In their first summit in a year, US President Joe Biden and Chinese President Xi Jinping reached an agreement to reinstate military communications while clashing over Taiwan.
The four-hour talks at a historic California estate aimed to ease tensions between the world’s largest economies, with a focus on addressing the deadly opioid epidemic by China cracking down on fentanyl production.
Despite the restoration of military communications, disagreements persisted, particularly on Taiwan, as Xi urged Biden to stop arming the island, emphasizing reunification.
The leaders, who hadn’t met in person since November 2022, navigated through complex dynamics, addressing global issues and committing to discussions on artificial intelligence and climate change cooperation.
However, Biden departed from diplomatic norms by referring to Xi as a “dictator” during a press conference, echoing a statement from June.
The summit concluded with divergent priorities, with Biden addressing the Asia-Pacific Economic Cooperation Forum and Xi hosting a dinner with US executives.
The carefully choreographed summit showcased both cooperation and discord, influencing Chinese stocks, which experienced a decline as investors expressed disappointment over the meeting’s outcome.
Additionally, data revealing prolonged weakness in the Chinese property sector further dampened market sentiment, contributing to a 1% drop in the blue-chip CSI 300 Index and a 0.6% decrease in the Shanghai Composite Index.
Despite these challenges, broader Asian stock markets struggled for momentum, and expectations for a pause in Fed policy tightening persisted.
