Expectations high ahead of APEC, U.S.-China summit

San Francisco Moscone area [Photo by Xinhua / Yonhap]

The U.S.-China summit to be held on Wednesday (local time) on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Summit in San Francisco, the United States, this week is expected to focus on the Taiwan issue and semiconductor export restrictions. In particular, the U.S. restrictions on semiconductor and semiconductor equipment exports to China, which began in 2019, is expected to be a key topic, with the countries expected to formulate an “exit strategy” during the summit. The restrictions have hit U.S. companies, such as Nvidia Corp., hard, and have been criticized for accelerating China’s semiconductor independence. There are expectations that Washington may step back on issues such as China’s escalating show of force around Taiwan and concerns about Chinese intervention in Taiwan’s presidential election in January 2024.

Last week, U.S. Secretary of the Treasury Janet Yellen met with Chinese Vice Premier He Lifeng in San Francisco where they reached an agreement that the two countries would not seek ‘decoupling’ from each other.

Experts believe that this summit, unlike previous ones, is likely to produce a ‘concrete’ agreement, given that both U.S. President Joe Biden and Chinese President Xi Jinping need to resolve the strained relationship between the two countries to address their leadership crises at home and abroad.

Biden, who is up for re-election in 2024, is involved in two wars in Ukraine and the Middle East, so stability in East Asia is essential. He also needs China’s cooperation to tackle the fentanyl crisis, one of the nation’s worst drug crises.

Xi, for his part, needs to restore his country’s exports to the United States to revitalize the stagnant Chinese economy even after securing his third term in office. Improving relations with the United States is particularly essential to lure back foreign investors, who have been exiting in record numbers.

Notably, Chinese media have been delivering friendly messages, creating a ‘thawing mood.’ The People’s Daily, the official newspaper of the Chinese Communist Party, said on Sunday that “the whole world is paying attention to this San Francisco summit” and that “mutual tolerance is the only choice for China and the United States.” Other Chinese media outlets have published extensive commentaries emphasizing the eternal friendship between the Chinese and Americans, recalling examples of friendly relations between the two countries in the past, such as the Flying Tigers, a U.S. military unit that was sent to help China during World War II.

The APEC Summit, meanwhile, is expected to discuss major issues such as North Korea’s nuclear and missile development, Russia’s invasion of Ukraine, and the Israel-Hamas war. However, there is skepticism about the summit issuing a joint statement on such key issues, especially with the absence of Russian President Vladimir Putin and China maintaining neutrality in the Israel-Hamas conflict.

Cooperation on climate change is also expected to be a significant topic at the summit, given that the United States and China, as well as other major member states, are on the same page on the climate crisis and can take joint action.

South Korean President Yoon Suk Yeol will attend an APEC CEOs summit on Wednesday afternoon. In this session, he will be joined by the leaders of Thailand, Vietnam, Chile, as well as Microsoft Corp. CEO Satya Nadella and Pfizer Inc. CEO Albert Bulla. Yoon will deliver a keynote speech on ‘strengthening interconnectivity within APEC.’

On Thursday, Yoon will meet with the leaders of major countries, including the United States, Japan, and Australia, at a summit of the Indo-Pacific Economic Framework (IPEF). The IPEF is a new economic arrangement in the Asia-Pacific region launched in May 2023 at the initiative of the U.S. government that aims to counter China’s growing economic influence in the region., IPEF is expected to gain momentum with the participation of major leaders.

On Friday, the final day of the summit, Yoon will hold a roundtable discussion with Japanese Prime Minister Fumio Kishida at Stanford University on cooperation between Korea, Japan, and the United States in the field of high technology. The final day of the summit could also see a summit meeting between Yoon and Xi.