As Chinese President Xi Jinping arrived in San Francisco for the Asia-Pacific Economic Cooperation (Apec) summit, the circumstances markedly differed from his last visit to the United States.
Five years ago, Xi enjoyed a lavish reception from then-President Donald Trump, leading a China seemingly on an unstoppable ascent.
However, the economic landscape has changed significantly for China since then. While the nation once boasted a thriving economy outperforming expectations and a low unemployment rate, cracks in what Xi called his “Chinese Dream” have since widened. The post-Covid economic rebound has lost steam, with the property market, once a growth driver, now entangled in a credit crisis. This exacerbates a domestic “debt bomb” stemming from years of borrowing by local governments and state-owned enterprises.
Analysts suggest that these economic challenges render Xi Jinping in a more vulnerable negotiating position during this summit, though expectations for major breakthroughs remain low. Recent crackdowns on various economic sectors, Chinese businessmen, and even foreign nationals and firms have intensified uncertainties, prompting foreign investors and companies to redirect their investments outside China.
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Youth unemployment is on the rise, with officials no longer publishing the data, contributing to a sense of fatalistic ennui among young Chinese. Additionally, internal issues within Xi’s power structure, such as unexplained disappearances of key leadership figures, add to the complexity of China’s current situation.
Observers have drawn contrasts between China and the United States, noting the latter’s more resilient post-Covid economic recovery. While China’s economic challenges will be a crucial factor in Xi’s negotiations, there is a desire for stability in economic, trade, and investment relations with the U.S. Xi aims to secure reassurances from President Biden that the U.S. will not escalate trade tensions or tech rivalries.
The summit’s location in San Francisco, home to Silicon Valley and leading tech companies, is symbolic. Speculation arises about the announcement of a working group to discuss artificial intelligence, a potential avenue for China to dissuade the U.S. from expanding technology export restrictions.
With Taiwan’s upcoming elections, a possible flashpoint, Chinese officials are keen on discouraging U.S. support for Taiwanese independence. However, the U.S. has reiterated its backing for the self-governed island, presenting a delicate diplomatic challenge.
U.S. officials seek a resumption of military-to-military communications and Chinese cooperation in curbing the fentanyl trade. Reports suggest that China may agree to these measures, indicating potential areas of collaboration amidst broader geopolitical tensions.
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