As business leaders and policy makers gather in Singapore for the three-day Bloomberg New Economy Forum, political tension between the United States and China hangs in the air.
While agreements on the surface seem to aim at a cordial coexistence, conflicts in regional policy considerations remain a concern.
Before the forum, US President Joe Biden and Chinese President Xi Jinping held their first virtual summit on Monday. The candid conservation that lasted for over three hours was a tentative effort by both parties to get off on the right foot.
Although Beijing remarked that the meeting had been effective in enhancing mutual understanding, Xi also warned Washington about increasing its country’s involvement in Taiwan.
Tensions About Taiwan
As China ramped up military displays in Taiwan airspace over the past weeks, Xi noted that “whoever plays with fire will get burnt” in the Taiwan territorial dispute.
In a statement issued by the White House, Biden reiterated US commitment to the one-China policy stating that it was strongly opposed to efforts to “change the status quo or undermine peace and stability across the Taiwan Strait”.
Meanwhile, political parties in the US continue to call for a firmer response to China, noting that Biden cannot be seen to be “going soft” before next year’s midterm elections.
A 539-page report by the US-China Economic and Security Review Commission in Washington stated that the US faces a progressively “triumphalist” and “aggressive” China and urged the government to take steps to strengthen its ability to fend off Chinese attacks on Taiwan.
The bipartisan panel further advised the US government to bolster US bases in the Indo-Pacific region and to authorize the deployment of anti-ship and ballistic missiles to bolster military deterrence against an attack on Taiwan.
Business As Usual
While China maintained a hardline stance with regards to Taiwan, it took a more conciliatory tone in matters of economic growth.
Chinese Vice President Wang Qishan remarked during the forum that “China cannot develop in isolation of the world and nor can the world develop without China,” and that the country welcomed foreign investment.
This willingness from China to engage in matters of the economy is good news for the US.
In 2018, former US Treasury Secretary Hank Paulson warned that the partial decoupling between the US and Chinese economies would “make the United States, China and the world more susceptible to financial crises.”
In a speech on the second day of the forum, Paulson said that without a stable relationship between Washington and Beijing, the world is headed for a “very dangerous place” and called for more certainty around how the world’s biggest economies are going to compete, cooperate, and manage conflict.
Despite friction regarding Taiwan and movement into the Indo-Pacific, it appears that US-China relations are warming, albeit cautiously.
Former U.S. Secretary of State Henry Kissinger has stated that while the talks were a good beginning for the economic superpowers to avoid conflict, there needs to be “concrete discussions that lead in a direction both presidents have affirmed they want to pursue.”
Meanwhile, Wall Street waits with bated breath for both governments to settle the stalemate over regulatory scrutiny as investors look to Chinese company listings.
US-China relations are critical to the stability of the global economy. With hope, the two countries can maintain peaceful coexistence and engage in mutually beneficial cooperation.