China watchers were fixated on the bilateral meeting between U.S. and Chinese presidents Joe Biden and Xi Jinping last week.
The leaders did manage to find some common ground, reestablishing military-to-military dialogues and agreeing to narcotics control and AI systems safety. But there was a sense of disappointment that little progress was made on other key issues, including Ukraine, Israel-Hamas, Taiwan and long-standing concerns among U.S. firms about fair access to the China market.
In the U.S: The summit's achievements will not be enough to appease critics who argue the Administration is making too many concessions for little in return. And it is unlikely to substantially change the key points of tension in the relationship.
In China: Official coverage focused on President Xi Jinping’s central message that he seeks “peaceful coexistence” between China and the U.S., reflecting China’s desire to be seen by the global community as a responsible diplomatic player. But hawkish foreign policy observers were quick to remind their audiences that the U.S. still cannot be fully trusted – which may reflect why China was less willing to offer big incentives.
In the corporate world: The fact that a face-to-face Xi-Biden meeting happened at all is a welcome sign for the business community. But the climate for cross-border U.S.-China business has changed permanently for the worse over the last several years. But most multinationals will not withdraw from China, nor will Chinese companies give up their global ambitions, which still include the U.S. There is still willingness to find a way to do business, despite regulatory barriers. And most don’t want to ally themselves with only one country. These days, that means more than just positioning – spinoffs, splits, joint ventures, divestments, greenfield investing, and re-domiciling are among the new cross-border strategies and options, as well as a thick skin, strong resolve and flexibility.
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