Press Briefing: Previewing 2023 APEC Leaders' Meeting

This transcript is from a CSIS press briefing hosted on November 7, 2023.

Paige Montfort: Thank you. And thank you for your patience today, everyone. Welcome to our press briefing, previewing the upcoming Asia Pacific Economic Cooperation leaders meeting, APEC, in San Francisco. As our operator kindly introduced, my name is Paige Montfort. I am the assistant director of communications here at CSIS. And it’s a pleasure to have so many of you dialed in for today’s call.

I am joined by a terrific lineup of colleagues and we have a lot of ground to cover, so I’d love to jump right in. We are going to start off with Dr. Victor Cha, who’s senior vice president for Asia and Korea chair here at CSIS. Dr. Cha is going to provide a brief overview. And then we’ll go down the order after him with each of our experts offering a couple of minutes of remarks. And finally, we will open it up to your questions.

So, Dr. Cha, please take it away.

Victor Cha: Well, thank you, Paige. And thanks, everybody, for joining our call this morning. I’m just going to be very brief in terms of the introduction so that we can get our scholars to drill down on some of the issues we expect to see over the next week.

As you all know, APEC is certainly sure to tie up San Francisco traffic even more than usual next week. This will be the first time for the United States to host in quite some time. I think, in probably over 12 years. APEC is certainly very important for the United States. APEC members constitute 40 percent of the globe’s population and half of global trade. Seven of the U.S. top trading partners are APEC countries. Certainly, the United States will use APEC to highlight some of the advances in IPEF.

I think, as hosts, the United States does have say over participant invitation, and it’s pretty safe to say that Vladimir Putin will not be coming. But I think Gaza and Ukraine are certainly to be discussed – an issue that will be discussed among the leadership of the APEC countries. You know, whether there’ll be a statement on these issues remains to be seen. I’m sure it’s certainly being worked on. But there are disagreements, I think, on both of these issues. And so what we might see is smaller groupings of like-minded countries that may make statements on this.

The big focus of the meeting, obviously, will be the U.S.-China, aspect of this, and the U.S.-China bilateral to carry on a conversation between the two leaders that started in Bali on the sidelines of the G-20 a year ago. Again, I’m going to – our scholars will speak to this a great deal, but I think sort of the two things that are most at the top of people’s minds, certainly here in D.C., are where we are on military-to-military dialogue and crisis hotline and, of course, whether there is an opportunity for the U.S. and China to work together on the whole question of narcotics, and particularly fentanyl.

So I think – and if there’s modest progress on those issues, that could certainly be chalked up as an important win for the administration. So with that, Paige, let me get out of the way and then give our scholars a chance to sort of drill down on some of these issues.

Ms. Montfort: Thank you so much, Dr. Cha.

Next, it’s my pleasure to introduce Dr. Bonny Lin, who is senior fellow for Asian security and director of the China Power Project here at CSIS. Bonny, please go ahead.

Bonny Lin: Thank you very much, Paige. And it’s great to join everyone today.

As Victor mentioned, we are expecting a meeting between President Biden and Chinese leader Xi Jinping at APEC. What we’ve seen recently, including the PRC director of the Office of Foreign Affairs Commission and Foreign Minister Wang Yi’s visit to D.C. in late October, and the meeting this week, including between a Special Presidential Envoy for Climate John Kerry and his Chinese counterpart Xie Zhenhua, as well as Secretary Yellen with her Chinese counterpart, Chinese Vice Premier He Lifeng – these are all meetings that are laying the groundwork for the meeting between the two leaders. And it’s looking more positive than a couple of weeks ago, in which when Wang Yi was here, he said that we should not expect that it would be smooth sailing and the meeting would necessarily occur.

Right now, neither the United States nor China are entering the meeting – potential meeting between President Biden and President Xi expecting to significantly improve or reset the relationship. Rather, the meeting will be about managing and stabilizing the bilateral relationship, improving communication, and reducing misunderstandings before they occur, and also to empower both bureaucracies to begin to more – to institutionalize engagement between the two sides, but also see if it’s possible to make progress on potential areas of shared interest.

Both countries are expecting a potentially rocky year in 2024 with the Taiwan presidential elections in January 2024 but also the U.S. presidential elections in November 2024 that – and both could inject more uncertainty into the bilateral relationship.

Both sides are seeking – are likely going to finalize the details for the meeting at APEC after they see all the meetings wrap up this week. But it’s likely that both have reserved substantial time for in-depth discussions between the two presidents.

If we take the Bali November 2022 meeting as an example – the two presidents then met for three hours – we should expect something of a similar substantial length. We expect the two sides to discuss a range of bilateral, regional, and global issues. Managing Taiwan is likely to be top of the agenda for China and China may also seek additional reassurances from the United States.

We also expect a host of other issues to be discussed including, of course, economic and financial issues; resumption of travel between the two countries; efforts to strengthen people-to-people ties; as Victor mentioned, military-to-military dialogue; cooperation on climate change; the situation in South China Sea/East China Sea. The United States has also been consulting with China on global issues including the war in Ukraine, dynamics on the Korean Peninsula, as well as what’s happening with respect to the Israel-Hamas war.

I don’t think either side are expecting major deliverables but we have seen progress in the past weeks and months on improving travel and people-to-people ties between the two countries. We are also seeing improved signs for military-to-military engagement and that will be one thing to look forward to, to see if we see that China may reverse the U.S.-China mil-mil meetings that they cancelled or suspended after last August 2022.

Let me wrap up here, and I know there are still a number of items that can be covered including other potential deliverables, which I’ll leave to my colleague, Jude. Thank you.

