From Sunnylands to Storm Clouds: Xi, Obama Face Tense Summit

Xi Jinping US visit

Xi Jinping and Barack Obama take a walk at the Annenberg Retreat in California in 2013. Photographer: Lan Hongguang/Xinhua via Getty Images

  • `Tremendous amount at stake' for Chinese president's visit
  • Opportunity for both sides to smooth over recent disputes

Two years ago, Xi Jinping and Barack Obama took a stroll in their shirtsleeves in the California sunshine. The getting-to-know-you chat on the Sunnylands estate went so well Obama declared it “terrific.”

This week, when the presidents of the world’s two biggest economies meet in Washington, things will be different. On the surface, the trip will go smoothly, if not exactly Sunnylands 2.0. Months of shuttling diplomats will ensure Xi and Obama’s public comments are sufficiently nuanced and that the Chinese president gets polite pomp on his first state visit to the U.S., including a banquet and 21-gun salute.

Underneath, the relationship is being rattled along several fault lines. There are tensions over China’s heavy-handed intervention to prop up shares, access to each others’ markets, cyber-hacking, disputed Asian waterways and China’s human rights record. The broader question is how these two very big -- but very different -- countries can continue to get along.

For Xi, fresh off a large military parade in Beijing, the visit is about recognition of China’s status as a resurgent world power. For Obama, the conversation is about preserving U.S. clout in a region it has dominated since World War II, including access for its companies. The U.S. presidential election provides a noisy backdrop, as candidates cast China as a foe seeking to erode American strength.

"The atmosphere is a bit nasty, a far cry from two years ago. At this moment, there is a long list of negativities in bilateral ties, while the so-called bright spots, those cooperative areas, are too vague to be seen clearly," said Niu Jun, an international relations professor at Peking University. "The imperatives now are to control the negative areas."

‘Difficult Summit’

Xi and Obama will both seek to come away from meetings that start Thursday claiming results. Prospective areas for agreement include climate change, anti-terrorism efforts, North Korea, the U.S.-led Iranian nuclear deal and progress toward a two-way investment treaty.

"This is going to be a difficult summit; the best they can hope is to shore up joint ideas that the U.S. and China can still collaborate and do things together," said Orville Schell, the director of the Center on U.S.-China Relations at the Asia Society in New York. "It’s difficult to have an enthusiastic and open conversation under the current circumstances."

Beijing has billed the trip as on par with late paramount leader Deng Xiaoping’s historic 1979 visit, which was the first by a leader since the republic was founded in 1949. Deng’s nine-day trip at the invitation of then-President Jimmy Carter came weeks after the two established diplomatic ties.

Big Three Problems

"There is a tremendous amount at stake for Xi," Schell said. Xi must show his audience that he’s protecting Chinese interests. He’ll also need to reassure Obama that Beijing doesn’t seek to overthrow the global order. He’ll again advocate a "new type of major power relations."

Cyber-espionage, human rights and China’s claims to sovereignty over most of the South China Sea, which contains some of the world’s busiest shipping lanes, are the thorniest issues, said Jeffrey Bader, who formerly advised Obama on Asia policy at the National Security Council.

"Those are the big three problems," said Bader, a visiting scholar at the Brookings Institution. "None is solvable in the near future, but the administration will want dialogue or reassurance from the Chinese that they will not take steps to aggravate any of these problems."

Economic Concerns

Obama last week escalated the fight over cyberspace, saying the U.S. was preparing measures to show that economic espionage won’t be tolerated. “This is not just a matter of us being mildly upset,” Obama said.

Xi may find himself boxed in by China’s economic slowdown and criticism of efforts to support shares amid a stock rout that wiped about $5 trillion off local exchanges since mid-June.

“On the back of a strong economy, Xi could visit the U.S. as a burgeoning equal,” said Robin Niblett, director of London-based Chatham House. “Now, he must undertake the visit in the shadow of the contrast between U.S. growth and the appearance that China’s economy might capsize on the shoals of the transition to middle-income status.”

“It will be harder to spin the visit positively back home," Niblett said. "And the slightest ‘slight’ of Xi by the Americans, accidental or not, would be taken very badly.”

‘Personal Charm’

U.S. Treasury Secretary Jacob J. Lew said in a Wall Street Journal commentary that Xi’s visit was a "crucial opportunity to reaffirm" China’s support for economic reform. Restrictions on the purchase of foreign technology, overly broad reviews for investments and the stock rescue effort raised doubts about the country’s commitment to the market’s role, Lew said.

China has in recent days dispatched its top domestic security official to Washington to talk down cyberspying tensions, freed a prominent human rights scholar and made a fresh pledge to support the Iran agreement. Meanwhile, the U.S. repatriated a former Zhejiang provincial official who had spent 14 years in the U.S. amid graft allegations back home.

The Chinese leader would seek to use “his personal charm to stabilize relations,” said Sun Zhe, director of the Center for U.S.-China Relations at Tsinghua University in Beijing.

Xi, who has cultivated a down-to-earth image at home by patronizing a pork bun shop and taking a taxi, will tour Lincoln High School in Tacoma, Washington, which he visited in 1993. In Seattle, he’ll swing through Microsoft Corp. and Boeing Co. facilities and speak to a gathering of U.S. and Chinese business leaders including Warren Buffett and Tim Cook.

The White House will look for evidence in China’s actions, said Bonnie Glaser, senior adviser for Asia at the Center for Strategic and International Studies. The presidential race was “contributing to the growing pressure on President Obama to be tough and seek concrete Chinese efforts to address them,” she said. “I expect less than was produced at the last summit.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE