US-China meeting lays groundwork for stronger economic ties – CNN | CarTailz

Hong Kong
CNN business

Officials attending the first US-China summit under the new Biden administration in March 2021 exchanged undiplomatic words, highlighting the strained relationship between the world’s two largest economies grappling with a simmering trade war.

Since then, relations between the United States and China have continued to cool, particularly after US House Speaker Nancy Pelosi visited Taiwan in August. That explains why expectations for Monday’s meeting between President Joe Biden and Chinese leader Xi Jinping on the sidelines of the G20 summit were so low.

But to the surprise of many, the meeting featured televised images of smiling officials, shaking hands and a commitment to reopening lines of communication on pressing global issues. U.S. Secretary of State Antony Blinken, who engaged in grappling with his Chinese counterparts at the 2021 Alaska summit, is now expected to visit China next year.

Analysts said the meeting could lay the groundwork for stronger ties between the world’s leading economic powers. Stock markets in mainland China and Hong Kong were boosted as a result, with tech giants like Alibaba (BABA) and Tencent (TCEHY) soaring on Tuesday.

Speaking after the three-hour meeting, Biden described It was an “open and honest” discussion in which he said he plans to conduct relations with China “responsibly”.

“We will compete vigorously, but I do not seek conflict,” Biden told reporters.

Xi said in a statement the two countries should prevent “confrontations and conflicts.” Both sides would continue the talks on the basis of the joint understandings already in place and “seek an agreement soon,” he added.

Neil Thomas, senior analyst for China and Northeast Asia at Eurasia Group, said the aim of the meeting was to “create a floor” under deteriorating ties between Beijing and Washington.

“The meeting met or exceeded the low expectations of the Biden administration and was a slight plus for global stability,” he said.

In an official statement, President Biden said the United States and China must work together to address transnational challenges such as climate change and global macroeconomic issues such as debt relief, health security and global food security.

“The two leaders agreed to authorize key senior officials to maintain communications and deepen constructive efforts on these and other issues,” it said.

Ken Cheung, chief strategist for Asian foreign exchange at Mizuho Bank, said the meeting was a positive sign that both sides are keen to find common ground.

“Though there are no tangible results, the resumption of direct dialogue between China-US leaders signaled a slowdown [of] Tensions between China and the US bode well [for] China-US relations after China Party Congress and US midterm elections,” he said.

The relationship is at its lowest level in decades, with tensions over trade, human rights and Taiwan fueling fears of a Cold War between the two world powers. Last month, the Biden administration imposed unprecedented export controls on China’s chip industry, threatening to seriously undermine China’s high-tech ambitions.

Although Biden said he and Xi have fallen far short of resolving the litany of contentious issues, there is no need to worry about “a new Cold War.”

The news was welcomed by investors.

Hong Kong’s Hang Seng (HSI) Index gained nearly 4% on Tuesday and is on track to post gains for a third straight day. The index boosted by China’s recent course change in direction a gradual reopening of borders and a sweeping bailout of the ailing real estate sector, is up 14% since then last Thursday.

Chinese tech stocks, hit by domestic regulatory crackdowns and rising geopolitical tensions abroad, led markets higher on Tuesday. Alibaba shares shot up 11% in Hong Kong, followed by Tencent, which was up 10%.

China’s Shanghai Composite Index was also up 1.6%, while the tech-heavy Shenzhen Component Index was up 2.1%.

The “unexpectedly constructive tone” of the Biden-Xi meeting helped boost markets, analysts at ING Group said in a research note.

Biden’s reiteration of US position on Taiwan and its “One China” policy is helpful, as is Xi’s opposition to Russia’s use of nuclear weapons.

The most surprising development was Blinken’s planned follow-up visit to China.

“This was far more progress than we or most commentators expected, dominating what could otherwise turn out to be a fairly irrelevant G20 summit,” ING analysts said.

– CNN’s Betsy Klein, Kevin Liptak and Jennifer Hansler contributed coverage.

Leave a Comment