Ms. Montfort: Thank you so much, Bonny.

And now I’d like to introduce Jude Blanchette. Jude holds our Freeman Chair in China studies here at CSIS. Jude, take it away.

Jude Blanchette: Well, thank you. Thank you. It’s great to join the call as well.

I wanted to offer some high-level thoughts. I’ll try not to cover the same ground as Bonny but let me give a few thoughts about why I think Beijing is interested in a meeting.

Obviously, the deterioration of U.S.-China relations from the Beijing perspective has been driven primarily by the United States. This became clear when Chinese leader in March – Chinese leader Xi Jinping in March said that he thought the United States was encircling, containing, and suppressing China.

None of that skepticism about the broader trajectory of U.S.-China relations or, indeed, a fundamental diagnosis of U.S. intentions or policy has fundamentally changed in Beijing. It’s clear that the Xi administration still brings a high degree of skepticism and concern about what they see is the shifting nature of U.S. Indo-Pacific strategy and policy.

So it raises the question of, well, what’s the interest in China in this meeting. I think the administration here is quite clear and sober about the likely outcomes of the meeting. They’ve been working hard to lower expectations. I think you’re seeing something similar on the Chinese side.

And I think because the administration here knows that China is coming to this, largely, for tactical reasons there’s a few issues that Beijing would like to center in the discussion and sees this as a good opportunity to do so.

As Bonny mentioned, the upcoming Taiwan election is going to be a key point for Xi Jinping and his team in these discussions. They’ll likely be pushing the administration and President Biden specifically to make some public comments on Taiwan.

Maybe this is a declaration consistent with long-standing U.S. policy but still some sort of language about not supporting Taiwan independence. But I think the administration would be hesitant to do anything like this, given that we are about two months away from the Taiwan election.

The second issue that Beijing wants to center the discussion would be technology. It’s clear that they’re coming to understand that the Biden administration is pursuing a path that is probably even more aggressive than the Trump administration in terms of its sophistication, breadth, and scope of some of the technology restrictions that they’ve been applying to China. And so Beijing sees the upcoming meeting as an opportunity to try to shift the trajectory, or at least find ways to put brakes on the pace of U.S. actions.

I think they’re going to be disappointed. I think this will be one of the issues where the U.S. and China will have longstanding tensions. And I’m sure this will be communicated to Beijing. But still Beijing is hoping to use the meeting as a platform to make its concerns known.

And then the final tactical consideration would be economic factors. We’ve moved on pretty significantly from the chorus of voices in August who were pronouncing about an impending collapse of the Chinese economy. The Q3 numbers have shown some degree of stabilization in China, but it’s still true that Beijing is trying to reset or shape market expectations and business confidence about the Chinese economy.

So we’re going to see next week a series of high-level engagements between the Chinese and U.S. companies and investors, trying to send a signal that China’s open for business, but also trying to send a signal to the global business environment that China is seen as attractive, as evidenced by these companies flocking to meet with Xi Jinping and have dinner with him. So tactical reasons Beijing wants this. I don’t think, at a broad level, they’re expecting or see the prospect of resetting or recalibrating the relationship.

And I’ll just end by agreeing with what Bonny said, that the real question, I think, for many of us is after APEC, then what? Looking the year ahead, and also looking at the geopolitical landscape, ongoing war in Ukraine, rising tensions in the Middle East, our own elections, elections in Taiwan, this is going to be a busy geopolitical year. And none of these flashpoints or potential flashpoints will do much to strengthen the U.S.-China relationship. If anything, I think it’s likely that they will certainly strain them.

So Paige, over to you.

Ms. Montfort: Thanks so much, Jude.

Next up we have Erin Murphy. Erin is a senior fellow with the CSIS Asia Program.

Erin, please go ahead.

Erin L. Murphy: Thank you, Paige.

 I’ll take you over to the Southeast Asia side with the Indo-Pacific Economic Framework. Of course, there’s the China angle, so I’ll continue to capture your attention, because I know that there’s much more focus on the China stuff. But Southeast Asia and IPEF matter, too.

But for APEC, there is still a strong economic angle here. And so the IPEF signatories are also going as APEC members as well. But I think one of the big deliverables that the Biden administration wants to have here is the conclusion of the framework for IPEF. So really what we’re going to see is really three of the four pillars of IPEF really be solidified here.

The USTR connective economy, which is really the trade pillar, is, I think, going to be kind of sort of done, but there’s still a lot of work to be done, especially around the digital-trade aspect. And that’s not so much because there is disagreement among the signatories, but I think there’s still a lot of disagreement back here in the U.S. as to how this should look going forward.

But the Commerce-led pillar is including on supply chain, infrastructure and clean energy and taxation, anticorruption. There’s widespread agreement among the signatories, and, of course, on the U.S. side. So that’s going to go forward.

I think one of the biggest – I mean, there’s still a lot of skepticism and, I think, cynicism around IPEF and what does this deliver, especially when there’s no market access. And, you know, I think those criticisms are quite fair. But I think that there are some big wins here that can be shown, including on the supply-chain agreement that was negotiated a couple of months ago. This is the first major multilateral agreement on this.

I think you’ll see some announcements around the energy transition and maybe some announcements around the just-energy transition and maybe some projects, especially as it relates to Indonesia, Vietnam, and the Philippines, where they’re really looking how to transition to more clean-energy sources. The Philippines is in a bit of an energy-security crisis, especially when it comes to limited gas output in its gas fields. Indonesia is looking to transition from coal. And Vietnam is looking for a more stable baseline and foundational energy source while it tries to boost its renewable energy sources in wind and solar.

