Biden, Xi Spoke By Phone About AI Risks, Russia And Fentanyl

(Bloomberg) -- US President Joe Biden and Chinese leader Xi Jinping spoke by telephone on Tuesday, their first one-on-one communication since meeting in California last November.

The leaders of the world’s two biggest economies have managed to maintain a veneer of diplomatic stability despite deep mutual suspicion between their countries, and as their governments pursue export controls, sanctions and tariffs. At the same time, they have sought common ground on issues including risks posed by artificial intelligence and combating illicit drugs like fentanyl.

Biden was expected to push Xi on counter-narcotics efforts while addressing progress made since November on measures to restrict and disrupt the flow of some precursor chemicals to make synthetic drugs, according to a senior administration official who briefed reporters.

Biden also was set to reiterate with Xi that China should use its leverage with Russia and Iran to enhance stability, both around the war in Ukraine and amid turmoil in the Middle East, the official said, adding that the president would also raise concerns over Chinese behavior in the South China Sea. That included a recent episode in which the Chinese blasted water cannons at a Philippine supply boat.  

The two leaders agreed in November to keep up more regular communications, since it had been a year since their previous one-on-one talks amid tensions that included the flight of a Chinese balloon across the US. Biden faces a re-election campaign against Donald Trump, who kicked off a trade war against China after he first took office and is proposing a 60% tariff on all Chinese imports if he comes back to power.

The call comes as the US weighs a final decision on its review of tariffs on China, which is expected to include some new levies, such as on connected vehicles. The White House has not said when it will make its tariff announcement.

Xi has sought to keep tensions low as he seeks to revive a struggling economy, holding a last-minute meeting last week with American business leaders in Beijing including Blackstone Inc.’s Stephen Schwarzman and Qualcomm Inc.’s Cristiano Amon. The Chinese president told the group that China’s economy hasn’t peaked, while calling on US companies to invest in his nation, saying he sees no need for Washington and Beijing to decouple, Bloomberg reported last week.

Yellen Visit 

The US side prepared a laundry list of other bilateral and international issues for Biden to discuss with Xi: cybersecurity and the US need to prevent advanced technologies from undermining national security; concerns over Hong Kong’s autonomy; a call for China to release Americans wrongfully detained or under exit ban; and concerns over potential Chinese interference in the US general election.

Plans for a Biden-Xi call were accelerated when National Security Advisor Jake Sullivan met with his counterpart Chinese Foreign Minister Wang Yi in Bangkok in late January. Treasury Secretary Janet Yellen is to visit Beijing in the coming days, with Secretary of State Antony Blinken following in the coming weeks, the official said.

Yellen will spend two days in the southern commercial and manufacturing hub of Guangzhou beginning April 5 before heading to Beijing for two more days of talks, the Treasury announced Tuesday.

In recent months, the Biden administration has rolled out a series of measures meant to counter China. They include a sweeping executive order on data security that purports to cut off transactions involving Americans’ highly sensitive personal data from countries of concern, while not naming China directly; an investigation by the Commerce Department that could lead to restrictions on imports of Chinese electric vehicles; and an executive order to bolster cybersecurity and mitigate the risk of Chinese-made cranes at American ports.

The Biden team is also due to report on whether and how it will change Trump-era tariffs on China — with analysts betting that on balance many will remain, especially in an election year.

The White House has, however, touted some wins on cooperative efforts with China since the leaders met in person on the sidelines of the Asia-Pacific Economic Cooperation meetings. The US hailed as major achievements a working group on counter-narcotics that started meetings earlier this year, the restoration of military-to-military communications, and a fresh dialogue on how to manage the risks of artificial intelligence. Those AI meetings are slated to begin in the coming weeks, the official told reporters.

Discussions on AI would come on the heels of a related United Nations resolution approved last month that was introduced by the US and co-sponsored by more than 110 countries, including China and India. The non-binding proposal encourages members to support “responsible and inclusive” AI development through domestic regulations and governance.

(Updates with background starting in sixth paragraph)

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