The leaders of the world's two most powerful countries spent two hours on the phone last night discussing the crackdown in Hong Kong, the apparent genocide in Xinjiang, nuclear weapons, climate change and more.
The big picture: The last 24 hours — in particular, a briefing to reporters ahead of the call on Biden's China strategy — have given us the best forecast to date for the course of U.S.-China competition over the next four years.
Seven key takeaways:
1. The Biden administration accepts Donald Trump's basic proposition that the U.S. is now engaged in an all-out competition with China across trade, technology and security, and that America's foreign and domestic policies must be oriented accordingly.
- But they think Trump weakened America's position by disregarding alliances, failing to speak up for democracy and human rights, and allowing China to fill power vacuums in international institutions.
2. Biden's strategy revolves around confronting China in partnership with countries in Asia and Europe — particularly the other "Quad" countries (Australia, Japan and India) on security issues and European allies on trade and investment.
- That won't be easy, as few of America's partners are fully prepared for the "intense strategic competition" with China that the White House envisions.
3. Trump's tariffs are the new "baseline," a senior administration official said, though the administration expects to adjust them going forward.
4. The Biden administration is attempting to build bipartisan consensus around state investments in industries like semiconductors, artificial intelligence, biotech and clean energy "to make sure that we’re maintaining our edge" on China.
5. The U.S. is continuing freedom of navigation missions in the South China Sea and Taiwan Strait, and it doesn't expect to reduce its troop count in Asia, as Trump had suggested.
6. Climate change is one of the few areas where the White House sees any opportunity for positive engagement with China. Beyond that, their initial focus is much more on competition than cooperation.
7. The leaders committed to keeping lines of communication open, according to the White House. Contacts were held mainly through trade negotiators by the end of Trump's term.
What they're saying: Biden summed up his view from the Oval Office today: "If we don't get moving, they're going to eat our lunch."
- Biden added that the call had been a "good conversation" between two leaders who know each other well due to their many interactions while Biden was vice president.
- The other side: Chinese state media has largely focused on the positive — that the call reflects China's importance in the eyes of Washington.
- The Xinhua state news agency quoted Xi as telling Biden: “Cooperation can help the two nations and the world to accomplish big things, while confrontation is definitely a disaster."
What to watch: Senior administration officials said it would be crucial over the next six to eight months for the U.S. to get its economy back on track, restore its credibility among partners in Asia, and build the foundation of its long-term China strategy.
- Failure to bounce back from the pandemic downturn and place the right bets in key industries, one said, would doom the broader China strategy to failure.