So IPEF is going to be the big, I think, focus in terms of that. But there’s also just bilateral and I think multilateral ASEAN-focused pieces as well. And that will continue after APEC, especially on the Indonesia front. There’s going to be a Jokowi visit. And Jokowi is also pushing – or Joko Widodo – this will probably be his last visit to Washington as president. There will be an election in Indonesia. And Indonesia is pushing for critical minerals aspect to be included in IPEF, or at least to be negotiated among major partners. Indonesia has many critical minerals in its lands, including nickel, and wants to start including an agreement or a framework within the IPEF pillars, or at least an agreement more broadly as to how to start the processing, having more resilient supply chains around that. So I expect that Indonesia will be pushing for that more broadly. Perhaps there will be an announcement on that.

Vietnam, I think, has already had a great year with the U.S. They made major gains during the Biden visit in September, especially around semiconductor work, promises for workforce enhancement, investments in Vietnam semiconductor investments. I think one country that will also see a major win on the bilateral front, but also within the APEC and the IPEF front, they’re a signatory to both or member of both, is the Philippines. They’ve made some interesting moves in the last couple of weeks. They’ve cancelled some BRI projects. So I think you’re going to see the U.S. try to shore up support for Marcos. And whether that comes in the form of projects or major announcements, more defense supports. So I think that the Philippines may come out as a bigger winner from any bilateral meeting.

And Thailand, being the next APEC host, I expect some handoff, some – perhaps some announcements coming out of that as well. They’re a treaty ally. There’s new government. So expect to see some supportive statements coming out from the U.S. for that. But IPEF will be the bigger focus, I think, especially on the economic front. You know, CPTPP for the Chinese and Taiwan, I guess, are looking to move forward on that. So the U.S. has to really make IPEF look like it’s a serious economic agreement. And this is one of the most major summits where they need to show the conclusion of 18 months of work. And it’s not a binding agreement. And they need to show the signatories that there’s going to be momentum going forward and that in the next year, the last year of at least the first term of the Biden administration, that they’re going to be – that this will continue.

So I’ll leave it there and answer any questions that you have. Thanks.

Ms. Montfort: Thanks, Erin. We also have with us Dr. Charles Edel, who is a senior advisor and the inaugural Australia chair here is at the Center for Strategic and International Studies.

Charlie, the floor is yours.

Charles Edel: Great. Thanks very much, Paige. And good to hear all my colleagues here weighing in.

As Australia chair. I thought I might discuss the Australian angle here. At APEC, Australia’s goal is to keep the U.S. engaged in the Indo-Pacific and push for more American economic interaction with the region, particularly when it comes to some of what Erin was just describing – digital economy and infrastructure building. APEC offers a platform for discussing that. The United States hosting APEC is a significant demonstration of attention to the region and, from an Australian perspective, the other noteworthy consideration here is Prime Minister Anthony Albanese’s recent travel schedule.

He was just in Washington for an official state visit. He then traveled onto China and is now in the Cook Islands for the Pacific Island Forum leaders meeting. Then, after less than a week at home, he’ll fly to San Francisco for APEC, which will be his second trip to the United States in less than a month. Albanese’s travel to China is particularly noteworthy because it’s the first time an Australian Prime Minister has been in China since 2016. That’s largely because Australian-Chinese relations took a nosedive seven years ago or so. This stemmed from Australia’s decision to ban Huawei from building their 5G architecture, from China’s attempts to interfere in Australian domestic politics, and threats by the Chinese government to the Chinese diaspora community in Australia. That deterioration accelerated further when the Australian government called for an international investigation into the origins of COVID-19 in 2020. Incensed by this, Beijing sought to punish Australia by levying tariffs and unofficial trade barriers that were estimated to cost Australian exporters up to 20 billion Australian dollars a year for products such as coal, wine, beef, barley, and lobster.

But Australia now, like many other countries, is trying to find a better settling point with China. Since coming to power in May 2022, the Labour government has talked about stabilizing relations with Beijing, insisting that while it is not going back to its previous policies it wants to find a way to meet more regularly with the Chinese government at all levels. In fact, the Australian government’s formulation of cooperating with China where it can, disagreeing where it must, and engaging its own national interests does not look all that different from the United States’ stated policy.

I would underscore two particular things here.

The first is Australia is not the only country attempting to figure out how to engage a more authoritarian, more closed, and increasingly more aggressive China, and the Australian example is quite instructive. Taking a principled stand against coercive behaviors can have effect if it is bipartisan, as it has been in Australia. We have seen Beijing reverse its aggressive actions without any Australian promises of changing its security settings or backing down from taking principled stands on issues. I think this is actually quite a powerful model for other mid-sized countries as they calibrate their relations with Beijing.

The final point I’d raise is that Australia is out of the freezer, and diplomatic and commercial relations with China are thawing. What comes next, and what are the contours of economic and political and security relations with China, very much remain a work in progress.

I’ll pause there and hand it back to Paige.

Ms. Montfort: Thank you, Charlie.

And finally, I’d like to introduce Nicholas Szechenyi. Nick is a senior fellow with the CSIS Japan Chair and he’s also deputy director for Asia here at CSIS. Nick, please go ahead.

Nicholas Szechenyi: Thank you, Paige. Pleasure to join you all. And you’ve all been very patient, so I will try to be brief and just share a few observations given that this is the 30th anniversary of the first APEC leaders’ meeting.

