President Joe Biden and China’s leader Xi Jinping met this week on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco. The Biden administration touted the meeting as a significant foreign policy achievement, even though it accomplished little but photo ops.
Leading up to the APEC meeting, Xi had a weak hand, while the leverage was on the U.S. side. China’s economic growth has slowed down significantly. Its once high-flying property sector crashed and exports dropped. The youth unemployment rate reached 22 percent in June 2023 before Beijing stopped publishing the data altogether out of fear of causing public panic. Foreign firms have pulled billions out of China, concerned over its weak economy, hostile regulatory environment, and geopolitical tensions with the U.S. China risks prolonged economic stagnation as consumers are unwilling to spend money due to financial and political uncertainty.
In contrast, the U.S. economy grew almost 5 percent in the third quarter despite facing its own challenges, such as inflation and ballooning national debt. Since China needs American companies’ investments and technologies to revive its weak economy, Biden could have waited for Xi to plead for a summit and used it as leverage to demand some behavioral changes from China. Preconditions could have been that China’s military stops its harassment of Taiwan and the Philippines in the South China Sea, or no more funding Russia and Iran’s geopolitical aggressions by purchasing their oil.
Sadly, Biden and his foreign policy team are known to turn U.S. leverage into weakness by focusing on the wrong priorities.
