On December 11, 2024, Chinese President Xi Jinping and US President Joe Biden both extended congratulatory letters to the US-China Business Council (USCBC) Gala Dinner, signaling a rare moment of diplomatic synergy. Xi’s letter emphasized China’s commitment to peaceful coexistence and comprehensive reform, while Biden’s message underscored the importance of bilateral economic ties. These synchronized gestures reflect a mutual acknowledgment of the indispensable role each nation plays in global economic stability and progress.

Adding to this promising outlook, representatives from both countries extended the Agreement Between the US and China on Cooperation in Science and Technology for another five years, effective from August 27, 2024. This renewal is a testament to the enduring importance of scientific collaboration in addressing shared challenges such as climate change, healthcare, and technological innovation. For the world’s two largest economies, fostering cooperation has far-reaching implications not just for their populations but for humanity as a whole.

Recent months have witnessed a marked uptick in high-level economic engagements between China and the US On the same day as the USCBC event, US Treasury Secretary Janet Yellen urged the incoming US administration to maintain the dialogue channels she helped reopen with Beijing. Meanwhile, China’s Ministry of Commerce reiterated its readiness to engage with US counterparts, signaling a willingness to bridge gaps despite political headwinds. Following recent discussions at the G20 finance ministers’ meeting in South Africa, another financial working group meeting is slated for December 15-16 in Nanjing, underscoring the momentum behind sustained economic diplomacy.

This renewed emphasis on dialogue comes against the backdrop of a global environment increasingly shaped by “anti-globalization” sentiments. Both nations appear to recognize that economic decoupling is neither practical nor beneficial. Instead, strengthening communication and expanding cooperation in trade and investment are seen as vital strategies to navigate the complexities of global supply chains, technological advancement, and economic resilience.

As a bridge between the two economies, the US-China Business Council holds a pivotal position. Representing over 200 US companies operating in China, the USCBC has been vocal about the enduring importance of the Chinese market to American businesses. In July, the council’s delegation became the first from the US business community to visit China after the third plenary session of the 20th Central Committee of the Communist Party of China. At the China International Import Expo in November, USCBC President Craig Allen reaffirmed that “China remains a very important market to the US.”

Major US corporations, including Apple, Boeing, and Goldman Sachs, continue to prioritize their presence in China, leveraging opportunities in its dynamic and resilient economy. This underscores the recognition within the US business community that engagement with China is essential not only for corporate growth but also for contributing to global economic stability. The participation of these companies in Chinese events and initiatives reflects a commitment to mutual prosperity despite ongoing political challenges.

China and the US boast highly complementary economies, with each offering unique strengths that enhance the other’s growth potential. China’s manufacturing prowess, combined with its push toward greener and smarter industrial development, makes it a critical player in global supply chains. Meanwhile, the US excels in research, innovation, and human capital, providing a robust foundation for technological and industrial collaboration.

The recently concluded Central Economic Work Conference in China reaffirmed the country’s commitment to deepening reforms and expanding its openness to the world. This policy direction aligns with the interests of US businesses eager to tap into China’s vast consumer base and production capabilities. By working together, the two nations have the potential to achieve outcomes that are greater than the sum of their parts, delivering mutual benefits and fostering global prosperity.

The trajectory of China-US relations is defined by a delicate balance between competition and collaboration. Public rhetoric in Washington often emphasizes strategic competition, yet economic data tells a different story. Despite trade wars, tariff hikes, and technology restrictions, the total trade value between China and the US reached 4.44 trillion yuan in the first 11 months of 2024, marking a 4.2 percent year-on-year increase. When factoring in indirect trade through third-party markets like ASEAN countries and Mexico, economic exchanges between the two nations have grown rather than diminished.

This duality is also evident in the recently passed National Defense Authorization Act (NDAA) for Fiscal Year 2025. While the act imposes new restrictions on China, including the peculiar prohibition of “Chinese garlic” in US military stores, it notably excludes sectors like cross-border e-commerce and biopharmaceuticals, which are areas of mutual interest. These exceptions highlight the reality that the economic interests of both nations are deeply intertwined, making complete decoupling an impractical and costly endeavor.

The relationship between China and the US extends far beyond bilateral concerns. How these two powers interact will significantly influence global trends in unity versus division, the structure of supply chains, and the pace of technological and economic progress. Their ability to navigate tensions while fostering cooperation will serve as a bellwether for the broader international community.

A cooperative China-US relationship can act as a stabilizing force in an increasingly fragmented world. It can pave the way for global solutions to pressing challenges such as climate change, public health crises, and economic inequality. Conversely, prolonged tensions could exacerbate divisions, disrupt global supply chains, and hinder collective progress, leaving all nations worse off.

The simultaneous messages of goodwill from Presidents Xi and Biden, coupled with tangible steps like the extension of the science and technology agreement, provide a hopeful starting point for improved relations. However, sustained progress will require overcoming significant challenges, including political pressures, ideological differences, and geopolitical rivalries.

For both nations, prioritizing pragmatic engagement over ideological posturing will be key. The economic logic of cooperation-grounded in shared interests and mutual benefits-offers a compelling foundation for this approach. By focusing on areas of common ground, such as climate action, technological innovation, and global economic stability, China and the US can set a positive tone for the coming year.

As an old Chinese proverb says, “A new year brings new beginnings.” Let this be a year where dialogue replaces discord, and cooperation triumphs over confrontation. The stakes are too high for anything less.

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