The China system is facing a whole bunch of domestic problems, economic and social, structural and financial, and it has long been argued by some that this is not a good time to be at loggerheads in so many directions externally. The Ukraine war created a rift with Europe, and the relationship with the US has been continually exacerbated by a long list of issues. It hurts investor sentiment, it’s not good for business, it’s a deadweight on the economy which is quite obviously slowing down.
The message appears to have got through, at least partially, and Mr Xi met with Mr Biden in San Francisco in order, it seems, to create a positive vibe. It worked. There was an agreement on military communications and another to stop the flow of fentanyl-creating chemicals and equipment across the Pacific, but then one remembers the meeting in the White House with Obama a decade ago at which there was a pledge to stop the industrial espionage.
There was a declaration by the two sides of their basic positions on Taiwan, but in such a way to suggest, it seems, that probably maybe there is nothing planned to disrupt the status quo anytime soon. That comment is an extrapolation of vibe rather than of any concrete wording, but if there is one issue that makes investors nervous and wary, it is the opacity on intentions with regard to the island. Even a hint of clarity in the direction of “nothing to see here” is helpful. And that is presumably the perception he wanted to create.
It is all, in the words of a wise commentator, an effort to “slow down the slowdown.” It is buying time. Whether it is reflective of anything more fundamental than that in terms of a shift towards pragmatism and away from holding firmly to the key ideological links, only time will tell. But this meeting was at least a good sign.
So this weekend, dear readers, it is okay to sleep a little easier.