xi is likely to attend the APEC leaders’ summit in November in San Francisco, a logical venue for a bilateral meeting with Biden.
With that backdrop, the period from now to November is likely to see US-China tensions become moderately lower or at least more predictable. But this “mini-thaw” is limited in terms of scope and durability.
The effort to keep channels open and avoid a crisis will have a modest effect at best in defraying US actions in areas such as technology controls, including an executive order on outbound investments in critical sectors coming in the next few months. Tech policy remains inextricably linked to national security concerns in both countries.
When it comes to duration, the political calendar will become more difficult towards the end of the year. Taiwan will hold its presidential election in January 13, with an outcome that could be negative for cross-Strait and US-China tensions (a victory by DPP candidate William Lai) or lower those tensions considerably, at least for an initial period (a victory by the KMT or Taiwan People’s Party candidates) (see our recent special report on Taiwan geopolitical risks HERE). The US will also be moving into presidential election season, which will limit Biden’s room to be seen as soft on Beijing and increase both campaign rhetoric and Congressional actions targeting China.
Finally, it is worth noting that, as the balloon episode showed, not even Biden and Xi are in full control of the relationship. Accidents and miscalculations happen, and Beijing and Washington will be responding not only to each other but a complicated set of third parties and potential flashpoints, including Taiwan, Ukraine/Russia, and North Korea.
