Key Outcomes of the Biden and Xi Jinping Meeting

President Joe Biden and Chinese leader Xi Jinping recently reached an agreement to resume military-to-military communications during their meeting at the Asia-Pacific Economic Cooperation (APEC) Summit. The resumption of military communication between the two countries marks a significant development in their bilateral relations, with potential implications for global security and geopolitical dynamics.

One of the key agreements reached during the meeting between President Biden and Xi Jinping was the resumption of military communication between the United States and China. This decision signifies a willingness to engage in dialogue and enhance communication channels between the two nations, particularly in the realm of defense and security matters.

Additionally, the leaders discussed concerns related to fentanyl, AI, climate change and other trade issues, indicating a broad range of topics addressed during their diplomatic engagement. Furthermore, the involvement of Taiwan was also part of the discussion, highlighting the complex nature of the issues under deliberation.

Our Take:

Overall a positive development that will reduce the tension between the two powers. However, we still think that corporations will be cautious since the geopolitical risk between the US and China still remains in spite of the positive rhetoric coming out of the meeting.

While the resumption of military communication is a good development, there is still distrust between the two sides. A case in point is the US and Phillipines deeping defense agreement before the APEC summit.

Stock specific risk has gone down for companies such as Apple etc. The economic poor performance of China puts pressure on Xi to improve ties with the US and the west. For the European Union and specifically countries like Germany, that rely on trade with China to a much greater extent than the US.

The meeting between Xi and business leaders has two purposes. First, he hopes to improve the investment climate to spur renewed interest in foreign direct investment into China. Second, the US business community is useful in the sense that they can put preassure on any US government in future trade spats between the two countries.

What Significance Does this Agreement Hold for US-China Relations?

The agreement to resume military communication between Biden and Xi Jinping carries implications for US-China relations. The resumption of such communication channels presents the potential for de-escalation of tensions between the two countries. This decision can also have a positive impact on economic and trade relations, as it signals a commitment to maintaining constructive engagement and dialogue. Furthermore, the agreement opens the possibility of future summits and meetings, which can further contribute to the progress of bilateral relations and address shared challenges.

How Can the Resumption of Military Communication Benefit Global Security?

The resumption of military communication between the US and China holds the potential to benefit global security in several ways. By promoting diplomatic solutions to international conflicts, the agreement contributes to a more stable and secure international environment. Moreover, enhanced crisis management capabilities through improved communication channels can facilitate swift and coordinated responses to potential security threats. Additionally, the resumption of military communication can help prevent misunderstandings and miscalculations, thereby reducing the risk of unintended escalations in tensions and conflicts.