Opinion When Xi met Biden

It is tempting to either overestimate the significance or underplay the importance of the bilateral meeting between US President Joe Biden and his Chinese counterpart, Xi Jinping, in San Francisco on the sidelines of the Asia Pacific Economic Cooperation (APEC) Summit on Wednesday. The first meeting between the two leaders since the G20 Bali summit a year ago can be described as a success, given the context of the acrimonious rhetoric between the two powers in the recent past. On its part, New Delhi needs to keep a close eye on Beijing’s ties with Washington and ensure that India continues to protect and consolidate its interests vis a vis America.

The two countries have resumed military-to-military communications, which China had ended after then House Speaker Nancy Pelosi visited Taiwan last year. China agreed to crack down on the manufacture and export of Fentanyl, a deadly drug and adulterant in narcotics. The leaders reportedly also spoke about the conflict in Palestine and on the Taiwan question and the meeting also showcased other fundamental differences between the two countries. By all accounts, the US has managed to bring China to the table while giving relatively little in return — trade and military restrictions, for example, have not been withdrawn. Over the last decade or so, the US has also made strategic gains and cemented partnerships in Asia — through the Quad, AUKUS and deepening of ties with old allies like Japan. The meeting could be seen as a confidence-building measure between two powers locked in a proxy conflict.

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For New Delhi, the most pressing concern is China’s wooing of American business. Speaking to corporate leaders after he met with Biden, Xi said: “The door of China-US relations cannot be closed again now that it’s open… We need to build more bridges and pave more roads.” The statement is one of China’s many recent overtures to US and global capital, including at the Global Financial Leaders Summit in Hong Kong earlier this month. This is not surprising given that corporate America has traditionally been a champion of China. Recently, though, geopolitical tensions, unreasonable Covid restrictions and a slowing Chinese economy have dented much of that faith: In 2023, US business’s optimism about China fell to its lowest since 1999, according to the American Chamber of Commerce. It is estimated that the Indian economy could greatly benefit from a potential flight of capital and investment from China. However, Xi’s outreach shows that Beijing is willing to set aside some of its political rhetoric for the sake of business. India, then, must continue to firm up its diplomatic and strategic ties with the US, even as it does more to become a more attractive investment destination.