I’d start just by noting how much the U.S. approach to APEC has changed over the years from my vantage point. Early on, the primary motivation for the U.S. was to prevent the formation of an Asian economic bloc that excluded the United States. And the primary driver for the U.S. was an ambitious agenda for trade liberalization, the idea being that through a competitive process of trade negotiation, ultimately, the region could aim towards a large multilateral agreement, which at the time was referred to as FTAAP, the Free Trade Area of the Asia-Pacific. Allies like Japan, interestingly, at the outset were more focused on using APEC as an arena to promote economic development and an arena for achieving consensus on issues the countries in the region were focused on, and was not so focused on trade liberalization.

But, my, how times have changed. You know, fast-forward to today; last year, Thailand, as the host of APEC, revived the FTAAP concept and said it should be revisited. Japanese interlocutors frequently come to the United States, and you know, the first or second talking point you hear is that the United States should return to CPTPP and embrace a process of regional trade liberalization. And in contrast, U.S. economic strategy is deemphasizing market access, which remains a primary interest of our allies and partners in the Indo-Pacific, and trying to identify other issues – including the digital economy and a range of initiatives that are – that are outlined in this year’s APEC agenda – to try to demonstrate that the U.S. still has leadership credentials on economic policy in the region.

But there’s still a disconnect. Our allies and partners want market access, and they want trade liberalization. But the U.S. is not in that game anymore. And so there’s kind of an ironic reality where a process for regional economic integration is advancing through various multilateral trade agreements, and the U.S. is on the outside looking in and trying to come up with an agenda to demonstrate its leadership credentials on economic matters.

It’s important to note, though, that APEC is not a negotiation arena, per se. It has a long and proud history of operating on consensus and coming up with nonbinding initiatives to promote economic cooperation in the region. The Biden administration has embraced that, with a range of initiatives. And there’s definitely value in using multilateral forums, like APEC, to identify an affirmative agenda for economic dialogue with a range of countries in the region.

But I would just conclude by saying it seems difficult for the United States to credibly emphasize themes such as inclusiveness, interconnectedness – the themes of this year’s APEC summit – when the primary driver for U.S. economic strategy in the Indo-Pacific is not economic cooperation, necessarily, but rather economic competition. U.S. strategy is very much focused on economic competition with China and minilateralism, where the U.S. can work more closely with likeminded countries on concrete agendas. IPEF negotiations on the sidelines of the APEC summit being a perfect example.

Not here to debate the legitimacy of those objectives. They reflect realities in the international system. But I think a big challenge for U.S. strategy going forward is this inability to talk openly about trade liberalization and how it contributes to regional stability and prosperity. And I think that could be the biggest takeaway from this APEC summit, talking about a range of economic issues but the U.S. being very far removed from the original objective, which was to be a leader on regional trade.

I’ll stop there, thank you.

Ms. Murphy: Hey, Paige? This is Erin. I just want to correct something that I said before, as Nick triggered my memory. I think I said that Thailand is the next host of APEC. It is Peru. I’m getting things mixed up. So Thailand was our predecessor, but I think, you know, will still – the U.S. will still highlight, you know, Thailand’s – the thread that runs through Thailand, U.S., and what Peru will accomplish next. So, anyway, sorry about that, folks.

Ms. Montfort: No problem. Thank you so much, Erin, for the correction. And thank you, Nick. And thank you to each of our other colleagues who spoke earlier on the call.

Now I’d like to turn it back over to our operator so we can open it up to questions at this time.

Operator: (Gives queuing instructions.)

And one moment for our first question. Our first question comes from the line of Shaun Tandon from AFP. Please go ahead.

Q: Hi, everyone. Thanks for doing this call.

I know there’s so much to talk about, particularly on the U.S.-China side. I wanted to ask you one thing about that, but a bit more broadly. In terms of this being the forum for a presidential summit between Xi and Biden, what does that say? What’s signal, if anything, do you think – do you think that sends? I mean, having this in the context of APEC, in the context of U.S. allies being there, does that have any significance in itself there? And also, I wanted to ask you about – I know it’s not something that’s on the agenda, per se – but obviously there’s a lot of attention right now to the Gaza war, Israel, Hamas. To what extent do you think that could be a distraction or in what way do you see that? I know that Anwar Ibrahim, for example, in Malaysia, you know, had some pressure not to come, but is coming. To what extent do you think that could be a factor one way or another, or not, in this? Thanks.

Ms. Montfort: Thanks, Shaun.

I’m not sure, Jude or Bonny, if you would like to take on the first question and then open it up for the second one?

Mr. Blanchette: Sure. I’ll offer a thought and then curious what Bonny thinks.

 It’s a good question on the venue. I think the venue is more a reflection of some of the challenges in the relationship and it was the fact that there was on the calendar a readymade opportunity for the two to have a side bilateral meeting rather than having to have a – some sort of state visit, which I think would have been too complicated and politically challenging for both Beijing and Washington.

So open to other interpretations but I think this is more – this is more indicative of how much the – amongst the many tensions in the relationship but a proximate event like the spy balloon earlier this year plus sort of tensions in and around Taiwan and other things made it difficult to even think about getting on the calendar a state visit. So it’s instead using these readymade opportunities.

Does allies and partners there help? Yes, but I would say I think there’s such a focus both in Washington and Beijing on the bilateral itself that some of the frustration you’ve been hearing from other APEC members is the fact that what should be a high-level focus on APEC has now become to some extent feeling like a sideshow to this meeting with Biden and Xi.

But I also think at the same time almost every APEC country who is attending this is relieved to see that the meeting is going ahead. Even countries in the region who are extraordinarily worried about China’s increasing aggression still have deep economic inter-linkages with China and at the margin would vastly prefer a stable U.S.-China relationship to an unstable one.

