Bali is famed for many things. It served as the backdrop for the best-selling memoir and, later, Hollywood blockbuster Eat, Pray, Love, starring Julia Roberts, Javier Bardem and James Franco. This week, the Indonesian island made another mark on global imagination following a major diplomatic breakthrough between the world’s two most powerful nations.
US President Joe Biden and Chinese President Xi Jinping held an hours-long meeting ahead of the Group of 20 summit, which underscored both sides’ commitment to heading off a “New Cold War” in the 21st century. In what was, to everyone’s surprise, a genuinely cordial meeting, the two leaders agreed on the need to develop a modus vivendi in order to manage their differences while deepening co-operation in areas of shared interest.
Buoyed by their recent domestic political successes, with Mr Xi securing a third term in office and Mr Biden emerging as the most successful Democratic president in a midterm elections in half a century, both men projected global leadership like never before. For his part, the American president underscored the need to ensure that inevitable competition between the two behemoths “should not veer into conflict” and that the two superpowers “must manage the competition responsibly and maintain open lines of communication”.
Meanwhile, Mr Xi recognised how “the current state of China-US relations is not in the fundamental interests of the two countries and peoples, and is not what the international community expects”.
By all indications, the US and China have managed to transcend, at least for now, recent geopolitical kerfuffle, most dramatically the outgoing US House Speaker Nancy Pelosi’s visit to Taiwan earlier this year, by focusing on the big picture of global governance in the 21st century. And this has been music to the ears of smaller regional states, especially in South-East Asia, which fear getting caught in the dragnet of a great power competition.
In many ways, the detente in Bali shouldn’t have come as a total surprise. Mr Biden made it clear, after only months in office, that he is committed to a new era of global diplomacy. In a speech early last year at the State Department, the newly elected US president vowed to “move quickly to begin restoring American engagement internationally and earn back our leadership position, to catalyse global action on shared challenges”.
Crucially, Mr Biden made clear that this would entail “engaging our adversaries and our competitors diplomatically, where it’s in our interest, and advance the security of the American people".
Specifically, the US president said he is “ready to work with Beijing when it’s in America’s interest to do so”, thus extending an olive branch to the Asian superpower after years of acrimonious relations and unilateralist policies under former president Donald Trump's administration.
It didn’t take long, however, for the new US administration to reveal a more confrontational policy towards China. In his first few months in office, Mr Biden and his top deputies rapidly fortified strategic relations with likeminded powers across the Indo-Pacific, further institutionalising defence and economic co-operation with the fellow Quadrilateral Security Dialogue partners of India, Australia and Japan. Then came the surprise signing of the Aukus nuclear submarine deal.
As if that weren’t enough, the Biden administration’s Interim National Security Strategic Guidance identified China as a major strategic threat to the US. Less than two years into Mr Biden’s tenure, the White House and the Pentagon also released the National Security Strategy (NSS) and National Defence Strategy (NDS), which openly embraced a new era of “great power competition” with China.
The release of the NSS coincided with a new round of sweeping sanctions, which targeted China’s burgeoning semiconductor industry, thus potentially hamstringing Beijing’s industrial policy for the foreseeable future.
In many ways, the Biden administration’s foreign policy began to echo its Republican predecessor, who unleashed trade wars and military counter-measures against China. Unlike the Trump administration, however, the Democratic leadership in Washington had now also begun to embrace a more ideological tilt in its global strategy, which placed “democracy promotion” at the heart of American foreign policy.
To this end, the Biden administration has, inter alia, hosted a global “Summit of Democracy”, which notably excluded China and its key allies, as well as expanded strategic assistance to democracies around the post-colonial world.
In response, the Chinese paramount leader recently warned of “high winds, choppy waters, and even dangerous storms”, a thinly veiled criticism of what the Beijing leadership perceives as a containment strategy by the Biden administration and key US allies. Tensions reached a fever-pitch following Ms Pelosi’s visit to Taiwan, which triggered large military drills by China as well as expanded US military assistance to Taipei in recent months.
Perturbed by rising tensions between the two superpowers, South-East Asian leaders began to warn of the possibility of US and China “sleepwalking into conflict”. In particular, Indonesia and Singapore took up the cudgels for smaller nations hoping to head off an all-out conflict.
Singaporean Foreign Minister Vivian Balakrishnan called for a revitalised global “Non-Aligned Movement”, which could mediate among the superpowers as well as shield smaller nations from the negative repercussions of the Sino-American relations, including disruptions to regional trade and technological investments due to new US sanctions on Beijing.
Meanwhile, Indonesia, the current G20 chairman, prepared the ground for an historic summit between the American and Chinese leaders before the end of the year. Recognising deepening strategic anxieties among regional states, Mr Biden, during the Association of South-East Asian Nations Summit in Cambodia over the weekend, clarified that “the United States … does not seek confrontation [and] wants to make sure that we manage that competition responsibly … ”
He also signalled his administration’s “genuine willingness to work together in areas where US and [Chinese] interests converge and where it’s in the interest of the broader public good as well, whether it be climate change or public health or other issues”.
To everyone’s delight, the American leader stood by his promise just a day later, when he held in-depth and constructive dialogue with his Chinese counterpart on the sidelines of the G20 summit in Indonesia.
Mr Biden and Mr Xi, both deeply proud and unquestionably patriotic, seemed to have peered into the abyss, only to quickly realise that both superpowers have a shared interest in responsibly managing their differences. Following months of escalating tensions, the two superpowers have now zeroed in on practical and realistic means to co-operate while competing for global influence. Only time will tell if great statesmanship could head off what many see as an inevitable showdown between the 21st century’s two most powerful nations.