Chinese takeaway from the Xi-Biden summit

Nov 22, 2021
Chinese President Xi Jinping

The summit between Joe Biden and Xi Jinping taught us that Australian experts have misread the US’s relationship with China.

On the morning of November 16 Beijing time, Presidents Xi Jinping and Joe Biden met in a video conference to discuss the state of the relationship between their two countries. The two countries are about as diametrically opposed as its possible to be, they are vying for the top position in terms of economic and military power. But the leaders are old friends so the meeting was cordial went well and, according to Chinese media, was a success for both the USA and China, it set the scene for positive future developments. On the other hand, if American media is to believed, Biden demonstrated America’s position of power and strength, warned China not to get too bossy and ensured that China would toe the line in future.

There was however, despite this expected rhetoric, a feeling of optimism globally and a hope that the brinkmanship of the last few months has finally been addressed; great opportunities now exist for even more constructive developments in the future. Apart from being cordial and amicable two very interesting and equally important takes came out of the summit.

One is that Australian foreign affairs experts and analysts have completely misread messages sent to them by their leading security partners, the USA (or the USA may have deliberately misled and deflected blame towards Australia) because, in the last month, Australia has not only upset Europe, and in particular the French, by pulling out of a conventional submarine deal but has also announced they would support the USA in any military intervention over Taiwan — only one day later to hear Biden announce that the US will continue to respect the Taiwan issue and the One China Policy (and all associated agreements). Both announcements are contrary to any spirit of friendship, development of relationships or cooperation towards China who happen to be Australia’s largest trading partner.

This declaration by the US president has much wider implications than a maintenance of the status quo, it means he, and therefore his administration and military will respect the current position: in doing so, relieving a great deal of pressure in the region.

For Australia, their tangential shift from French conventional to US nuclear submarines, the cost, final details of delivery, infrastructure and even use of which, are all still completely unknown, didn’t just upset China, it has upset many Australians too. Yet Biden’s confirmation of his respect for China’s position now means that Australia, which never really had a need for nuclear attack submarines at all, now has even less reason to buy them.

First the nuclear submarine and then the Taiwan announcements from top tiers of the Australian government leave Australia’s Defence Minister, Peter Dutton looking like a schoolyard bully who suddenly realised his gang weren’t behind him to back him up. In terms of both geo and local politics, Australia is looking decidedly red-faced. His Prime Minister isn’t even engaging in the discussion so we have no idea if he agrees or otherwise!

The second big take to come away from the reporting of the summit, rather than from the summit itself, is that American media outlets were very positive in demonstrating US strength. Several of them alluded to a signing ceremony which took place a few hours before the summit. CNN had this to say:

“White House officials had hoped a large South Lawn signing ceremony for a massive new public works package, which occurred a few hours before Biden’s virtual summit, would help signal progress on the main underpinning of his foreign policy: proving democracies can deliver more effectively than autocracies like China. He planned to detail the new infrastructure package to Xi.”

Let’s look closely at the emboldened words in this paragraph: As any informed reader would know the $1.2 trillion Bill includes $650 billion of normal expenditure and $550 billion to apply to replacing existing infrastructure. What many readers don’t know though is that currently in the USA, almost half the roads and bridges are in poor repair (43 per cent and 42 per cent respectively) with 7.5 per cent of all the bridges in the country considered to be structurally deficient. There is no high-speed train and the Bill doesn’t have any allowance for it, what it does have is $66 billion to address deferred maintenance of and upgrades to the existing Amtrak service. It also has $65 billion to improve internet efficiency across the country and $55 billion to provide clean water.

In other words, the $550 billion will be spent on infrastructure and services already in place in the developed world, but missing in the world’s richest country while already present in China. Thus, proving the absolute contrary to the claim that “democracies can deliver more effectively than autocracies like China” because China has already delivered to their people higher quality infrastructure and continues to do so.

Notwithstanding all this, there are people in the USA who actually don’t believe China has the infrastructure they say that have. It’s easy to sit in a basement plugged into a cable network (because there’s no WiFi or 5G available) and criticise China as being backward but it’s not possible to dispute the World Bank’s infrastructure figures which show a constant stream of upward movement in almost every sector.

What’s even more intriguing though, is not the people who deny China’s infrastructure, but those who claim it’s “stolen” from the USA In a remarkable series of tweets since the CNN report; we see what could be humorous, but in fact turn out to be serious tweets like this:

When questioned on the matter, the reply came back thus:

To be fair, what this tweet probably means is that the USA has fewer jobs, therefore less tax revenue and less ability to build infrastructure than it did in the past. And, since China has got more jobs, more tax revenue and more infrastructure, it wasn’t a theft, but a transfer and he’s right. But it isn’t China’s fault.

Eight of the top 10 richest companies (by market capitalisation) in the world are US companies, the other two are Chinese (Alibaba and Tencent). Although many of these companies pay tax in every country in which they operate, all of them who have production or manufacturing facilities have moved those activities outside of the USA. Meaning the US market has moved away from payment of local wages and associated taxes in favour of cheaper production and payment of salaries and taxes to the countries in which they operate. (Famously, one or two of them avoid all forms of taxation, but that’s the subject of a different article). Walmart, another US based company, not in the top 10 but certainly the world’s largest retailer, sources 70–80 per cent of its goods from China, on a turnover of $550 billion that’s a lot of wages and taxation not earned in the USA. If the USA would like to change that situation, then it should be taken up at the ballot box — which, after all, is what they claim democracy is all about.

Most people in China hope that relations with the USA can improve. We all want lasting peace. Chinese people have long admired Americans for their incredible achievements but are now very well aware that China’s recent achievements and improvements have overshadowed what used to be the world leader’s. Contrary to CNN’s claims, China delivers and delivers well; contrary to the claims of people who doubt China’s achievements, the proof is documented and irrefutable, it’s right outside the doors and windows of every Chinese person whether they live in a modern megatropolis like Shanghai or Shenzhen or in the villages of provinces like Guizhou where residents see improvements in roads, trains communication health and education already delivered, in place and operating well.

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