Dr. Lin: Thanks, and I’ll also jump in here. This is Bonny.

I completely agree with Jude that the benefit of having APEC is it’s not a state visit, and I would also note that when we think about if we do have another opportunity for the presidents – the two presidents to meet, which looking at the political calendar seems a little bit difficult for 2024, the reciprocation of that would probably be another meeting – or the continuation of that would be another meeting potentially on the sidelines of a multilateral organization meeting.

So if it was a state visit – for example, if President Biden was to host President Xi I think there would probably be some expectation either on one side or both sides for President Biden to visit China. I think the way that this meeting is handled is there are no – we’re not creating new expectations of either side moving forward.

On the Israel-Hamas conflict I think your question was whether that is a distraction or impacting – significantly impacting negatively U.S.-China relations, if I understood that correctly.

I think right now we’re not seeing China – we’re not seeing China on the diplomatic front do too much to – whether that’s try to rein in Iran or take – engaging in a significant effort to be very active in trying to prevent the conflict from spiraling.

We are seeing some discussion, some narratives, coming domestically from China that are not helpful, some narratives that are siding more with the Palestinians and blaming – also narratives blaming the United States as starting – as stoking this conflict. But those narratives have been – we haven’t seen that on the official level from the – from Chinese diplomats so at least at the official level they’ve been relatively careful.

I think this is something that we need to watch and, at the end of the day, regardless of what narratives we see from China it does seem to me that China’s broader interest in the Middle East is aligned with that of the United States. China imports 50 percent of its oil from the region and generally would prefer more peace and stability in the region than a region that is marked by conflict or wars.

Dr. Cha: Hey, this is Victor. Let me just add a couple of points.

The first is that I think – you know, I think that this meeting – and my sense is it’ll be a pretty substantive set of conversations – you know, will reach – at least make small steps in these two directions on sort of military-to-military crisis-hotline discussions, as well as on the narcotics issue. And I mean, that will have ripple effects, because I think it will then give a sense to other countries in the region that there is some balancing out of the relationship now and will also, I think, cause them to be solicitous of their efforts at trying to restart summitry with China. So I would certainly expect the Japanese and the Koreans to try to find a way to have conversations about doing the Plus Three, ASEAN Plus Three, summit meeting.

And then on the Hamas-Gaza issue, I think it’s almost impossible for the APEC leaders’ statement not to make some sort of reference to this, given what is happening in Europe and in the Middle East. But I think, as one colleague said earlier, you know, there is – there are differences of views on this. And so I think the statement will, you know, frankly, be quite bland if there are any overarching statements. As a group, it’ll be quite bland.

But as I said in my opening remarks, there may be opportunities where a subset of the APEC group, like-minded countries, might make more forward-leaning statements about these two wars.

Back to Paige.

Ms. Murphy: Hi, Shaun.

Ms. Montfort: Thank you so much.

Ms. Muphy: Hey, Paige –

Ms. Montfort: Go ahead, Erin.

Ms. Murphy: Yeah. Just to weigh in on Malaysia and Indonesia, you know, I think, as Muslim-majority countries in Southeast Asia, they obviously have very strong views, Malaysia more than others. Anwar has already rejected U.S. sanctions. They’ve long advocated a two-state solution. They don’t have diplomatic relations with Israel. And Anwar has already come out and said that they would support a case against Israel in the International Criminal Court and have opposed statements supporting Israel settlements in Palestine. So I think it’s going to be really hard to get them on board with any statement.

But Malaysia has typically been on a pretty anti-Israel bent for a long time. Anwar at least has not made the virulent antisemitic statements that you used to get from Mahathir. So that’s at least a step in the right direction. But I think Malaysia, more than Indonesia, are less diplomatic on this.

Indonesia – you know, SBY wanted to solve the Middle East crisis during his term. They are very aspirational on this side. But I think that they want a diplomatic solution. They’ve called on the U.N. – a U.N. solution; called for the war to be stopped. But they’ve also pointed that the root cause is by the occupation of Israel in Palestinian areas. So that’s not helpful as well. I would think that the Biden administration would try to caution them to tone down their language on that and, if not be supportive of Israel, but at least try to see their side of things as well.

But Malaysia will be the least helpful of the two. But I think it will be problematic in terms of getting a statement going forward, as Victor said.

Over.

Ms. Montfort: Thank you all so much. And we will go on to our next question.

Operator: Our next question comes from the line of Colleen Long from the Associated Press. Your line is open. Please go ahead.

Q: Hi. Thanks for doing the call.

I wanted to see if you guys could talk a little bit about what the behind the scenes looks like on setting up the meeting like this between Biden and Xi. You know, I know there’s a really careful sort of dance that goes on when trying to decide how formal it is or how not formal it is, and just sort of in your experience dealing with these particular types of diplomatic meetings, not necessarily this one in specific, because perhaps we don’t know what’s going on behind the scenes. But I just wondered if you could talk a little bit about the mechanics of setting something like this up generally.

Ms. Montfort: Thank you so much.

I think we have a few folks on the call who could provide some insight here. Perhaps again I’ll turn it back to Bonny and Jude to start us off.

Mr. Blanchette: I might recommend we have Victor pick this one up, having been the one doing this the longest.

Ms. Montfort: Sounds great.

Dr. Cha.

Dr. Cha: Yeah. So I think you’re right in that this is a little bit different. The circumstances of this are a little bit different. Generally, these sorts of meetings are actually quite routine on the sidelines of APEC or the G-20. You know, they are – you know, they – it’s a logistics nightmare, because they’re happening in hotel rooms that are very crowded. I mean, like, in hotel meeting rooms, conference rooms, on the sides that are very crowded. Of course, for the U.S. president, the logistics tail and the security tail is so long that it makes it even more of a logistics nightmare.

But in terms of the substance, you know, they’re very – they’re very clearly substantive meetings. And I think this one in particular – I mean, we call them side bilats, but this is far more than a side bilat, as Jude and Bonny have said. I mean, this is a – in many ways, given the state of relations, China – normally, if they come to United States, they want everything. They want all the pomp and circumstance. They want the highest possible respect that can be paid to them when they come for these sorts of meetings. Given the overall state of the relationship, as I think, either Jude or Bonny said, that is politically not possible. And so having APEC in San Francisco solves that problem, in the sense that it’s not the official White House that’s hosting the meeting.

You know, I expect the exchanges to be quite deep, and substantive, and long. And so this would be – if this were being held at the White House, it’d be the equivalent of sort of a working level – a working-level meeting. But – (laughs) – they are a nightmare to plan on the sidelines of these big meetings, where everybody – you know, often everybody wants a meeting with the U.S. president. I remember when Obama first went to APEC, his first trip to Asia – Obama’s first trip to Asia was APEC in Singapore. And every possible leader in APEC wanted a meeting with Obama because he was a rock star, and he was, you know, framed as sort of the first Asia-Pacific president, with Asian heritage, having grown up in Asia, having grown up in Hawaii. So that, you know, that was an extraordinary case.

And often these things have to be pared down because there’s not enough time or space to do all these meetings. But I think as, I think, Erin said, like, I mean, this is the main event, if you will, at APEC this year. And at the same time, while it may distract from APEC, hopefully it won’t distract from efforts to round out IPEF, as Erin said. I think countries in the – APEC members are also glad that it’s happening, right, because they’re concerned about sort of the spiraling of the U.S.-China relationship.

Dr. Lin: If I could also jump in here for a little bit in terms of how we got to here, we talked a little earlier about the string of meetings that had to occur both in terms of U.S. high level visits to China, as well as what we’re seeing in the past couple of weeks, the Chinese reciprocation of those visits through – whether that’s Wang Yi, Xie Zhenhua, or He Lifeng coming to the United States. My understanding is that both sides want to understand how this meeting might progress. And that’s why a lot of the issues are actually already being discussed at lower levels before the two presidents meet.

I think at least one – from the Chinese side, for Xi Jinping to come to United States, even if it’s at the side of APEC, there is some political risk that he is taking. And I believe why we saw – why we heard Wang Yi say in late October that things would not – we should not assume that the meeting would be automatically on, was that there’s still some hesitation on the Chinese side. But the signs that we are seeing now indicate that Xi is likely to come, and that both sides are relatively confident that the meeting will occur.

In terms of what happens in the background, in addition to what Victor mentioned, there’s probably already some pre-agreement on no large joint statement, which usually takes weeks if not months to negotiate in advance. And there’s probably also very detailed planning of the actual choreograph of who enters a room where, if there will be pictures taken, and all of that.

Ms. Montfort: Thank you so much, Bonny and Dr. Cha.

I would love to move on to the next question just in light of time, because I know we have a lot of folks in the queue here.

Operator: Our next question comes from the line of Anton La Guardia from The Economist. Your line is open. Please go ahead.

Q: Thank you very much for doing this. It’s been very interesting.

I wanted to ask you on the specifics of what would constitute a successful summit. What should we be looking out for as a kind of sign that things are making progress or things are not making progress between America and China?

And then I also wanted to pick up on Shaun’s question about the impact of the Middle East. I understand it will be very difficult to get an agreed text out of this, but nevertheless I was wondering whether you had any thoughts on how the Middle East conflict affects the geopolitical balance in the Indo-Pacific. In other words, are allies, for example, worried that America is distracted by another crisis on top of Ukraine? Do the Chinese see an opportunity because they think America is now weakened? Do other would-be allies worry that, you know, the United States is locking itself into an unpopular position in defense of Israel in giving it as much time as possible to try to crush Hamas? Any thoughts on that would be really useful. Thank you.

Ms. Montfort: Thank you. Great questions, Anton.

Who would like to start off there?

Mr. Blanchette: This is Jude. I can offer a few – (clears throat) – excuse me – initial thoughts. And great question.

The administration is trying to intentionally keep that bar low, such that the – there’s not too much focus or a high expectation in terms of what comes out of the meeting, any grand bargains on the big issues. I think success would be defined as, you know – as Victor and Bonny and others have mentioned, there are going to be a set of tangible results that come out of this in anti-narcotics, you know, military-to-military dialogues, new working groups on climate, some new mechanism or track 1.5 on AI and technology. So there will be things coming out of this.

I think, really, if the meeting goes off without a hitch – most importantly, coming out of the meeting and the statement that both sides would put out, a framing of the challenges that the relationship faces but also the opportunities for the two to work together. Because, as Bonny mentioned, really what’s going on here is an attempt to have a deep conversation where the two sides directly share their concerns, but more importantly that the meeting unlocks, especially in the Chinese system, space for further engagement in constructive work. That’s where the visuals that China puts out from the meeting will matter. The types of messaging and propaganda – which I use in a non-pejorative sense, but simply to describe the types of formal messaging that come out from People’s Daily, Xinhua after the meeting – is designed and will be there to essentially send a high-level signal to the entirety of the Chinese political system that, yes, I know I said the United States was containing us in March, but we still have – we still have work to do together. So I think that would be sort of one definition of success, if the meeting can achieve that.

