What Happened at the Latest U.S.-China Meeting

Welcome to Foreign Policy’s China Brief.

The highlights this week: U.S. Ambassador to China Nicholas Burns and Chinese Foreign Minister Qin Gang engage in high-level diplomacy—without a breakthrough, Canada expels a Chinese diplomat over alleged influence operations, and Florida passes a law banning Chinese citizens from owning property in the state.

U.S. Ambassador to China Nicholas Burns and Chinese Foreign Minister Qin Gang met on Monday—one of the first high-level U.S.-China dialogues since the intrusion of a Chinese spy balloon into U.S. airspace caused U.S. Secretary of State Antony Blinken to cancel a trip to Beijing. Had it gone ahead, Blinken’s trip would have followed a relatively warm meeting between U.S. President Joe Biden and Chinese President Xi Jinping on the sidelines of the annual G-20 summit in November.

This week’s Burns-Qin meeting was not a breakthrough. That was evident in Qin’s language, which cast blame on the United States for declining relations, echoed in a Foreign Ministry press conference following the event. Under ordinary circumstances, the meeting would have seemed unremarkable; it’s only because things between the two countries are so bad that an event that included Chinese accusations of “erroneous words and deeds” is seen as a potential step forward. Although it’s possible that the Blinken trip may be revived, I wouldn’t count on it anytime soon.

Because China so often delays or blocks meetings with the United States and other Western countries, any meeting is often taken by diplomats as a success in itself—with or without concrete results. Paradoxically, U.S.-China meetings in the Xi era often seem to negatively affect relations. On the Chinese side, the fear of being seen in public as soft toward foreigners means that officials come off as cold at best and aggressive at worst. In my personal experience, U.S. officials who have sat in meetings with Chinese Communist Party (CCP) officials over the last decade of Xi-ism have a particularly dim view of Beijing.

In the past, Track II diplomacy—which involves nongovernmental organizations—has proved more successful. The less formal nature of the meetings and individualized contacts have to some degree built useful contacts and cooperative efforts, especially between specialists in areas such as nuclear safety and biosafety. But Track II diplomacy was almost entirely shut down during the pandemic, and attempts to restart cooperation around those issues that began in 2022 have been stymied by the domestic atmosphere in China, and to a lesser extent by an increasingly suspicious attitude in the United States toward contact with Chinese institutions.

The United States has expressed a desire to establish so-called guardrails around the relationship to prevent mutual bitterness from spiraling into worse conflict. Yet no one in Beijing is picking up the U.S. outreach; in fact, there is active hostility toward establishing such restraints, which Beijing sees as another way for Washington to contain Chinese power. There are Chinese officials who would like to ensure an event such as a sea collision, a U.S. official visit to Taiwan, or a spy balloon doesn’t escalate into an armed clash, but they are an increasingly disempowered minority.

In addition to the meeting with Burns, Qin has been busy so far this month. China and Pakistan are cooperating on an attempt to reintegrate a Taliban-led Afghanistan back into the international order; at a recent meeting, Qin promised an extension of Belt and Road funding to the country. The foreign minister is also headed to Europe to try to undo some of the diplomatic damage of the last few years.

Meanwhile, Qin is also set to meet with Central Asian leaders, aiming to reinforce ties to those countries’ elites at a time when China seems like a better prospect than Russia. Beijing and Washington may be barely talking to each other, but they’re certainly talking to other countries about each other.

Canadian influence scandals. On Monday, Canada expelled mid-level Chinese diplomat Zhao Wei, who was based at the consulate in Toronto, amid reports that he allegedly organized the harassment of a Canadian Conservative lawmaker, Michael Chong. In 2021, Chong sponsored a motion condemning Chinese state atrocities against the Uyghur Muslim minority. Canadian Prime Minister Justin Trudeau’s Liberal government was reportedly aware of the harassment, which included targeting Chong’s relatives in Hong Kong, but did not take definitive action until the media reports emerged.

China denied the claims and responded on Tuesday by expelling a Canadian diplomat in Shanghai. The reciprocal moves are just the latest twist in a long saga around Chinese influence operations in Canada.

This year, Canadian intelligence officers leaked claims that China had interfered in Canadian elections in 2019 and 2021; the officers’ perception that the Trudeau government failed to take action may have motivated the leaks. (China’s actions largely supported Liberal candidates.) The leakers also accused Liberal member of Parliament Han Dong of colluding with Beijing to delay the release of two Canadians detained in China, supposedly to help Liberals during the elections—an allegation he has vigorously denied.

The Trudeau government has responded to criticism with harsher policies on other issues involving China, such as by limiting scientific funding from Chinese state-linked entities. The opposition Conservatives are only likely to double down on a tough approach to Beijing.

U.S. property panic. Florida passed a law Monday banning Chinese citizens from owning property in the state unless they are permanent U.S. residents, as well as restricting entities with alleged links to the CCP (among other bogeymen) from buying property within 5 miles of sensitive sites. A similar law is making its way through the Texas legislature.

Roughly 384,000 acres of land in the United States are owned by entities connected to China, from private companies to firms with significant Chinese shareholders. (That’s a small fraction of the 40 million acres owned by foreign countries, which altogether make up less than 2 percent of all U.S. arable land.) Although a small amount of this is located near U.S. military bases, there is no evidence that’s by design. It’s much more likely that Chinese investors want to buy property in the United States because it’s a good investment.

Some bans on foreign property ownership—those intended to prevent squeezing locals out of the market without singling out one nationality—make sense. But the Florida law and others like it in the United States are exaggerated responses to a non-problem, framed in a way that could exacerbate anti-Asian racism and which evokes anti-Chinese legislation of the past.

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Information crackdown. China’s efforts to crack down on attempts to obtain information about businesses in the country continued this week, with raids on offices of Capvision, a prominent expert-network consulting firm. In what seems set to be a long-running campaign, a Monday evening report on state television warned of espionage and identified domestic consulting firms such as Capvision as aiding foreign efforts to obtain sensitive information. All of this will have a chilling effect for any consultancy work in China.

Good due diligence involves poking one’s nose around sites on the ground, especially when local partners often lie about conditions. Distinguishing fact from fiction also involves conversations with industry players, as even Chinese leaders are forced to do to make sense of shaky statistics. Such due diligence is now more likely to be cast as espionage—both by China’s intelligence agencies and by local authorities following signals sent from the top.

As China Brief mentioned last week, the Chinese leadership seems convinced that any business information—private or public—is part of the West’s determination to contain China. But by undermining foreign firms’ ability to do due diligence, Beijing may only speed up the cycle of decoupling.

Washed-up shipping. Shifts in exports and global shipping costs since the start of the COVID-19 pandemic have left thousands of Chinese businesses stranded. The average cost of shipping between Shanghai and the west coast of the United States reached record highs of $20,000 per container in mid-2021, and then fell to one-tenth of that price last year. Meanwhile, the shipping container shortage turned into a glut.

Troubles in the shipping industry will likely have knock-on effects for China’s already hard-hit trucking industry, which suffered under last year’s lockdowns. Truckers who could once rely on regular port business are now seeing their incomes fall sharply. In China, most freight moves by truck and most vehicles are owner-operated, but hard times have made the industry less appealing for China’s roughly 20 million truckers. Apps designed to cut out middlemen and empower individual drivers have instead ended up taking an even larger cut.