The rest of the world suffers when Washington and Beijing are entangled in geopolitical and geoeconomic battles. And when they hold top-level summits and conversations, as Biden and Xi did this week during a comprehensive phone call, the rest of the world pays attention.

In the phone call, discussion on key issues like Taiwan, artificial intelligence, security, export controls, the situation on the Korean Peninsula, artificial intelligence, and conflicts in Europe and the Middle East is a positive signal demonstrating a return to regular leader-to-leader dialogue between the two countries. The conversation is being described as candid and constructive.

Even though expectations for a full normalization of relations are low, both Biden and Xi are looking to bring greater stability to a relationship that is being defined by differences rather than convergences.

The resumption of regular leader interaction will definitely lead to some forward movement in managing their relations in a fast-changing world fraught with tensions, disagreements, and conflicts. A fragile global economy is at stake as the U.S. and China seek to cool tensions.

The timing of the call is also significant, as China believes there is more opportunity to work with Biden. Biden faces a rematch with Trump, who has cast China as an arch-enemy. Biden has preserved or accelerated some of Trump’s tough measures but has also identified areas of common interest, such as fighting climate change and sustainable development.

The leaders of the world’s two biggest economies have managed to maintain a veneer of diplomatic stability despite deep mutual suspicion between their countries, and as their governments pursue export controls, sanctions, and tariffs. At the same time, they have sought common ground on issues including risks posed by artificial Intelligence. This call was the leaders’ first conversation since their November 2023 summit on the sidelines of the APEC summit in San Francisco.

The U.S. and China have clear objectives to achieve after what was a fractious 2023 for their bilateral relations. The U.S. is focused on managing the countries’ increasingly fierce economic competition and keeping open lines of communication to prevent direct conflict between the two powers. It cannot afford to decouple from China. A full separation of the two economies would be economically disastrous for both and the world. The only alternative would be to have a healthy economic relationship with China that benefits both countries in the long term.

The U.S. is determined to see the re-establishment of military-to-military ties with China because it believes it’s in the U.S. national security interest. Military-to-military communications largely ceased after then-House Speaker Nancy Pelosi visited Taiwan in August 2022. Taiwan, a self-governed island of 23 million people, is an integral part of Chinese territory and it is determined to unify with it, by force if necessary. Biden, in the call, emphasized the importance of maintaining peace and stability across the Taiwan Strait, and the rule of law and freedom of navigation in the South China Sea,

China will not compromise on the one-China policy as Taiwan is of strategic importance to China’s security and territorial sovereignty. Washington recognized Beijing as the government of China and did not have diplomatic relations with Taiwan.

But its constant contact with Taiwan, arming the Island with the latest defense equipment, and its constant efforts to incite political unrest to encourage Taiwan towards revolt is seen by China as an attempt to make the island’s decades-old de facto independence permanent. Last year, Xi told Biden that the Taiwan question was “at the core of China’s core interests, the bedrock of the political foundation of China-U.S. relations, and the first red line that must not be crossed in China-U.S. relations.”

While discussing the global geopolitical situation. Biden reportedly raised concerns over China’s support for Russia’s defense industrial base and its impact on European and transatlantic security. He also emphasized Washington’s “enduring commitment” to the complete denuclearization of the Korean Peninsula. The U.S. also expects China to use its growing influence on Iran to make clear that Tehran or its proxies should not take action that could lead to the expansion of the Israel-Hamas war. Biden’s administration believes that China, a big buyer of Iranian oil, has considerable leverage with Iran, which is perceived as a major backer of Hamas.

With the U.S. presidential election this year, Biden also wants firm reassurances that China will not interfere in the US through disinformation and sowing discord that might influence election results at the local level, especially in districts with large numbers of Chinese American voters.

On the other hand, China would like the U.S. reassurance that the American president will not support Taiwan’s independence, will not start a new cold war, and will not suppress China’s economic growth, particularly by imposing export controls on semiconductor chips not to wage an economic war with Beijing amid continuing signs that China’s economy is struggling to recover from the economic disruptions of the pandemic.

Beijing has continuously demanded rollbacks in tariffs and sanctions. But now, it is seeking assurance from Biden that the U.S. will not impose any new import restrictions on China. According to reports, Xi warned Biden that the U.S. was “not de-risking but creating risks” by suppressing China’s trade and technology development and adding new entities to U.S. sanctions lists.

Undoubtedly, if the United States insists on suppressing China’s high-tech development and depriving China of its legitimate right to development, China will react accordingly.

According to the Chinese readout of the latest telephone call, Xi told Biden that strategic awareness “must always be the first ‘button’ to be fastened” in bilateral ties. Xi also elaborated on issues concerning Hong Kong, human rights, and the South China Sea.

A senior US administration official told reporters that the phone conversation does not represent a change in U.S. policy toward China, and competition remains a key feature. It is also important to remember that after the November 2023 California summit, Biden said the two would “keep the lines of communication open,” but maintained criticism of his Chinese counterpart, telling reporters he still considers Xi a “dictator” and would operate under a “trust but verify” strategy when it comes to his dealings with China.

The U.S.-China rivalry should not turn from competition to confrontation. U.S. believes that China needs to be contained and its global influence countered through a range of political and business protective measures that include activities that the U.S. believes can inhibit, reduce, retard, and slow down China’s growing influence. The growing fear of China’s phenomenal rise and the imminent possibility of China emerging as the most powerful state in the world economically, politically, and strategically resulted in the passage of the notorious China Containment Bill by the U.S.A. in 2022 and then declaring China as a threat in its National Security Strategy and other documents. These measures also manifest the desire of the U.S. to have an enemy to fight against continuously. When there is none, they ensure one is created, in this case, China.

China’s response to Taiwan’s presidential inauguration in May after the recently held elections will test the stability of relations between Beijing and Washington. Taiwan’s current Vice President Lai Ching-te, whom Beijing views as a separatist, won the presidency and Beijing has increased pressure on Taiwan ahead of his swearing-in. It is, however, encouraging to see that both US Treasury Secretary Yellen and Secretary of State Blinken will visit China in the coming weeks.

There is no substitute for regular communication at the senior leadership level to manage this complex and often tense bilateral relationship effectively. The leaders of the world’s two biggest economies have managed to maintain a veneer of diplomatic stability despite deep mutual suspicion between their countries, and as their governments pursue export controls, sanctions, and tariffs. At the same time, they have sought common ground on issues including risks posed by artificial.

At the Bali U.S.-China summit, Xi told Biden that their bilateral relations should be defined by dialogue and win-win cooperation, not confrontation and zero-sum competition. That was a rejoinder to the Biden administration’s mantra that the two nations should compete vigorously without looking for conflict.

In order to stabilize the relationship, the two powers need to return to what was agreed upon between the two presidents in Bali and truly act on it.

Any military conflict between the U.S. and China would be disastrous as China is now almost at par with the U.S. and is a far more formidable military adversary than before. It is also a fact that such a confrontation would throw up challenges for countries that are already situated in turbulent regions and are desirous of maintaining good and stable relations with both the U.S. and China. Therefore, in the interest of humanity, both sides must avoid such a devastating conflict. Maintenance of peace and security is the collective responsibility of all parties.

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