I think the more important thing, though, is, you know, we – like Zhou Enlai said about the French Revolution and it being too early to tell if it works, I don’t think the immediate moments after this side bilateral will be the time to say it was, quote, a “success” or “failure.” We’re at a pretty low point in the relationship. This is the – you know, this is the top of the second inning, and this is about trying to make sure that we don’t have a back-to-Bali sort of experience where you have a high-level bilateral meeting which is then – no pun intended – blown off course because of a contingent event. And of course, if we think about, you know, whether it’s the Second Thomas Shoal or the Taiwan election, there are a number of contingent events which could come up. And I think both Beijing and Washington want to create some sort of détente understandings to where they can communicate directly and effectively such – (audio break) – do not bring tensions, but they don’t blow the whole thing off course.

Dr. Lin: If I could add a little bit on the mil-to-mil side – military-to-military side – I would be really, really looking forward to see if some of the canceled dialogues from August 2022 are back on the table. And two of them are particularly important.

One is defense policy coordination talks. That’s a DASD-level discussion that we have with the Chinese that determined the U.S.-China military-to-military agenda for the entire year. So having that back is critical for a stable military-to-military relationship.

The other is the U.S.-China Military Maritime Consultative Agreement, MMCA. That’s a dialogue between operators to discuss incidents at sea and in the air.

If we at least have those, as well as some of the other cancelled mil-mil, that would – that would be a signal that the two sides can work together more on the military side – I’m sorry – in terms of preventing incidents on the military side. It would also provide our operators with a critical channel of communication with the Chinese to deal with these increasing risks of what we see as unprofessional, risky, and coercive Chinese behavior in the air and at sea.

Ms. Montfort: Thank you so much.

Did anyone else want to jump in on Anton’s first or second question before we move on to our next? OK, great. Thank you.

We will go on to our next question. I’d love to get in two or three more before we wrap up today.

Operator: Our next question comes from Morgan Chalfant from Semafor. Your line is open. Please go ahead.

Q: Thanks so much for doing this.

I just had a quick follow up on the mil-to-mil channels. Just, like, can you talk about how optimistic you are that there will be progress? And also, how do you see the dismissal of the defense minister impacting any progress that we could see at APEC?

Dr. Lin: Sure. This is Bonny. I’m relatively optimistic, mainly because we’ve already started seeing signs of resumption of U.S.-China mil-mil, not only at the working levels, which we’ve actually had throughout most of – since August 2022. So in August, we already saw that the Chinese were willing to send a delegation to INDOPACOM commander Admiral Aquilino’s Indo-Pacific Chiefs of Defense Conference, that we co-hosted with Fiji. And we also saw that for a long time, because a DASD Mike Chase, had visited Taiwan, the Chinese side had frozen contact with him. But now they are willing to engage him. The invite from the Chinese side to Secretary Austin to attend the Xiangshan Forum is also a good sign. Secretary Austin wasn’t able to attend, but the Department of Defense did send a representative there.

I would say that the departure of Chinese Defense Minister Li Shangfu is probably a positive for U.S.-China mil-mil, because now we no longer have a Chinese defense minister that is sanctioned by the United States. So whoever replaces him, we don’t – we don’t quite know yet, but it’s possible that he will – or probably he, not a she – will not be sanctioned by the United States. And there’s more prospects for engagement at the higher leadership level.

Ms. Montfort: Great. Thank you, Bonny.

And we’ll go onto our next question.

Operator: Our next question comes from the line of Gavin Bade from Politico. Your line is open. Please go ahead.

Q: Hi, everyone. Thanks for doing this call.

You know, in recent months we’ve heard the Biden administration in its international economic agenda shift from conversations of trade to conversations of investment. You know, trying to get private capital off the sidelines to work on big infrastructure projects – like support for dams, almost like a Belt and Road Initiative, but Western-led. I wonder if you have any expectation for that international investment agenda coming out of the summit. You know, we’ve heard a lot of that going in, in conjunction with the IPEF talks. But I wonder if anyone has any insights on that subject?

Ms. Montfort: Thank you, Gavin.

Erin, would you like to start?

Ms. Murphy: Sure. You know, I think that this investment side has been a key piece of the Biden administration, this effort to mobilize private sector capital especially in low- and lower-middle income countries. Partly to counter BRI, to have an effective alternative. You’ve seen this in the announcements with the Partnership for Global Infrastructure Investment, which was the G-7 announcement. It was formerly known as Built Back Better World. And since then, there’s been – and also, like, with the Quad, and there’s been a Quad investment initiative. There’s been several announcements for major investments in Southeast Asia, whether it’s – and India, throughout the Indo-Pacific.

So in APEC, there’s going to be a CEOs meeting. And so far there has been, they’ve said, hundreds – I’m not sure if it’s hundreds or hundred – of CEOs that will be going to the CEO meeting. I think it’s going to be the most widely attended CEO meeting in quite a while, if ever. And I think that’s part of that effort to push for investment overseas, but also to draw investment in the United States. There’s still that push of a two-way investment and drawing investment and critical infrastructure in the United States. But especially overseas, to push for that countering BRI in quality, values-led infrastructure. Not just in ports in airports, because those projects are really patient capital. They take a long time to do. And unfortunately, you know, don’t make the news cycles when you want them to.

But the Biden administration also includes efforts in energy, in climate change, telecom, gender-related infrastructure, health care. There have been a lot of announcements around vaccine production, not just on COVID but also COVID, as part of the health care infrastructure. So I think that you’re going to see a lot of movement on that. There has been already. So I think that APEC is an effort to push for that, not only in IPEF, especially in the pillar around decarbonization, but also in APEC as well. There has been a lot of movement. I think climate is one of those threads that carries both through IPEF and APEC, and is certainly important for the Latin American members of APEC as well as the Indo-Pacific members.

