When US President Joe Biden and Chinese President Xi Jinping met at the Filoli Historic House in Woodside, 40 km off San Francisco, on 14 November, both were playing with a ‘weak hand’, if a summit meeting can be compared to a card game.  Biden, a candidate for the November 2024 presidential election, has realized that continued confrontation with China, especially on the economic front, is not good for the US economy, and consequently, for his re-election.  He was keen to demonstrate that he could use personal diplomacy to deliver important results.

President Jinping, who agreed to the summit only after Biden sent as many as six cabinet-level officials to Beijing, has recognized that a meeting with Biden will be politically useful for him. With a rather disastrous Zero Covid Policy that has hit his economy hard, Jinping realized the need to mend fences with Washington to stop the exodus of US investment from China.

But for President Richard Nixon’s decision to recognize  China in 1971, and thereby start a process leading to China’s entry into the World Trade Organization (WTO) in 2001, China would not have emerged as the biggest trading power and a rival to US. In fact,  China gained the most from the globalization process led by Ronald Reagan and Margaret Thatcher in the 1980s, thanks to Nixon.

Nixon did it to bring in China as a counterweight to the Soviet Union during the Cold War era. His successors and the rest of the West invested in China naively believing that economic ‘opening’ will inexorably lead to political reforms leading China in a democratic direction. At present, the West has realized that it needs to deal with China without bothering much about political reforms or human rights issues.

The two presidents spoke for about four hours. Considering the need for interpretation, it works out to two hours. Biden later exulted at his press conference that he had spent 68 hours talking to Xi Jinping over a decade. The two had known known each other as vice presidents.

The outcome was rather modest.  The first and foremost gain, from Biden’s point of view, was Xi Jinping’s agreeing to resume military-to military contacts broken by Beijing when Nancy Pelosi, the then speaker of the House of Representatives, made a high profile visit to Taiwan in August 2022. There have been recent instances of fighter planes getting too close to each other.

While Biden might be pleased to see the contacts resumed, after repeated requests from his administration, it follows that Beijing has succeeded in sending a sharp warning  to Washington not to repeat such visits in the future.

The second agreement was about resumed cooperation in counternarcotics. Fentanyl is an opioid manufactured in Mexico that gets into US resulting in many youngsters killing themselves by drug overdose. Since 1999 such overdose has killed over a million Americans. In 2021 and 2022, the toll was 106,669 and 107,477, respectively, according to a study done by Brookings. The precursors for the drug come from China.  However, China had agreed to act in the matter in 2014 and 2016 without delivering much.

The third agreement was about cooperation in addressing climate change. US and China are the worst polluters.

Xi Jinping had two principal goals: One, to project to his home audience that America has recognized China as its only serious rival and almost a co-equal in diplomatic clout. Second, to stem the outflow of American investment from China and to attract fresh investment. The government-controlled Chinese media has stopped finding fault with Washington and has started telling its readers of the importance of maintaining good relations with the US.

The prevailing impression in India that Western investors are fleeing China and that a good many of them will come to India might need a degree of correction.  In the past few months, Bill Gates, Elon Musk, and JP Morgan Chase CEO Jamie Dimon have been making a beeline for China, showing increased interest in that country. Following the summit, Jinping was hosted by the US- China Business Council and the National Committee on US-China Relations to a dinner, priced at $40,000 for a table for 8. Apple’s Tim Cook, BlackRock’s Larry Fink, and Visa chief Ryan McInerny were there. During the event, Xi Jinping put on a diplomatic charm offensive and got nostalgic about his first visit to the US.

It is too early to say anything about the success of the charm offensive, but obviously China despite its slowing down economy remains attractive to the investor from the West.

The U-China relations remind one of the famous Thucydides’ Trap, a term coined by American political scientist Graham T. Allison in 2012. Thucydides, in his famous History of the Peloponnesian War, wrote, “It was the rise of Athens and the fear that this instilled in Sparta that made war inevitable.”

Will there be a war between US, the reigning superpower, and China, the rising power? In this context, it is pertinent to note that predictions about China’s GDP exceeding that of the US by 2050 need to be taken with a pinch of salt. In 2021, the difference between US and China in nominal GDP was $4.59 trillion, whereas it is $9.25 trillion in 2023. Nevertheless, it is true that Washington has recognized China as the only long-term rival able and willing  to contest its hegemonic position. A hot war between the two is rather unlikely, but a variation of Cold War has already set in.

Coming to implications for India, is there a probability of a G2 between Washington and Beijing in the near future? Clearly, no. That is comforting for India.

As regards investment from the West, India needs to work harder. The recent get-tough act with Canada and the cancellation of negotiations with it for a trade and investment treaty are not projecting the right image.

India needs to note that China has signed 23 free trade agreements (FTAs) and is currently negotiating with 14 other countries, whereas the US has signed FTAs with 20 countries.  Biden’s IPEF (Indo-Pacific Frame Work for Prosperity), which India has joined, is facing headwinds in the US Congress.

India, obviously, needs to work harder for concluding FTAs.


KP Fabian is a diplomat who served in the Indian Foreign Service between 1964 and 2000. He is currently a distinguished fellow at the Symbiosis Law School in Pune. More

More Top Stories: