President Barack Obama and China’s new president, Xi Jinping, will meet Friday at a sprawling California retreat for two days of talks aimed as much at fostering a rapport between leaders of the two global superpowers as at reaching agreement on a variety of crucial issues.
The meeting at an estate in the posh resort community of Rancho Mirage will cover economic and security issues, including North Korean aggression and cybersecurity – amid reports that Chinese hackers have gained access to U.S. weapons programs. It’s also being viewed as a starting block for developing a cooperative relationship in areas where the world’s two largest economies can find common ground.
“The White House always likes to say before meetings that it’s not about deliverables (concrete agreements), it’s about relationships. It happens to be true in this case,” said Jeffrey Bader, a senior fellow at the Brookings Institution who’s a former Obama administration adviser on East Asian affairs. “This really is about building a personal relationship between the two.”
The format of the meeting – a secluded setting at the sumptuous Sunnylands retreat of the late publishing magnate Walter Annenberg – is designed to give the two presidents more face time than they traditionally get in talks on the sidelines of international summits or during formal visits to each other’s capitals.
The meeting comes at the top of Obama’s second term and as Xi takes office, amid suspicions between two countries that view each other as global competitors, if not rivals.
Xi, who’s likely to lead China for the next decade, arrives in California after a swing across Latin America, a region vital to the U.S. economy and one where China plays an increasingly influential role: In Mexico alone, Xi opened his nation’s wallet to pledge better relations, offering $1 billion in credit to Petroleos Mexicanos, the state oil giant, and pledging $1 billion in trade deals.
There’s no expectation of breakthroughs on sensitive issues such as currency reform, human rights or cyberattacks. But Xi has talked of a new type of relationship between the superpowers and though U.S. officials are uncertain what it may mean, they’re encouraged that Xi – in at least one way – is unlike previous Chinese leaders, who’ve insisted that the first visit by a Chinese leader be a state visit, complete with the pomp of a White House welcoming ceremony.
“Part of the big story here is that he was willing to have a meeting in California, not in Washington, not a state visit,” Bader said.
The visit comes as the administration has sought to reassert an American presence in Asia, building coalitions with other countries in the region and prompting Chinese suspicions that the maneuvering is intended to blunt China’s economic and military rise.
The White House has sought to bolster ties with Xi, who met with Obama in the White House as vice president in February 2012 and whom Vice President Joe Biden visited in China.
White House officials noted that Xi has a link to Iowa, a state that’s important to Obama personally. During Xi’s trip last year, the Chinese official stopped in Muscatine, Iowa, where he’d spent two weeks in April 1985 with a Chinese delegation looking into farming technology. Obama launched his march to the White House by winning Iowa’s caucuses.
But considerable obstacles remain.
White House officials said Obama would raise the issue of hacking with Xi, emphasizing that it could damage U.S.-China relations and that the U.S. thought that governments were responsible for cyberattacks that came from within their borders.
China’s aggressive hacking into U.S. computer systems remains a chief sticking point between the countries, and they agreed ahead of the summit to set up a working group to hold discussions on cybersecurity. U.S. officials hope to make the issue a constant focus in the relationship, as are the economy and security.
Business groups have urged Obama to take a tougher stance against Chinese hacking, with the U.S. Business and Industry Council running full-page newspaper ads that accuse China of mounting an “all-out cyberwar against America” that costs billions of dollars and jobs. It chides Obama to resist “more chit-chat diplomacy.”
The Chinese government has denied official involvement in online hacking and said China itself was regularly subjected to such attacks. The Chinese also aren’t convinced that the U.S. has sufficient evidence that China is behind the attacks.
“This is a big ask by President Obama, in that he’s going to have quite a challenge to convince Xi that this is something he needs to go back and deal with,” said Bonnie Glaser, a senior adviser for Asia at the Center for Strategic and International Studies, a research institution in Washington. “When we talk about what are the measures of success, seeing some progress on this issue would be one.”
North Korea is also likely to be a top topic. Though Xi has signaled his displeasure with North Korea, closing Bank of China accounts at a North Korean bank, neither country has made any progress in convincing North Korea to veer off the path of developing nuclear weapons, Glaser said.
“We’re heading towards a North Korean ability to miniaturize a weapon and put it on an ICBM,” she said. “What can we do to prevent that from happening and if it does happen, how are we going to respond to it?”
The timing of the talks may be opportune, with the U.S. economy showing signs of recovery and the once-booming Chinese economy losing momentum, said Eswar Prasad, a former head of the International Monetary Fund’s China division.
“There is still a very large gap in the growth rates, but there is the subtle shifting of the playing field,” Prasad said, which gives the presidents a better chance at finding areas of agreement.
And Xi has indicated interest in moving ahead with a domestic reform agenda.
“Every bit of technical help, every bit of support that the U.S. can provide to the Chinese while they fight their internal domestic political battles, is going to be very important,” Prasad said.
Though Xi will arrive at the meeting with his wife, Peng Liyuan, first lady Michelle Obama isn’t attending, which some Chinese newspapers called a disappointment.
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