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Shortly after Chinese President Xi Jinping and U.S. President Joe Biden met on the sidelines of the G20 summit in Bali, regional powers in Asia got a greater degree of assurance against confrontation risks. The exchange served as a key test of Washington’s ability to genuinely coexist with Beijing, especially in a Southeast Asia region that has productive trade and diplomatic relations with both countries. And the same region has very limited appetite for any cold-war mentality that the U.S. has used to deliberately resist China’s rise. In stark contrast, for Beijing, coexistence is simply a holdover from the past. Nothing stands in the way of its continuity.

At the meeting, the stated US position to manage the US-China "competition responsibly" was long overdue. Washington has been preoccupied with pouring billions into denying China its chipmaking prowess, and has been brazen in its unwarranted military assistance to Taiwan, a Chinese province. What Washington describes as "competition" assumes the face of violent confrontation when one looks to divisive arrangements spanning nuclear submarines, “like-minded” democracy clubs, and specific China-focused quadrilateral and Indo-Pacific groupings. All that is evidence that the US – despite its promises of keeping "competition" away from confrontation – is consciously promoting the risks of increased militarization and diplomatic coercion in China’s immediate neighborhood. This necessitates proper guardrails to keep this consequential relationship on track for the betterment of the region. The Bali exchange provides impetus to that very pursuit.

The Association of Southeast Asian Nations (ASEAN) – a top ten-member Asian bloc – has previously signaled its apprehension to rising confrontation risks in the Taiwan Strait thanks to former US House Speaker Nancy Pelosi’s unauthorized visit to Taiwan. Now that the Biden administration wishes to court ASEAN further, there is a natural incentive to strike the right cord with China in initial diplomacy. To that end, US-China inputs to the Bali exchange make it clear to their mutual allies, that there is some hope to manage U.S.-China competition in a way that is conducive to stability.

What remains to be seen is how effectively the US demonstrates its sense of responsibility towards competition and engagement with China. For instance, it is one thing for Biden to commit to joint efforts on transnational challenges with Beijing,  such as “climate change, global macroeconomic stability including debt relief, health security, and global food security.” The US makes its case on the fact that this is what the "international community expects". But the international community also expects tangible efforts to bridge the US-initiated trust deficit with China, avoid a growth in militarization and economic barriers in Asia, unilateral tariffs, and continued interference in China’s internal matters. Sovereignty must be treated the same for all countries, be it the US, China, or any other state. 

The very fact that Washington continues to back its interference in Taiwan, as reflected in the White House readout, confirms a single fact: that the US is not operating in good faith to develop “principles” that advance common US-China pursuits. Washington’s refusal to correct its persistent interference in China’s internal affairs remains clear as day as well. And to justify it in the name of competition only exposes the Biden administration’s continued credibility crisis in regions that prioritize healthy ties with Beijing.

For Xi, his country will take the positives from the exchange and look to the future in the right spirit. Long before the meeting, Beijing was clear about keeping relations away from the clutches of confrontation, and indicated the importance of valuing communication lines to overcome geostrategic differences. Even this week, that maturity and foresight escapes no one: Xi indicated that US-China relations should not be “a zero-sum game where one side out-competes or thrives at the expense of the other.” Moreover, several times in the recent past – including in a high-level meeting in Anchorage, Alaska  – it was Beijing that left the door open to actionable diplomacy with the US. It has consistently opposed futile containment policies, groupings, and strategies that the US touts to be a guarantor of stability in the Asia-Pacific. Look to Washington’s diplomatic shortcomings in the Ukraine-Russia conflict and understand the broader lesson on lasting peace: that diplomacy is key to eliminating conflict risks.

Taken together, the meeting in Bali provides hope for US-China diplomacy on core economic, geopolitical and international governance issues by preventing long-standing ties from hitting another divisive note in Asia. But the change in position from the US – particularly on managing competition – is much more than a coincidence. Biden remains keen to court ASEAN further, having just launched  the "US-ASEAN Comprehensive Strategic Partnership." Given ASEAN’s close links to Beijing, Washington is compelled to demonstrate greater vigilance towards what China actually means to the region and the world: an indispensable economic and diplomatic partner. It can thus ill-afford to bill containment designs front and center, when many – including Beijing – rightly see these plans as a detriment to peace, and quite frankly, a dead-end.