With this in mind, Biden is expected to emphasize the areas in which Beijing and Washington can cooperate. But growing tensions over issues such as Taiwan, Hong Kong and human rights have also driven a wedge between the two countries and their economies, complicating the talks.
“One should not hold out false hope that the Xi-Biden virtual summit will fix the fundamental differences between China and America or change the general trajectory of the rivalry,” said Alex Capri, a research fellow at the Hinrich Foundation. “The overarching question is whether, under the best of circumstances, the two leaders can try and come up with the rationale for a new kind of ‘competitive coexistence.'”
Here are some issues on the economy they could talk about.
Trade and tariffs
The United States has backed the “Phase 1” trade deal former President Donald Trump signed with China in January 2020. In a speech last month, US Trade Representative Katherine Tai said China must be accountable for promises made in that agreement. Beijing has not delivered yet on its all its commitments, she said.
Tai also indicated the United States could push China to go even further.
“We continue to have serious concerns with China’s state-centered and non-market trade practices that were not addressed in the Phase One deal,” Tai said. “As we work to enforce the terms of Phase One, we will raise these broader policy concerns with Beijing.”
A senior Biden administration official told reporters on Sunday that supply chain issues and tariffs are not on Biden’s agenda for the meeting, but it is possible that Xi will bring them up.
China’s property sector
“It’s something that’s important, that we’re monitoring closely,” Yellen said, when asked if she was confident China could control the financial fallout of a real estate slump.
Financial markets were rattled in September after the developer Evergrade warned it could default on its massive debts. That sparked fears of contagion across the real estate industry, which accounts for as much as 30% of China’s economic output.
“China’s a real estate sector with firms that are over-leveraged and it’s something that China is trying to deal with,” Yellen said.
In a recent report, the Federal Reserve warned that “financial stresses in China … could further strain global financial markets and negatively affect the United States.” The Fed pointed specifically to the crisis at Evergrande.
Energy and climate
“I’m gloomy about the prospects for cooperation on anything, except maybe climate, where their interests coincide,” said William Reinsch, a senior adviser at the the Center for Strategic and International Studies in Washington.
The world’s top two economies are also its biggest polluters, and both are feeling the pain of an energy crunch exacerbated by attempts to transition to greener supplies.
Neither China, the world’s biggest coal consumer, nor the United States signed on to a deal announced at COP26 in which a number of countries committed to phasing out the use of coal. They have said they will phase down its use.
— Jill Disis and Natasha Bertrand contributed reporting.