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Biden, Xi Spoke by Phone About AI Risks, Russia and Fentanyl

(Bloomberg) -- US President Joe Biden and Chinese leader Xi Jinping spoke by telephone on Tuesday, their first one-on-one communication since meeting in California last November.

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The leaders of the world’s two biggest economies have managed to maintain a veneer of diplomatic stability despite deep mutual suspicion between their countries, and as their governments pursue export controls, sanctions and tariffs. At the same time, they have sought common ground on issues including risks posed by artificial intelligence and combating illicit drugs like fentanyl.

The call was carefully orchestrated, both countries issued statements calling it “candid and constructive,” and said they discussed AI, military cooperation, climate change and efforts to fight drug trafficking, among other subjects.

Biden raised concerns about China’s “support for Russia’s defense industrial base,” according to a US summary of the call. Biden also emphasized the importance of rule of law and freedom of navigation in the South China Sea, according to the statement.

The White House also hinted at a pending tariff decision, saying that Biden raised China’s “unfair trade policies and non-market economic practices” and “emphasized that the United States will continue to take necessary actions to prevent advanced U.S. technologies from being used to undermine our national security, without unduly limiting trade and investment.”

The tariff review did not specifically come up during the leaders’ conversation, White House spokesman John Kirby said Tuesday after the call. Biden and Xi did discuss the future of the Chinese-owned social media platform TikTok, for which the US president is seeking to force a sale over data-security concerns.

Xi’s statement similarly outlined military-to-military communication, climate change, AI and drug trafficking. But Xi raised concerns on “several negative factors” even as relations between the world’s two largest economies have stabilized.

Xi called out “endless” US restrictions and sanctions on China’s tech sector, saying the moves are creating risks instead of de-risking. He also characterized any potential US involvement in supporting a Taiwanese bid for independence as a “red line.”

Chinese state media focused on Xi’s comments to Biden, quoting him as saying: “Don’t flipflop, don’t stir up trouble and don’t cross the line.”

More Talks

The two leaders agreed in November to communicate more regularly, since it had been a year since their previous one-on-one talks. The relationship reached a nadir last year after the flight of a Chinese balloon across the US. Biden faces a reelection campaign against Donald Trump, who started a trade war against China after he first took office and is proposing a 60% tariff on all Chinese imports if he returns to power.

The US is weighing a final decision on its review of tariffs on China, which is expected to impose some new levies, including on connected vehicles. The White House has not said when it will make its tariff announcement.

Xi has sought to keep tensions low as he seeks to revive a struggling economy, holding a last-minute meeting last week with American business leaders in Beijing including Blackstone Inc.’s Stephen Schwarzman and Qualcomm Inc.’s Cristiano Amon. The Chinese president told the group that China’s economy hasn’t peaked, while calling on US companies to invest in his nation, saying he sees no need for Washington and Beijing to decouple, Bloomberg reported last week.

The US side prepared a laundry list of other bilateral and international issues for Biden to discuss with Xi: cybersecurity and the US need to prevent advanced technologies from undermining national security; concerns over Hong Kong’s autonomy; a call for China to release Americans wrongfully detained or under exit bans; and concerns over potential Chinese interference in the 2024 US election.

Yellen Visit

Plans for a Biden-Xi call were accelerated when National Security Advisor Jake Sullivan met in late January with his counterpart, Chinese Foreign Minister Wang Yi, in Bangkok. Treasury Secretary Janet Yellen is expected to visit Beijing in the coming days and Secretary of State Antony Blinken plans to follow in the coming weeks, according to a senior US official.

Yellen will spend two days in the southern commercial and manufacturing hub of Guangzhou beginning April 5, before heading to Beijing for two more days of talks, the Treasury Department announced Tuesday.

The Biden administration in recent months has rolled out a series of measures meant to counter China. They include a sweeping executive order on data security that purports to cut off transactions involving Americans’ highly sensitive personal data from countries of concern; a Commerce Department investigation that could lead to restrictions on imports of Chinese electric vehicles; and an executive order to bolster cybersecurity and mitigate the risk of Chinese-made cranes at American ports.

The White House has, however, touted some wins on cooperative efforts with China since the leaders met in person on the sidelines of the Asia-Pacific Economic Cooperation meetings.

Washington set up an anti-drug working group with Beijing that started meeting earlier this year, the restoration of military-to-military communications, and a fresh dialogue on how to manage the risks of AI. The AI meetings are slated to begin in the coming weeks, the official told reporters.

The United Nations last month approved a US-backed resolution on AI, co-sponsored by more than 110 countries, including China and India. The non-binding measure encourages members to support “responsible and inclusive” AI development through domestic regulations and governance.

--With assistance from Jacob Gu, Josh Wingrove, Akayla Gardner, Jing Li and Philip Glamann.

(Updates with Xi comments in ninth paragraph.)

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