Why Xi Was All Smiles With Biden

The Western press rarely shows China’s leader, Xi Jinping, smiling broadly or laughing, seeming to prefer photos of him that project a stern, even dour demeanor. Yet last week, Western media coverage of Xi’s face-to-face meeting with U.S. President Joe Biden in Woodside, California, near San Francisco, featured image after image of a jovial Xi cheerily waving as he strolled along a garden path with Biden or smiling warmly as he gripped Biden’s hand on the red carpet.

The lingering question is: Why the change?

Was it, as some coverage portrayed it, that the United States suddenly had the upper hand in the ongoing contest between the leading powers after years of trailing growth, leaving Xi softened or humbled? Or was it, relatedly, that Xi had become so alarmed by the post-pandemic stall-out of the Chinese economy that he felt obliged to show up in California as a lightly disguised supplicant in bad need of foreign investment?

Neither of these explanations is especially persuasive. In terms of economics, the relative fates of superpowers rarely hinge on trends that can be measured in as few years as the brief period in which China’s economy has begun to lag. The idea that Xi came to California hat in hand, looking for China’s enormous economy to be bailed out or revived by a new burst of Western investment is also belied by the facts. Xi abstained from making direct appeals for investment, and he made no public concessions to the foreign business types who have begun to complain about the increasingly difficult operating environment they have faced in China, from politically targeted audits and the arbitrary detention of executives to the ongoing theft of intellectual property.

It is more likely that diplomatic rather than economic motives underlie Xi’s new style. Under his leadership, Beijing has pursued a foreign policy in several parts of the world of jutting jaws and squared shoulders, often speaking bluntly and in a patronizing tone toward other countries. And while this seems to have paid off for a while at home, making some audiences there swell with pride that their country had become a power to be reckoned with, over time it has produced sharply negative returns.

Even with the United States experiencing big stumbles of its own—such as a badly botched withdrawal from Afghanistan, a war that looks increasingly stalemated in Ukraine, an increasingly incoherent populist right-wing Republican Party, a dysfunctional Congress, and great looming uncertainty over the next presidential election, which will pit an unprecedentedly old Biden against an unhinged (and almost as old) Donald Trump—Xi’s China has been steadily losing diplomatic ground due to its assertive approach.

This can be seen in numerous parts of the world, but it is clearest in China’s own neighborhood, where it matters most to Beijing. There, countries as disparate and far-flung as the Philippines, India, Australia, and Vietnam have been firming up their ties with the United States as a hedge against pushiness from China.

I shared my own theory about Chinese assertiveness under Xi in a book I wrote about China’s conceptions of itself as a global power over a span of many centuries. In it, I explained that since the late 19th century, the preoccupation of Chinese elites and much of China’s state behavior have been wrapped up in recovering a position that the country takes—not unreasonably, given its large population size and long and distinguished history—as its natural and deserved place at the center of world affairs. During his first 10 years in power, Xi was no different; only his tactics marked a departure from the recent past.

I assessed that Xi had become persuaded that China had a limited window of opportunity to cement strong gains in power relative to the rest of the world—and especially the United States. The chief reason for this was that even a decade ago, it had become widely understood that China was set to experience an enormous and globally unprecedented wave of aging and population decline and that a shift in demographic fundamentals as profound as this would impose huge costs on the state—in lost labor and output as well as in the huge new outlays of capital that would be required to take care of older adults and the chronically ill amid a stark dearth of young people.

For Xi, this meant that China had to move fast and with ambition and focus to improve its position in the world and lock in those gains. This helps explain the enormous Belt and Road Initiative that Xi rolled out shortly after taking power. It helps explain the large increases China has made in armaments, and especially in costly naval and ballistic power, during this period. And it explains China’s assertiveness in the East and South China Seas of the far-western Pacific as well as the feeling that Taiwan has increasingly had during this time of wearing a bull’s-eye on its back.

Unfortunately for Xi, who has removed formal limits on the length of time he can serve as leader but who still faces human limits like anyone else, the trends that are most important to China’s medium- and longer-term prospects have dramatically worsened over this time. And even for a leader famously averse to changing course, this has begun to render a policy of sharp elbows prohibitively costly.

According to one Chinese demographic expert, the country’s overall population declined by 850,000 people in 2022 and will continue to shrink strongly until 2097. Despite an aggressive recent reversal of the country’s infamous one-child policy and official encouragement to women to have more babies, China’s fertility rate has seen a continuation or even acceleration of the decline in the average number of babies born per woman. According to official statistics, a new record low was reached in 2022, with 1.09 children per woman on average. Demographers say that 2.1 children per woman is the number needed to simply maintain a steady population size.

China’s population accounted for 22 percent of the global total in 1980. By 2020, the percentage had fallen to 18. And according to the United Nations’ median projections, that number will stand at only 14 percent by 2050, with more continued decline in sight. In 2050, people over 65 will account for 30 percent of the population, or more than twice the present level. This will render guns-versus-butter choices for China excruciating, including making recruitment and staffing for the world’s largest armed forces in terms of manpower much more difficult and expensive.

There may be no reason thus far to believe that Xi has fundamentally altered his views about the Chinese economy, which have strongly favored state corporations over private enterprise, both domestic and foreign. There are, however, increasingly strong reasons to believe that after years of strengthening, China’s overall position in the global economy is under severe pressure and may even decline.

In one of the most sobering recent assessments of China’s prospects by a prominent economist, Ruchir Sharma wrote in the Financial Times that China’s economy is set to decline this year in nominal terms. Over the last three decades, China has usually been a leader in driving the growth of the world economy. Its share of global output rose nearly tenfold between 1990 and 2021. Using China’s own data, though, Sharma wrote that in 2023, China will account for none of the world’s economic growth. The United States alone, he said, will generate 45 percent of the $8 trillion of expected expansion in the global GDP. India, Indonesia, Mexico, Brazil, and Poland will supply almost all the rest. “That is a striking sign of possible power shifts to come,” Sharma wrote.

Xi did not come to the United States humbled by any of these realities, and China’s medium- to longer-term objectives as a world power have not turned in some new direction on a dime. China’s daunting recent fundamentals are sobering enough, though, that even this man, one of the most willful leaders the world has seen in decades, is having to take stock.