Takeaways from U.S.-China summit—Taiwan, military talks, fentanyl

BEIJING — U.S. President Joe Biden and Chinese President Xi Jinping have agreed to resume high-level military communication, according to both countries.

The two leaders met in person for the first time in a year Wednesday local time in San Francisco on the sidelines of the Asia-Pacific Economic Cooperation conference.

“We’re back to direct, open, clear communications,” Biden said at a press conference after the talks.

China has conducted military exercises around Taiwan, while its navy has been engaging in aggressive maneuvers in the South China Sea in a standoff with the Philippines as both countries stake their territorial claims.

The U.S. has wanted to revive the military communication, especially after some near-miss incidents where China’s ships almost collided with American forces.

“Vital miscalculations on either side can cause real trouble with a country like China or any other major country,” Biden said at the post-meeting press briefing.

China’s Defense Ministry declined a call with its U.S. counterpart in early February after the discovery of an alleged Chinese spy balloon over U.S. airspace. The balloon incident delayed U.S. Secretary of State Antony Blinken’s highly anticipated trip to China by more than four months.

In June, the defense chiefs from both countries attended an annual security summit in Singapore, but they did not have a formal meeting.

When Blinken finally visited China, he said he “repeatedly” raised the need for direct communication between the two countries’ militaries but failed to revive such talks.

China has yet to name a defense minister after dismissing Gen. Li Shangfu from the position without explanation in late October.

U.S. Secretary of Defense Lloyd Austin will meet with his Chinese counterpart when the Chinese defense chief is selected, a senior Biden administration official told reporters after the Biden-Xi summit.

As part of the agreement, senior U.S. military commanders including that of Pacific forces in Hawaii will engage with their Chinese counterparts, the official said.

The two countries also plan to establish ways for ship drivers and others to discuss incidents and, potentially, best practices, the official said.

A readout published by Chinese state media added the resumption of such military talks was “on the basis of equality and respect,” according to a CNBC translation.

At the presser, Biden reiterated the U.S. position that Taiwan maintains its sovereignty, despite China’s claims to the contrary.

“We maintain the agreement that there is a One-China policy and I’m not going to change that, that’s not going to change. That’s about the extent to which we discussed,” he said.

According to Chinese state media, Xi pointed out during the bilateral meeting that Taiwan has always been the “most important and sensitive” issue in China’s relations with the U.S.. He said in the report that China “takes seriously” positive statements the U.S. made during his meeting with Biden last year in Indonesia.

“The U.S. should use concrete actions to reflect its stance of not supporting ‘Taiwan independence,’ stop arming Taiwan and support China’s peaceful reunification,” state media reported. “China will ultimately be reunified and will inevitably be reunified.”

Beijing considers Taiwan part of its territory, with no right to independently conduct diplomatic relations. The U.S. recognizes Beijing as the sole government of China but maintains unofficial relations with Taiwan, a democratically self-governed island.

Chinese state media also said the two sides agreed to establish an intergovernmental dialogue on artificial intelligence, set up a working group on drug control, “significantly” increase flights between the two countries next year and expand exchanges in areas such as education, business and culture.

The U.S. senior administration official said the Chinese were already taking action on nearly 24 companies that make precursors for fentanyl — an addictive drug that’s led to overdoses and deaths in the U.S.

Biden said at the post-meeting presser that the two leaders agreed that fentanyl production needs to be “curbed substantially.”

On artificial intelligence, however, the official said it was too early for a joint declaration by the two leaders, and noted the need to prevent the incorrect use of AI in military or nuclear operations.

The Biden administration has announced export controls and sanctions on Chinese companies in an effort to limit U.S. companies’ contribution to technology that supports China’s military.

Xi noted the export controls, investment reviews and sanctions in the meeting, and called for the U.S. to lift the sanctions and provide a non-discriminatory environment for Chinese companies, Chinese state media said.

Biden also brought up difficulties around travel harassment of Americans in China, and a business environment that wasn’t as welcoming as it was in the past, the U.S. senior administration official said.

But overall the official described the meeting as more personal than the last time the two leaders met.

In a post on X, formerly known as Twitter, Biden called his day of meetings with Xi “some of the most constructive and productive discussions we’ve had.”

“We built on groundwork laid over the past several months of diplomacy between our countries and made important progress.”

— CNBC’s Christina Wilkie and Clement Tan contributed to this report.