Why Xi Thinks He Got the Better of Biden

After their successful meeting in San Francisco earlier this month, U.S. President Joe Biden and Chinese President Xi Jinping must now contemplate their geopolitical objectives for 2024. The coming year promises to be complex and turbulent, bookended by elections in Taiwan in January and the United States in November. At their meeting, the two leaders hammered out a low-level truce to halt the slide in bilateral relations—at least for now.

In Washington, many observers are convinced Biden has more reasons to be pleased than Xi: The U.S. side won commitments on issues such as restrictions on Chinese fentanyl exports and the re-opening of previously shuttered military-to-military talks. Xi, by contrast, seemed to have arrived weakened by China’s domestic problems and poor economic outlook. At first glance, Beijing won little in the way of concessions.

But if the United States did so well out of the summit, why was China so happy?

That Beijing was pleased should be clear from how Chinese media covered the meeting. State-controlled outlets trumpeted a new “San Francisco vision.” The summit was “strategically significant and far-reaching” and left “a unique and profound mark in the history of China-U.S. relations,” as the Global Times put it. Even if fawning media coverage of Xi and his efforts is the usual procedure in China, the underlying truth is that Beijing feels it achieved a strategic success. That Washington thinks otherwise could prove to be a risky misunderstanding.

China had three main objectives at the meeting, all of which it achieved. First was the simple fact of the summit itself. This provided a stage on which domestic and international audiences could view Xi as a global leader on par with Biden. As the rising and still less powerful nation, it matters to China to be seen as the United States’ peer.

The second, more important issue was Taiwan. China is nervous about Taiwan’s national elections in January, where polls suggest that the most likely outcome is a victory for the ruling Democratic Progressive Party, which has frosty relations with Beijing. Xi is also likely alarmed by Biden’s repeated statements that the U.S. military would come to Taiwan’s defense if China decides to invade. For Xi, reinforcing China’s red lines on Taiwan to Biden face-to-face was therefore a central objective. And while Biden ruffled Chinese feathers in San Francisco by calling Xi a dictator, he crucially did not repeat his promise to defend Taiwan. Beijing, which never rules out the option of invading the island if it refuses to “reunify” voluntarily, will have been pleased by what it is likely to view as Biden’s backing down.

The third successful result for Beijing is that defusing tensions with Washington will give it more room to maneuver in the South China Sea and elsewhere around the region, by at least temporarily slowing down the rebalancing that has seen many countries across the Indo-Pacific inch closer to each other and the United States.

In recent years, Washington has pursued a successful allies-and-partners strategy to ratchet up pressure on Beijing. Xi has complained about “containment, encirclement, and suppression,” a good indication that Washington’s plan to isolate China was working. The decision of countries like the Philippines to move closer to the United States is in large part a response to repeated aggressive behavior from China. Yet these allies and partners rarely want a worse relationship with China than the United States itself is willing to bear. Already, Australia has moved to reset ties following the visit of Prime Minister Anthony Albanese to Beijing earlier this month. China will soon hold a summit meeting with Japan and South Korea, potentially calming things in northeast Asia, too.

For Beijing, a temporary truce with Washington therefore provides the strategic benefit of reducing pressure across much of the rest of the region. This will allow it to focus on other objectives next year. This will include continuing to put pressure on the Philippines in the South China Sea, for instance, following recent clashes over Second Thomas Shoal. It will also include pushing for Chinese membership in the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade pact, a move that some existing members, like Australia and Japan, have previously wanted to avoid. More generally, China will seek to expand the influence of its own plans to develop deeper bilateral ties around Asia, including by expanding its Global Security Initiative and other mechanisms.

Seen next to his successes, Xi likely cared less about the economic dimensions of the U.S.-Chinese relationship than Western observers seemed to think. China’s struggling economy made it appear as if Xi somehow had to come, cap in hand, to seek U.S. investment. Yet this makes little sense: A few new deals with U.S. blue chips for foreign direct investment, if they ever occur, will hardly be material to China’s future. Indeed, Xi has been preparing for a world in which the United States invests much less in China. Rather, Xi’s main aim is to stop and reverse damaging embargoes that limit China’s access to advanced Western technology—and enlisting corporate America to pressure Washington to achieve this end. This also explains why Beijing backed vague new “government talks” on artificial intelligence, which it also hopes might stave off more restrictions on its ability to acquire the semiconductors needed to run big AI models.

Restarting military-to-military talks, which China shut down after then-House Speaker Nancy Pelosi’s visit to Taiwan last year, was more of a concession to the United States. Biden’s team wanted to reopen the communications channel, in part to manage possible accidents in the South China Sea or elsewhere. China’s view is that such de-escalation mechanisms could give legitimacy to U.S. military activities in what Beijing considers its exclusive sphere of influence. But ultimately, Beijing decided that there was little harm in restarting such contacts, which are unlikely to constrain China’s assertive behavior. Only days after the summit, the Australian government asserted that a Chinese warship had injured several Australian divers with sonar pulses inside Japan’s exclusive economic zone. In an actual crisis, low-level hotlines and working groups are unlikely to be much use. Without being too cynical about it, one benefit of reopening these channels for China is that Beijing can easily cancel them again whenever it needs to signal displeasure at Washington.

With both sides pleased by the summit, it is of course possible that San Francisco provided a rare win-win outcome, to use the hackneyed diplomat-speak employed by China’s leaders. More likely, the satisfaction on both sides reflects different objectives and negotiating strategies. Back in 2019, before Kurt Campbell and Jake Sullivan became Biden’s Asia tsar and national security advisor, respectively, the two co-authored an essay on managing China. The United States, they argued, is often mistaken when it thinks China will respond to friendly overtures. Instead, a wise strategy would “lead with competition” to build leverage and extract concessions. This is just what the Biden administration has done. It has pressured China by working closely with its friends around the region. Chinese concessions, such as re-opened military communication channels and fentanyl working groups, are the result.

China is playing a different game. It wants to be seen as an equal great power. It wants to keep its options open on reunifying with Taiwan—by military force if necessary. And it wants an unimpeded sphere of influence in its neighborhood. On this front, the San Francisco summit delivered. China did not concede anything that really matters. It bought time and breathing space, allowing it to pursue its regional objectives while the U.S. is distracted by its election next year.

Yet the fundamental regional challenge remains. As Samir Saran of the Observer Research Foundation in New Delhi put it at a recent conference, China seeks a multipolar world order—but a unipolar East Asia. The United States wants the opposite: It seeks to sustain its global unipolar position while ensuring East Asia remains multipolar. Deals like those struck in San Francisco can calm Sino-U.S. relations temporarily. Just don’t bet on them lasting.