For more crisp and insightful business and economic news, subscribe to
The Daily Upside newsletter.
It’s completely free and we guarantee you’ll learn something new every day.

It was easily among the most important visits to Beijing by an American official since Richard Nixon stunned the world with his quick get-together with Chairman Mao in 1972.

This week, US Secretary of State Antony Blinken visited China to meet with President Xi Jinping and discuss mounting geopolitical tensions between the two countries. It appears the meeting was amicable as Xi said friendly US-China ties have a great “bearing on the future and destiny of mankind.”

Trading Blows

The US and China were never on the best of terms, but what was once a heated rivalry became an all-out trade war during the Trump administration, and it’s continued into the Biden years with sanctions, tariffs, and chest-pounding from each side.

Any time tensions seemed to be easing, they’d quickly ramp back up. Last summer, Congresswoman Nancy Pelosi went on a diplomatic visit to Taiwan and China’s response was to dispatch warships and fighter jets in the waters around the island nation as a “military exercise.” Blinken was supposed to visit China earlier this year, but those plans were postponed in the wake of February’s spy balloon debacle when the US shot down what China claimed to be a weather balloon blown way off course.

But the two nation’s might be willing to look past their differences for the sake of their economies, and let’s be real, national securities. While some details on exactly what Blinken discussed with Xi and other senior Chinese officials are still minimal, Xi did say that the two sides “made progress and reached agreements on some specific issues.” Rather ambiguous, but hey, we’ll take it:

• Last fall, the US imposed export restrictions that cut China off from certain semiconductor chips made anywhere in the world with US equipment. The Netherlands and Japan joined in too, which has delivered a major blow to China’s tech manufacturing sector and its ability to trade with countries like Taiwan and South Korea.
• The Trump administration’s objective with the trade war was at least in part to reduce the US trade deficit with China — which totaled roughly $375 billion in 2017 — but by 2022, the deficit had grown to $383 billion. And even as the Biden administration pumps hundreds of billions of dollars into domestic manufacturing while tossing around buzzwords like “decoupling” and “de-risking,” it’s clear that the US and Chinese economies are integral to one another.

Our Paths Will Cross Again: Blinken’s successful trip to China could be setting the stage for another meeting between Biden and Xi. The two world leaders had a face-to-face chat during a G20 summit in Bali, Indonesia, last November. It went…OK, with Biden calling it “very blunt” yet “in-depth, candid and constructive.” They had obvious differences when it came to China’s forced labor camps and its decision to continue a strong trade relationship with Russia despite Putin’s war on Ukraine. No one’s giving an inch on Taiwan, but at least they’re talking. However, this week, he said he’s “hoping that over the next several months I’ll be meeting Xi again.”