So I think that you’re going to see a lot more of that on the investment side. I mean, trade is certainly – or, what accounts for trade in the Biden administration. But the investment piece is certainly a big part of that, and how the appropriate financial tools, whether it’s the U.S. International Development Finance Institution, or USTDA, or Ex-Im, how you can de-risk these investments to really mobilize that private sector capital. And I think you’re going to see a lot of conversations and initiatives come out of APEC, including the CEOs meeting. So I’d stay tuned for that. Thanks.

Ms. Montfort: Thank you, Erin.

Nick or Charlie, do you have anything you’d like to add on that one?

Dr. Edel: I’ll just pop in for one second and just say that this actually builds off of a lot of what we saw in the Australian state visit just a week and a half ago, where we saw several announcements with resources with infrastructure behind them. Everything from the undersea cable that Google is undertaking that will kind of run spurs to eight different Pacific Island countries, in which both Australia and the United States are supporting, to a doubling to 4 billion Australian dollars of what the Australians are putting in to support the critical minerals sector, to the $5 billion investment – U.S. – by Microsoft into Australia to kind of help amplify, you know, research and development in both AI and in cloud computing. So the idea of putting resources to some of these projects, bringing in the private sector is something that will clearly be on the agenda. It’s always on the agenda. But there’s actually some momentum coming out of, I think, what we’ve seen in Washington over the last couple of weeks.

Thanks.

Ms. Montfort: Thank you, Charlie.

And let’s do one more question briefly here before we wrap up, please.

Operator: Our next question comes from George Condon from the National Journal. Your line is open. Please go ahead.

Q: Great. Thanks.

Biden talks a lot about his many past meetings with Xi. How would you characterize the personal relationship? And does it even matter?

Ms. Montfort: Thank you, George.

Who would like to start off with this one?

Dr. Lin: Happy to jump in. I don’t know if Jude is still on the line since we’re a little bit past noon.

I mean, the two of them, as you noted, have had a long history of relationship, including when – before either of them were president. I guess what I would note is that, as Jude had mentioned earlier, Xi Jinping is coming to the United States entering this meeting with President Biden after having a – after the two sides had a meeting in Bali last November. And during that meeting, the two sides both left the meeting thinking that they had an excellent in-depth exchange, and then, at least from the Chinese side, their assessment was that the United States did not hold up to what they thought we agreed to.

So regardless of how long that history is, China is entering this meeting recognizing that the United States and China have quite different views on a range of issues, including Taiwan, as well as most, actually, hard national security issues, as well as major differences on technology. And regardless of whatever personal relationship the two presidents have, it’s unlikely that either side will necessarily be willing to change our policies or be willing to concede or give much ground on issues that we are – we have long stated that our position is. So I don’t – I don’t see that – the personal relationship between the two leaders as having too much of an impact on this meeting because I feel like, at the end of the day, what both leaders are coming into are different interests as well as, to some – to some extent, a level of distrust that both bureaucracies had been working to try to address in the months and weeks leading up to this meeting.

Dr. Cha: So, Paige, this is Victor. Let me just add to what Bonny said.

I think Bonny is absolutely right. I mean, they do have a relationship but as Bonny said it goes back to when Biden was vice president. I remember and actually was involved in efforts by the Obama administration to try to get then Vice President Biden out to China to actually spend some time with Xi Jinping as they knew that he would be the next leader, even going to the extent of trying to get the two of them to go to a Georgetown basketball game when Georgetown was playing exhibition games in China.

And, you know, I think Xi Jinping has heard all of Vice President – I mean, President Biden’s stories about Scranton, Pennsylvania, and about his father and about, you know, poetry and everything. But I don’t think we’re going to see a lot of that at this meeting.

I think, as Bonny said, it’s going to be very businesslike, very hardnosed, a lot on the agenda that they’re both going to be trying to work through. But at the same time, I guess talking is better than not talking.

Ms. Montfort: Thank you so much, Dr. Cha.

And I’d like to turn it over to Nick for a few quick remarks before we wrap up.

Mr. Szechenyi: Yeah. Thanks, Paige.

There were some questions earlier about whether the U.S. might be distracted by developments in the Middle East. We also heard about how allies in the region are working very hard to try to keep the U.S. engaged in the Indo-Pacific.

I think the biggest variable in all of this could end up being U.S. domestic politics. You not only have the debate in the Congress about aid for Ukraine and for Israel and for ongoing strategic initiatives in Asia but you also have the prospect right after the APEC summit ends of a government shutdown in the U.S.

So the question is really – for our allies in Asia I think the question is will dysfunctional politics in the U.S. really weaken the impact of initiatives like APEC which are designed to demonstrate consistent U.S. commitment to engagement in the region.

Thanks.

Ms. Montfort: Thank you so much.

Thank you, everyone. We’re going to stop the call there. I know we started a few minutes late so wanted to extend a bit at the end. I really appreciate all your questions and appreciate all of you who listened in. Terribly sorry that we were not able to get to everyone in the queue so please feel free to reach out to me, Paige Montfort, with any follow-ups. And thank you, of course, to my colleagues for your time, your insights, and expertise.

As always, we will be sending out a transcript from this call within just a few hours today. I’ll send it directly to those of you who RSVPed and it’ll also be posted publicly on CSIS.org. So have a great rest of your day, everyone, and thank you so much.

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