Wooing business leaders and avoiding conflict: What’s on Xi’s agenda as the Chinese leader heads to California

Hong Kong (CNN) — Xi Jinping arrived in San Fransisco on Tuesday for a highly anticipated summit with US President Joe Biden — where the Chinese leader will likely try to bolster his country’s troubled economy and push back on perceived US efforts to suppress it.

That Xi is on his first trip to the US in six years — a four-day visit that includes his attendance at the Asia Pacific Economic Cooperation international forum — is remarkable in itself.

The leaders of the world’s top two economies have not spoken since they last met on the sidelines of another international gathering in Bali, Indonesia in November 2022.

To arrange this meeting, their governments have had to navigate a number of contentious issues: from the handling of an allegedly rogue Chinese surveillance balloon to Beijing’s targeting of international businesses, and tit-for-tat restrictions over high tech.

Expectations for major breakthroughs at Wednesday’s meeting are low.

Xi is heading into the summit as he struggles to revive a faltering Chinese economy yet to fully rebound after his strict pandemic controls were relaxed, with the property market in crisis and record youth unemployment.

The economic woes, combined with the unexplained removal of two hand-picked officials at the top of his government, have tarnished the image that Xi projected the last time he met Biden, when he’d just consolidated power and started a norm-shattering third term leading China.

Biden, meanwhile, finds himself strapped with international challenges from the war in Ukraine to the latest conflict in Gaza. Another global flashpoint involving China is the last thing he would want to see, especially as he vies for re-election next year.

“At a time that they both face domestic challenges and foreign policy challenges, there’s less incentive for them to try to go after each other and a bit more incentive for them to stabilize their relationship,” said Yun Sun, director of the China Program at the Stimson Center think tank in Washington.

Xi’s agenda

Despite the challenges he faces at home, the insulated Chinese leader may see himself in a stronger position relative to Biden. Beijing views the US as plagued by deep political polarization and on the decline globally.

“Xi thinks the US wanted to improve the relationship with China and he responded. They sent those delegations to him … (after he) put pressure on the US government,” said Suisheng Zhao, director of the Center for China-US Cooperation at the University of Denver, referring to visits from American officials to Beijing over recent months.

Beijing believes the US is the one that “should make a correction” in its attitude toward China. In its eyes, if “you are coming to us and talking to us, then you should (move in) our direction,” he said.

One issue at the top of Xi’s list, analysts say, is the US push to diversify supply chains to reduce reliance on Chinese manufacturing, an economic engine, and its efforts to restrict China’s access to the types of advanced American technology vital to the country’s high-tech industries and modernization of its military.

Beijing sees these efforts, which include restrictions on the sale of advanced chips to China and bans on some US tech investments in China, as blatant actions to suppress its rise — not the narrow, targeted national security measures the Biden administration claims them to be.

Chinese officials have hit back with their own controls on natural materials used to make tech products.

Xi will ask Biden to clarify and define the scope of the US approach on tech restrictions, analysts say.

He is also likely to push Biden for assurances on American policy toward Taiwan, the self-governing democracy that China’s ruling Communist Party claims and has vowed to unite with.

The US has ramped up support for the island in recent years amid increasing aggression from China. The issue is becoming only more acute ahead of an impending presidential election in January, in which Beijing hopes to see Taiwan’s Democracy Progressive Party (DPP), which opposes closer ties with China, lose power.

“(Beijing) knows the election is coming. They are telling America in every single way possible that this is a redline issue, don’t touch it, and you better reign in the DPP candidate so that he doesn’t trigger a war we have to fight,” said Stimson Center’s Sun.

The trip to California will also be an opportunity for Xi to pitch American businesspeople on the idea that China remains a place of opportunity and is committed to the pro-business reforms that have driven its meteoric rise in recent decades.

Xi is expected to underscore that point during an address to American industry leaders at a dinner this week, though Beijing has yet to confirm the appearance.

Business confidence in China has cratered in recent years following the strict pandemic controls and as Xi ramped up state control over the economy and expanded an already vague and far-reaching anti-espionage law. A slew of raids and detentions affecting international companies have increased concerns from Western firms about the risks of doing business there.

‘Positive signals’

The lead-up to Xi’s American visit has been marked with signals that China is hoping to smooth prickly relations.

In recent weeks, China has hosted elderly American members of the “Flying Tigers,” a group of fighter pilots and servicemen who helped China fight the Japanese during World War II, for a commemorative ceremony in Beijing. The event and the group’s subsequent tour around China was widely covered by state media.

The pages of party mouthpiece People’s Daily also included pieces calling for better ties. One editorial, written under the pen name Zhong Sheng, which is reserved for important foreign policy pronouncements, praised the “huge potential for cooperation between the two countries.”

The turn-around from the usual anti-US rhetoric has been so swift that some Chinese social media users have taken note, prompting wisecracks on platforms with one user writing: “Ok, will stop hating the US for now, and wait for further notice.”

Chinese public sentiment toward the US appears to have softened in recent months too, according to monthly surveys conducted by business insight firm Morning Consult. From April to October, the share of Chinese adults who view the US as an “enemy or unfriendly” fell 9 percentage points to 48%, the survey found.

Meanwhile, the visit from four cabinet-level US officials to Beijing over the summer has already sparked further lower-level talks and reciprocal trips, in a significant step forward toward restoring lines of communication slashed by Beijing in protest of then-House Speaker Nancy Pelosi’s 2022 visit to Taiwan.

‘Unfeasible in practice’

But when it comes to whether any of those talks, and the summit between Biden and Xi, will result in concessions on the core issues that drive tensions between the US and China — like Taiwan, Beijing’s claims in the disputed South China Sea or efforts from both sides in the name of protecting national security — analysts are skeptical.

“Although both China and the United States hope to prevent their competition and confrontation from drastic deterioration … and both sides attach great importance to preventing military conflicts with each other, none of them is prepared to grant any significant and lasting concessions,” said Shi Yinhong, an international relations professor at China’s Renmin University.

Even on international issues, where both have a stake in ensuring global stability, it’s unclear how much coordination there can be.

After nearly two years of war in Ukraine, the US appears to have little hope left that Beijing will pressure close partner Russia to end its invasion.

When it comes to the latest conflict in Gaza, even if Biden asks China to help pressure its trade partner Iran to not get involved, coordination could be “unfeasible in practice,” according to Shi.

China also remains wary of sharpening American rhetoric during the upcoming US elections, when both Republicans and Democrats may want to appear tough on China to appeal to voters.

All this means that while China and the US are likely to resume positive interactions following the meeting, their ties will remain fragile, analysts say.

Those interactions won’t “solve the fundamental conflict of national interests between the two,” said Sun in Washington. “So, the question people will ask is, how genuine and how sustainable is this?”

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CNN’s Nectar Gan and Marc Stewart contributed reporting.