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Xi Jinping arrives in the United States as his Chinese Dream falters.

When Xi Jinping stepped off his plane in San Francisco for the Apec summit, it was in circumstances very different to the last time he landed on American soil.

Mr. Xi was in command of a China that was still on the rise five years ago, when he was wined and dined by Donald Trump at Mar-a-Lago.

It had a thriving economy that outperformed projections. It had one of the lowest jobless rates in years. Mr Xi proudly pointed to China’s “flourishing” growth model as something other countries should imitate while solidifying his power for a second term.

Cracks were already forming in his “Chinese Dream” by then. They’ve just gotten wider since then.

According to one viewpoint, Mr. Xi is in a more vulnerable negotiating position this time, albeit big breakthroughs are unlikely.
Following an initial rebound, the post-Covid Chinese economy has slowed. Its housing sector, which was once a vital generator of prosperity, is now trapped in a credit crisis, worsening a domestic “debt bomb” created by years of borrowing by local governments and state-owned firms. Many of these concerns could be ascribed to China’s long-anticipated structural downturn finally manifesting itself – brutally.

Crackdowns on numerous sectors of the economy, as well as notable Chinese businesses, have created uncertainty in the last two years. These have recently been expanded to encompass foreign nationals and businesses, raising concerns in the international business community. Foreign investors and corporations are now exiting China in quest of greater investment returns overseas.

Youth unemployment has risen to the point where officials no longer publicize the figures. A fatalistic boredom is increasing among young Chinese, who discuss “lying flat” or fleeing the nation for better opportunities elsewhere.

Mr. Xi is also dealing with problems inside his carefully crafted power structure. The mysterious disappearances of key members of his leadership team and military top brass could be seen as evidence of widespread corruption or political purges.

Some analysts have compared China to the United States, whose economy has fared better in the post-Covid recovery. Americans may have worried the day China will overtake them as the world’s greatest economy until recently, but analysts increasingly doubt this will happen.

According to Li Mingjiang, an associate professor at Singapore’s S Rajaratnam School of International Studies, China’s current economic challenges will be a “important factor” in Mr Xi’s negotiations and “would lead to a stronger desire to stabilize the economic, trade, and investment relations with the US.”

“Mr Xi will want to receive reassurance from Joe Biden that the US will not expand its trade war or tech rivalry, nor take additional measures to decouple economically.” Beijing has slammed the United States for slapping duties on Chinese imports, blacklisting Chinese companies, and limiting China’s access to key chip-making technology.

The fact that they will be meeting in San Francisco, home of Silicon Valley and the world’s greatest technology businesses, will not go unnoticed by the two leaders. There is speculation that they will form a working group to study artificial intelligence, which the Chinese aim to use to persuade the Americans not to further restrict US technology exports.
With Taiwan’s election approaching, which has the potential to become a flashpoint, Chinese officials have made it clear that they do not want the US to support Taiwanese independence. However, in the face of Chinese aggressiveness and accusations, the US has frequently stated its support for the self-governed island. Taiwan remains a perilous balancing act for both countries.

US officials are also requesting a restart of military-to-military communications and Chinese cooperation in blocking the flow of chemicals fueling the US fentanyl trade, and there are already rumors that the Chinese will acquiesce to these demands.

The Chinese official media has paused its US-bashing, publishing a slew of editorials extolling the virtues of repairing relations and focusing on cooperation.

There has been talk about “returning from Bali and flying to San Francisco.” This is a reference to the last time Mr. Xi and Mr. Biden met in person, almost precisely a year ago at the G20 Bali meeting, which marked a high point in recent US-China ties before plummeting to the depths of the spy balloon episode.

“The promotional preparations for this week’s Xi-Biden meeting make it apparent that it is alright to like America and Americans again… “I think you could argue that the propaganda 180 makes Xi appear to be quite eager for a stabilized relationship due to at least economic, if not also political, pressures,” China analyst Bill Bishop wrote this week.

Mr. Xi looks to be equally, if not more, eager to court the US corporate community.
According to the BBC, he will be the honored guest at a ritzy dinner on Wednesday night organized just for him to meet senior corporate executives. According to the Wall Street Journal, Chinese officials initially wanted the dinner take place before Mr. Xi’s meeting with Mr. Biden, which could be a hint of his true priorities.

However, Americans should not expect Mr. Xi to arrive with hat in hand and eager to please.

Many predict that mutual suspicion will persist, and that the two presidents will not eliminate current trade and economic barriers erected in the name of national security.

Mr. Biden has kept several Trump-era penalties on China while beginning and then expanding the chip tech ban. Meanwhile, Mr. Xi has implemented a broad anti-espionage law, which has resulted in searches on international consulting firms and reportedly used exit bans on foreign nationals.

The two sides are also unlikely to budge on “core interest” issues such as Taiwan and the South China Sea, where Beijing maintains a military presence to preserve sovereignty while Washington does the same to strengthen its regional relationships.

Faced with the imperative of “not appearing weak” to the US, As Dr. Li puts it, “it’s a difficult balance that the Chinese leadership has to strike – between the objective of seeking a more stable and positive relationship with US on one hand, and also appear to be strong and resilient against some of the American pressures.”


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