Rising Inflation; Biden-Xi Meet Virtually; Beijing Stock Exchange Commences Trading; Reopening of DPRK-China Border; Unicorns.

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Price indexes have ticked up across the board as Beijing manages several economic pressures simultaneously. Meanwhile, China’s newest stock exchange is up and running in its mission to be an incubator of innovation.

Sino-American relations aren’t back on track yet, but regular high-level contacts are fashionable again.

Northeast Asia is gearing up for the resumption exchanges between North Korea and its closest partner — and in many ways, its economic lifeline.

Read about these and other topics in the pages ahead that help capture the fluidity of developments in China and the essence of where the country is headed in the current era.

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Biden-Xi Virtual Meeting Made Little Breakthrough but Clarified on Key Issues

On Monday, the U.S. and Chinese heads of state met via video. The talk, coming on the heels of APEC, COP26, and G20 summits, spanned the breadth of the US-China relationship.

Four major Bilateral ambiguities were clarified at the Meeting.

Biden has affirmed four key positions on China to the Chinese counterpart, which are the clearest China policy laid out by the Biden administration to date.

  1. The US does not seek to change China’s system.

This marks a clear departure from the previous Trump-era China policy that seeks to delegitimize the Chinese Communist Party-run government or a Cold War Strategy that seeks to roll back Communism.

That “the US does not seek to change China’s system” is the headline across nearly all Chinese media sources covering the Biden-Xi meeting. This dissipates a fundamental Chinese fear that the US has aimed to change China’s system over the past decades.

  1. The US does not support Taiwan's Independence.

This is absolutely a bottom-line issue for China. China has pressured the US to recognize and confirm this very point ahead of the Meeting, and China has gotten it from Presdient Biden. This is a crucial achievement for China.

  1. The revitalization of the US alliances is not anti-China.

This can potentially send some comfort to the US allies around the region, particularly in Southeast Asia, who can engage with both economic giants simultaneously, without having to choose in a US-China dichotomy.

It remains doubtful how much the Chinese policy community buys this narrative.

  1. The US has no intention to have a conflict with China.

Establishing competition guardrails have been discussed by both leaders. Both sides do achieve a consensus on this principle.

China’s three principles for bilateral relations voiced at the meeting

  1. Mutual respect

  2. Peaceful coexistence

  3. Win-win cooperation

These principles have not deviated from China’s consistent foreign policy stance with the US, extended through the Jiang/Hu era. Xi is returning to the traditional US-China policy setting, partly to stabilize the relationship and partly to reengage the US to achieve China’s domestic economic agenda that Xi has laid out. (read more)

How does China see the major-power relationship?

The US and China are two giant ships. We must ensure that the two ships don’t deviate from each other’s own path, don’t lose momentum, and most importantly, don’t collide.

In a typical Chinese metaphoric language, Xi stressed the importance of maintaining the Chinese path, China’s speed of development, and avoiding hot conflicts.

不偏航、不失速,更不能相撞

Getting down to business

China emphasized that Presdient Biden initiated the meeting. The meeting happened during the morning hours in Beijing, while Washington worked late through the night, indicating China’s relaxed position and confidence in meeting the US on a level playing field.

The White House readout

Biden touched on issues from human rights, territorial disputes to China’s industrial and economic policies, trade, and Taiwan. The U.S. side also stressed policy overlap with Beijing, touching on pandemic preparedness and cooperation on climate. (source)

Both parties recognize the need to have the other in the room to achieve binding nuclear agreements with Iran or bring Pyongyang to the negotiating table. (source)

Beijing’s conciliatory gesture from its readout

Beijing rephrased the Biden administation’s China policy of “coexistence” to “peaceful coexistence.” It declared itself “ready to work with the United States” to restore the worsening bilateral relationship, provided that it remains grounded on the principles of mutual respect and peaceful coexistence. (source)

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