Xi-Biden meeting to inject stability into troubled world economy
Published: Nov 13, 2023 09:58 PM
Reporters work at the media center for the APEC meetings on November 12, 2023 in San Francisco. The APEC Economic Leaders' Week runs from November 11 to 17. Photo: Xinhua

Reporters work at the media center for the APEC meetings on November 12, 2023 in San Francisco. The APEC Economic Leaders' Week runs from November 11 to 17. Photo: Xinhua

When Chinese President Xi Jinping and the US President Joe Biden meet for the first time in a year in San Francisco later this week, there will be a complex, urgent set of bilateral and global issues for them to address, ranging from fraught bilateral ties to mounting global challenges. Still, one topic will garner much attention worldwide: how the world's two biggest economies plan to stabilize their economic ties and help lead the global economy out of its current predicament. 

Since the two presidents last met in Bali, Indonesia, in November 2022, both bilateral economic ties and the global economy have faced mounting risks and challenges. The US, despite repeated pledges of not seeking to decouple from or contain China, has continued to crack down on Chinese firms and products under the guise of national security. Meanwhile, the global economy is still struggling to shake off adverse impact from the COVID-19 pandemic amid high inflation, aggressive monetary policies in countries like the US and geopolitical conflicts.

Amid such profound risks and challenges, the meeting between the Chinese and US leaders, a culmination of a flurry of official interactions over the past several months and a crucial sign of joint efforts to manage differences and stabilize ties, will offer a much-needed sense of stability for the world economy, Chinese analysts said on Monday. 

Moreover, at the 30th APEC Economic Leaders' Meeting, a key platform for economic cooperation in the Asia-Pacific, China will reiterate its vision for and efforts to build open, inclusive regional and global economies and reject decoupling and protectionism, which will further help boost confidence in the region and globally, analysts noted.

Rising expectations

After China and the US announced on Friday that the two presidents will meet in San Francisco, global expectations for a constructive dialogue have been rising, even though some analysts remained cautiously optimistic about any potential breakthroughs. 

"The world's economy could surely benefit from a US-China détente," US news agency the Associated Press reported on Monday, noting that China and the US together produce more than 40 percent of the world's goods and services and such a rare high-level meeting can have global consequences.

Such expectations are justifiable considering the litany of troubles the world economy faces and the crucial role China and the US play. Citing negative factors such as the long-term consequences of the pandemic, the Ukraine crisis, and increasing geoeconomic fragmentation, the IMF in October said that global growth is forecast to slow from 3.5 percent in 2022 to 3.0 percent in 2023 and 2.9 percent in 2024, lower than the average of 3.8 percent between 2000 and 2019. Meanwhile, the IMF said China and the US will contribute more than 30 percent of global growth in the next five years.

"China and the US are the stabilizers and engines of the global economy. So the meeting of the leaders of the two countries will undoubtedly inject positivity and stability into the global economy amid a period of profound downside risks," Liu Ying, a research fellow from the Chongyang Institute for Financial Studies, Renmin University of China, told the Global Times on Monday. 

Citing positive outcomes of recent interactions between Chinese and US senior officials, Liu said that there could be "certain consensuses" reached at the leaders' meeting in the economic and financial areas.

Ahead of the upcoming leaders' meeting, Chinese and US officials have held multiple rounds of meetings. In the latest development, Chinese Vice Premier He Lifeng and US Treasury Secretary Janet Yellen met in San Francisco last week and had what both sides describe as candid and productive talks, which were aimed at, among other things, preparing for economic outcomes of the leaders' meeting. 

The two sides agreed to further strengthen communication and stressed that China and the US are not seeking economic decoupling, according to the Chinese Finance Ministry. The two sides also agreed to jointly tackle shared challenges, including economic and financial stability and regulatory issues. They also agreed to cooperate on issues such as climate change, debt problems of low-income and emerging market economies and reform of multilateral financial frameworks.

These consensuses portend a constructive outcome of the leaders' meeting, where they will likely stress the need to stabilize bilateral economic ties and strengthen cooperation on global challenges, analysts said. 

"Solid conditions have been formed for the leaders' meeting to achieve some positive outcomes," Mei Xinyu, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Monday, "such positive outcome will offer stable expectations for the world economy."

Still, major differences remain, as the US continues to emphasize "competition" with China, repeats long-standing grievances and vows to protect its "national security" - euphemism for its crackdown measures against China, just to name a few.  

Responding to such rhetoric from US officials, Mao Ning, a spokesperson for the Chinese Foreign Ministry, said on Monday that major country contest runs against the trend of the times, and will not resolve the US' own problems and global challenges. 

"China is not afraid of competition, but it does not agree that China-US relations should be defined by competition," Mao said, adding that the US should respect China's legitimate concerns and legitimate rights to development, instead of only emphasizing its own concerns and harming China's interests.

Defending free trade

Beyond the bilateral meeting with Biden, the Chinese president will also deliver an important speech at the meeting to fully elaborate on China's major propositions on deepening Asia-Pacific cooperation and driving regional and global growth, according to the Chinese Foreign Ministry. 

The APEC, with 21 member economies, accounting for nearly 40 percent of global population and nearly 50 percent of global trade, has become a crucial platform for economic cooperation in the Asia-Pacific. While the APEC region is expected to see a growth of 3.3 percent this year, up from 2.6 percent in 2022, "the legacy of the pandemic, inflation, higher debt, climate change, trade protectionism, geopolitical tensions, and economic fragmentation continue to overshadow outlook," the APEC Policy Support Unit said in a report on Sunday.

Against such backdrop, at the APEC meeting, China will likely reiterate its staunch support for openness, inclusiveness and win-win cooperation both in the Asia-Pacific region and the world, and firmly reject trade protectionism, according to Liu. "In fact, China has been actively advancing regional cooperation through agreements such as the Regional Comprehensive Economic Partnership," she said.

Mei also said that the US' approach of unilateral sanctions and protectionism will only further hurt other countries and itself. "In the Asia-Pacific, China and the US should both play their own roles and leverage their advantages to promote free trade. Relentlessly sanctioning others and building fences and yards will only cause damages," he said.