Assessing Bilateral Relations at the Bund Summit
Economist Stephen Roach attended the Bund Summit in Shanghai, where he observed discussions regarding the trajectory of US-China relations. According to reports from Interest.co.nz, Roach characterized the exchange of views at the gathering as "focused, vigorous, and open." He compared this experience favorably to the China Development Forum (CDF), noting that the CDF has effectively become a government conference after banning him following 25 years of attendance.
The agenda at the Shanghai summit covered a broad range of topics, including technology, geopolitics, the global economy, monetary policy, fiscal challenges, global imbalances, new energy sources, artificial intelligence, currencies, and trade. Central to these discussions was an assessment of whether US-China relations are entering a "less contentious chapter" following recent summits between US President Donald Trump and Chinese President Xi Jinping.
The Framework for Constructive Strategic Stability
Roach reported that the potential for a new era in bilateral relations hinges on the concept of "constructive strategic stability." This framework is based on principles of "respect, fairness, and reciprocity," which were highlighted in readouts from the recent Trump-Xi summit held in Washington.
The current diplomatic landscape follows a period of significant economic tension. Roach noted that the Trump administration previously raised tariffs on China to 145% before backing down after Xi utilized rare-earths as leverage. Despite these prior escalations, participants at the Shanghai gathering agreed that the primary takeaway from recent Trump-Xi meetings is their willingness to "buy time" due to domestic preoccupations, thereby avoiding further trade, technological, or military disputes.
Limitations of a G2 System and Future Outlook
While rumors have circulated regarding a potential trilateral summit between Trump, Xi, and Russian President Vladimir Putin at the upcoming Asia-Pacific Economic Cooperation forum in Shenzhen, the consensus among participants at the Bund Summit was that a G2 system is not imminent.
Roads to long-term stability remain complex. Roach assessed the current US-China relationship as "stable for now, but with an uncertain future." He noted that Chinese participants at the summit remain realistically cautious and do not trust Trump’s perspective due to the norm of abrupt policy shifts in the US administration.