U.S. President Biden and Chinese President Xi met virtually on Monday night in an effort to cool tensions. A wide range of issues were discussed during the meeting, including bilateral trade relations, even though that was not a major part of the conversation. Biden mentioned the enforcement of the Phase One agreement and China's “unfair trade and economic practices.” Xi, on the other hand, urged the U.S. side to depoliticize trade issues and stop “suppress[ing] Chinese businesses.” While the meeting may help pave the way for bilateral cooperation on some issues such as climate change, it does not reset trade relations.

According to a senior administration official, Biden "did underscore the importance of China fulfilling its Phase One commitments, and his desire to see real progress on the conversations that Ambassador Tai is having with her counterpart, Vice-Premier Liu He.” This language echoes a previous statement from U.S. Trade Representative Katherine Tai that the U.S. “must enforce” China’s commitments under the Phase One deal. Without elaborating on China’s response, the official noted that “they have a different view on many of these issues.”

China’s Ministry of Foreign Affairs reported on the trade conversation as follows:

President Xi described the China-US economic and trade relations as mutually beneficial in nature. Business is business. Economic and trade issues between the two countries should not be politicized. The two sides need to make the cake bigger for cooperation. China takes seriously the wishes of US business community to travel to China more easily, and has agreed to upgrade fast-track arrangement, which will further enhance economic and trade exchanges between China and the US and boost the recovery of the two economies. The US should stop abusing or overstretching the concept of national security to suppress Chinese businesses. It is imperative for China and the US to maintain communication on macroeconomic policies, support world economic recovery and guard against economic and financial risks. The US should be mindful of the spillover effects of its domestic macro policies, and adopt responsible macroeconomic policies.

On a broader but related subject, Biden stated that the United States will “ensure the rules of the road for the 21st century advance an international system that is free, open, and fair” and “protect American workers and industries from the PRC’s unfair trade and economic practices.”

With regard to open and fair markets, President Xi stated that “opening-up is a fundamental state policy and a hallmark of China. China will not change its determination to open up at a higher level. China will not change its determination to share development opportunities with the rest of the world. And China will not change its determination to make economic globalization more open, inclusive, balanced and beneficial to all. The new development paradigm that China is working to establish is aimed at expanding domestic market, fostering both domestic and international circulations with greater scope and scale, and building a business environment that is more market-oriented, law-based and up to international standards. All this will provide a bigger market and more opportunities to other countries.” Xi offered similar comments on opening up and fair markets during a speech at the APEC CEO Summit last week.

A Xinhua commentary highlighted that "the significance of China-U.S. ties has gone far beyond the two countries, and has implications for the future of the world,” and therefore “it is important for the two countries to cooperate in a wide range of areas, including economy, energy, military-to-military cooperation, law-enforcement, education, science and technology, cyberspace, environmental protection and sub-national interactions.”

Some Chinese scholars consider that the meeting sends “a positive sign” and represents the start of “a period of equal and fair dialogue.” Others, such as Zheng Yongnian, Director of Advanced Institute of Global and Contemporary China Studies of Chinese University of Hong Kong, Shenzhen, believe that we have entered a period of “precise decoupling and engagement.” “The United States will precisely block China's high-tech industries that promote China's economic development. For low-tech and low-value-added industries that the United States no longer produces, the United States will continue to engage with China,” Zheng told the Beijing News in a recent interview.