The Biden-Xi phone call raises an important question: Who will blink first?

The leaders of the world’s largest economies spoke on the telephone for 90 minutes on Thursday night, their first since February. Although the call made no immediate announcement, the yuan strengthened to a one-week high amid optimism that any communication could improve overall relations.

Nevertheless, post-conversation readouts showed that fundamental differences remained. The White House sought to differentiate between issues where countries can cooperate and others where they would compete, while Xi linked everything to “respecting each other’s core concerns”.

In practice, that means Biden’s expectation that China will commit to more ambitious emissions targets ahead of the COP26 summit later this year may depend on whether he agrees to Beijing’s two lists of demands. Which is officially known as “America’s Wrongdoings List”. Stop” and “List of major individual matters that concern China.”

Biden calls on Xi on US frustration with dead-end talks

Since July, Chinese officials have repeatedly mentioned the lists in official meetings and speeches. Chinese state media said the demands included the removal of all sanctions, the removal of punitive tariffs, the repeal of visa restrictions, an end to the export ban of high-tech goods and the withdrawal of Huawei Technologies Co.’s chief financial officer Meng Wanzhou’s extradition request. is included.

“The summit itself isn’t important – it’s important to see if there has been some noticeable improvement in relations over weeks and months,” said Shi Yinhong, director of Renmin University’s Center on American Studies in Beijing. “No informed observer in this world is optimistic.”

Since the last Biden-Xi call in February, the two countries have repeatedly clashed over human rights, cyber security and the investigation into the origins of the coronavirus, on which China has refused to cooperate. Beijing has also seen deteriorating relations with US allies, with Canada in Meng’s case, Australia over the Covid-19 investigation and Europe over allegations of genocide in Xinjiang.

For Biden, acceding to any request from China could prove politically difficult, even as a contingent of Wall Street veterans – including Barrick Gold Corp chairman John Thornton and Goldman Sachs – Group Inc veterans involved – push to improve relationships. . A survey released Friday by the American Chamber of Commerce in China found that three-quarters of participants complained that trade war measures were hurting their operations.

One issue that may be easiest is tariffs. The White House is still reviewing its overall China policy, which includes moving forward with nearly $300 billion in punitive duties facing Chinese imports. According to a senior administration official, the review may be concluded and its results may be unveiled in the near future.

The official said Biden’s goal was to see whether a personal engagement with Xi could take the relationship on a more serious path and help advance issues where the two sides can cooperate. The administration official said after the call that the tone between the two leaders was familiar and clear, and Biden explained that Beijing can sometimes misinterpret the intention behind US actions.

The call took place last week in response to John Kerry’s discussion on climate issues, during which Chinese officials said progress depended on an overall improvement in relations. According to the ministry, Foreign Minister Wang Yi said at the time, “China-US climate change cooperation cannot be separated from the normal atmosphere of relations. The United States should meet China halfway and get relations back on track.” affirmative action should be taken.” “

According to a US official, the Biden administration has rejected Beijing’s requests for concessions on unrelated issues when discussing climate. The official said the frustration in the White House grew when it became clear that the Chinese counterpart was reading the points of conversation and did not have the capacity to interfere on key topics.

Xi gave no indication that China’s approach would change, saying building good relations was not a “multiple choice question” but an “imperative question”. But Chinese officials offered some hope for better relations, with Xi saying ties should “get back on the right track” and touting the importance of regular communications between heads of state.

Face-to-face meetings are still expected on the sidelines of the Group of 20 in Rome in late October, although it is not clear whether Xi will leave. He has not left China since the scope of the pandemic became clear, the longest stay-at-home order of any G-20 leader.

At least some in China are optimistic that the call could lead to a more significant engagement. Zhang Monan, senior fellow at the US-Europe Institute at the government-backed China Center for International Economic Exchange in Beijing, said talks could be a “turning point” that leads to trade talks or a strategic dialogue frozen under the Trump administration. restarts. .

“The gap between the two countries and the relevant authorities has widened and how much they communicate, which just isn’t much,” Greg Gilligan, president of Amcham’s China, said in an interview with Bloomberg television on Friday. If the leaders of the two countries come together and start that process again, it will be a good thing.”