The Presidents Meet, We Get Pandas, The City By The Bay Gets a Clean-Up

President Biden spent about four hours last week meeting with Chinese President Xi Jinping in their first smile-to-smile meeting in a year. Biden’s limited expectations for the meeting were met, as were Xi’s more important hopes.

Biden Gets What He Came For

Biden came because he worried that a mistake by China’s military might add a third front to the two — Ukraine-Russia and Israel-Gaza/Iran – in which America is already involved. And because he wants to stop the flow of fentanyl that he says is killing more young Americans every year than the guns he has tried to ban from general use. He got what he was after.

Xi agreed to re-open the military-to-military communication channels he closed in 2022 to protest then-speaker Nancy Pelosi’s visit to Taiwan. He also again agreed to measures designed “substantially” to stanch the flow to Mexico of ingredients for the manufacture of fentanyl headed for the US. Seemingly most important to Biden, the two men agreed to speak directly, “pick up the phone”, when serious problems arose. Credit Biden for the persistence displayed in the face of a public and humiliating refusal by Xi to accept his calls.

XI Aims Higher

Xi had a grander goal. Two, in fact. He aims to lead a New World Order that eschews democracy and reliance on the dollar for most transactions and as a reserve currency, and to persuade America’s capitalists to invest in his country.

The first requires that he be seen by signed-up New World Order members Russia, Iran, Brazil and the BRIC group, and potential recruits an equal of the leader of the existing world order, the President of the United States of America. Which is why he refused to meet, as Biden proposed, at a side room during the Asia-Pacific Economic Cooperation (APEC) conference of world leaders in San Francisco, but insisted on a private venue the separated him from the run-of-the-mill leaders of the 19 other countries in attendance.

He got what he was after, including a photographed walk with Biden in the gardens of a 654-acre estate some 20 miles south of San Francisco, New World Order meets Old World Order, leader of the Old admires car of leader of the New.

Troubled Communism Seeks Capitalist Bailout

Xi’s second goal of this first visit to America in six years was to do something to rescue his economy from the sorry state into which it has fallen as a result of his policy errors – a draconian shut-down in response to the Wuhan covid and misallocation of capital by his central planners. China’s economy was 75 per cent of the size of America’s in 2021; it is now only 64 per cent as large as America’s. He needs capital to bail him out and where better to find capital than in the world’s leading capitalist country. Towers in ghost cities remain empty; over-leveraged property developers and local governments are headed for bankruptcy; unemployment of young people, reported at 20 per cent, is so high that data are no longer published and Xi is urging them to “go down to the countryside” to start businesses to revitalize rural areas, places not famous for the urban amenities that young Chinese enjoy.

Capital flight is the order of the day. Successful entrepreneurs send their children and wealth out of harm’s way. Foreign firms have withdrawn or stopped reinvesting in China, taking $160 billion in earnings in recent months out of the country and pushing overall net foreign investment into the red. The currency is down against the dollar. China’s factories with excess capacity are dumping exports at prices that make Trump’s tariffs on Chinese goods, which Biden has largely retained, look like a good idea indeed.

Reporters Behaving Badly

The summit concluded, President Biden conducted only his third solo press conference this year. He reported rather fully on the meeting, and must have been surprised to face questions that had nothing to do with the news being generated at the summit meeting. CBS and Washington Post reporters wanted to know about what the latter called “Israel’s war in Gaza [that] has killed more than 11,000 Palestinians”. The Post reporter wanted to know whether Biden had given prime minister Netanyahu a deadline to end the fighting. As long as it takes to defang Hamas was the gist of the longer answer. Odd that reporters should forgo an opportunity to cover an event at which they were on assignment in favour of challenging the President’s support of Israel. Perhaps not.

Useful Idiots Meet Needy Communist

Xi’s post-summit time was spent at a “welcome dinner”, some 300 businesspeople giving him a standing ovation before digging into Angus steak or vegetable curry. Top capitalists paid $40,000 to sit at his table (with eight tickets for lesser lights to sit at the equivalent of below the salt and pepper). Apple’s Tim Cook, with 20 per cent of his revenues coming from China where 95 per cent of iEverythings are manufactured; Boeing’s Stanley Deal, hoping for orders for his 737 Max.

X’s Elon Musk, who also makes Teslas, half of which are shipped from Shanghai, joined the group for cocktails and departed early to tend to the problems his tweets have created. Failure to show up to honor the leader of the New World Order likely would have cost more than $40,000 by multiple millions.

Xi offered to be “a partner and friend” instead of the United States’ “biggest rival,” and announced plans to invite 50,000 young Americans to China over the next five years “to build more bridges.” Presumably, all will be permitted to return to the US when they so choose.

Xi’s dinner partners are being asked to trust a country that promised to end its subsidies and theft of their intellectual property to gain membership in the World Trade Organization, but neglected to convert promises to actions. And being asked to make their capital hostage to a man who has ordered raids on their offices, detained their staffs, and issued exit bans on visiting foreign businessmen. Some are “useful idiots”, bedazzled by the prospects of the massive Chinese market, others are scrambling to reorganize their supply chains to be less dependent on China, and need time to get that chore done. Whether they are prepared to share the risks their staffs face by working in China is doubtful.

America’s Business Bulls Get China’s Bears

Xi was all soothing charm. He announced plans to send some pandas to America, “envoys of friendship between the Chinese and American peoples,” surely a more important indicator of that friendship than the harassment of American ships and planes operating in international waters and air space.

Biden says he is in a trust-but-verify mode. Meanwhile, he will continue to sell arms to Taiwan while adhering to America’s ambiguous one-China policy, and ban strategic exports to the People’s Republic, turning down Xi’s request for a relaxation. He will continue to pour taxpayer billions into incentives for American businesses to come home and foreign businesses to locate here. In short, in fairness to Biden it should be noted that he got what he came for while surrendering none of the protectionist programs on which he is relying to make America great again.

The Real Winners, At Least For A While

The biggest winners were the citizens of San Francisco. To avoid having the thousands of international press descending on the city snap photos showing Xi stepping over 8,000 homeless people while avoiding their excrement and spent drug paraphernalia, or perhaps having one of the cars in Xi’s entourage broken into or car-jacked – 15,000 so far this year in the city in which crooner Tony Bennett professed to leave his heart although he lived in New York City – Governor Gavin Newsom ordered a major clean-up in preparation for a run for the Democratic presidential nomination should Biden stumble. All streets were power-washed. The mayor added pop-up restaurants in the downtown area to present Xi with America’s version of a Potemkin village. Residents wondered why Xi could accomplish in a short visit what the mostly liberal politicians they have repeatedly elected have been unable to accomplish in years.