The person who photographs Chinese President Xi Jinping with his US counterpart Joe Biden when they meet on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit — set to take place November 11-17 in the US city of San Francisco — will be faced with a task of responsibility.

The photo will illustrate the relationship between two nations, which are rivals in terms of economics and security policy. The stakes are high: if they do not cooperate, global challenges such as climate change cannot be met.

The media and the public will be paying attention to facial expressions, posture and the whole setting to interpret the relationship between the two. At least physically, however, they will be meeting eye to eye: Biden is 1.83 meters (ca. 6 feet) tall, Xi is probably about 1.80 meters. But it is not exactly certain, as China treats information like this as it would a state secret.

The last meeting between the two leaders took place in November 2022, at the G20 summit on the Indonesian island of Bali. Since then, there have been lively political consultations, but Xi and Biden have not directly exchanged views face to face.

Helena Legarda, a lead analyst from the Mercator Institute for China Studies (MERICS), said: "Xi and Biden will be discussing current issues. That is relatively clear. However, it is uncertain whether they will reach a consensus. There may not be much outcome out of this summit."

China and the US: two rival political systems

The relationship between China and the US pits two very different political systems against one another. China is an authoritarian one-party state that has become the second-largest economy in the world. Beijing has said it wants to be the strongest country in the world by 2050. A communist country that for decades fought unsuccessfully, albeit hard, against the Western alliance during the Cold War hopes to have replaced the US as a global superpower by then. The US — the world's largest economy and a democracy — wants to defend its place.

The two countries are engaged in fierce competition on many levels. The economy is one issue, especially the high-tech sector regarding semiconductors, digitalization and artificial intelligence. But geopolitical interests also play a role, with China wanting to forge alliances with non-Western countries and reshape the US-dominated world order. Ultimately, the question is whether a communist autocracy or a capitalist democracy will become the ideological model of the 21st century.

In 1972, the US — under President Richard Nixon — established diplomatic relations with the People's Republic of China. These have undergone rapid development over the past few decades, particularly since the introduction of reform and opening-up policies under Deng Xiaoping in 1978.

Economic interdependence

China has been able to create close interdependent relationships with other states thanks to its major economic muscle. Its huge market has attracted numerous investors from Europe and the US who have brought capital and technical know-how. For example, in 2022, German car manufacturers VW, BMW and Mercedes generated an average 35% of their respective revenues in China.

At the same time, China has invested in Africa, Central Asia, Latin America, and most recently, the Arab world. Its Belt and Road Initiative, also known as the New Silk Road, which has two trade routes, one land and one maritime, is one prominent project. China also plays a leading role in the BRICS+ group of major emerging economies. Originally comprised of Brazil, Russia, India, China and South Africa, the group is being expanded to include six more members. Some 40 countries have expressed an interest in joining.

"China is practicing a form of statecraft that uses economic leverage to try to achieve political goals in relation to other states," said Markus Taube, a professor at the University of Duisburg-Essen and economic expert on China.

At a German-Chinese business conference in Düsseldorf last week, Taube said: "China wants more influence in the global system and is also demanding it. As a result, there is more antagonism with the Western world. We are experiencing the renaissance of 'economic statecraft' as an instrument for pursuing higher national goals." According to the US think tank, the Atlantic Council, "economic statecraft is the use of financial, regulatory, and economic tools to achieve foreign policy objectives."

'Change through trade' hasn't gone as expected

Ironically, it was initially the West that wanted to generate change through "economic statecraft," particularly in the 1990s. The German catchphrase was "Wandel durch Handel" (change through trade). "German theorists of order thought that complex economies could not function without liberal social models. That 'change through trade' would set in motion a process of harmonization. We can see today that this is not entirely correct," explained Taube. China has proven that capitalism and autocracy are an excellent match.

"The big challenge for Western countries and the ultimately long-term concern would be that China has expressed its ambition to reform the current global order, rules, values and principles so that they are more in line with their own," said Legarda from MERICS.

The US-led Group of 7 (G7), a liberal-democratic group of seven industrialized nations — and of which Germany is a member — has offered to work with China on, "global challenges as well as areas of common interest." A G7 Foreign Ministers' statement released after their meeting in Japan on November 8 asserts: "We stand prepared to build constructive and stable relations with China, recognizing the importance of engaging candidly and expressing our concerns directly."

Ahead of Xi's visit to the US, there have been calls for President Biden to respond more decisively to Chinese provocations in the China Sea and elsewhere. But for China and the US to overcome common challenges, a pragmatic alliance is necessary, despite systemic rivalry. The West is also struggling to find like-minded companions in this epic competition. "As democracies, we can only hold our own in a systemic competition with autocratic forces if our friends around the globe sense that we are serious.," said Federal Foreign Minister Annalena Baerbock prior to her departure for Tokyo.

"Decoding China" is a DW series that examines Chinese positions and arguments on current international issues from a critical German and European perspective.

This article was translated from German.