Meetings like Biden-Xi summit may be only way forward for U.S. and China, former Obama advisor says

A summit between U.S. President Joe Biden and Chinese President Xi Jinping could be the only way to find a path forward in the strategic competition between the world’s top two economies, a former White House official said Thursday. 

Evan Medeiros, who was former President Barack Obama’s top advisor on Asia-Pacific, said only the top leadership in Beijing can help address the most contentious issues at the heart of the U.S.-China competition.

“There’s really no other approach at this time that has as great a chance of working as that, because of the way the Chinese system is structured, because of how powerful Xi Jinping is, because of how centralized decision-making is,” Medeiros, now a professor in Asian studies at Georgetown University, told CNBC’s “Squawk Box Asia.”

“I think the Biden administration is right to say not that they want to cut out the middlemen, but they want to use that top-level engagement between Biden and Xi to sort of set the overall tone and direction of the relationship,” he added.

White House national security advisor Jake Sullivan and top Chinese diplomat Yang Jiechi held high-level talks in Zurich, Switzerland on Wednesday. That was their first in-person encounter since a March meeting in Alaska, which kicked off with an unusual public airing of grievances on both sides.

During the talks in Zurich, both sides reached an “agreement in principle” to hold a virtual meeting between Biden and Xi, sources told CNBC’s Kayla Tausche on Wednesday.  

Relations between the U.S. and China have remained rocky in the last few years. Both sides have clashed on issues ranging from trade and technology, to human rights and the origins of Covid-19.

But bilateral tensions are not headed for a “grand thawing” even as the communication between the two countries appeared to be improving, said analysts.

Scott Kennedy of Washington D.C.-based think tank Center for Strategic and International Studies said the anticipated Biden-Xi virtual summit signals a “limited thaw” in bilateral relations. But it will help to stabilize the U.S.-China competition and avoid accidents, he said.

“If there are some positives that come out of it that’d be great, but this is not a grand thawing of the relationship,” Kennedy, senior advisor and trustee chair in Chinese business and economics at CSIS, told CNBC’s “Squawk Box Asia.”

Issues discussed at the Zurich meeting between Sullivan and Yang include China’s actions with regards to Taiwan, according to a White House statement.

And Taiwan will “for sure” come up again when Biden and Xi hold their virtual meeting, Kennedy said. The meeting is expected before the end of this year.

Taiwan has reported several instances of Chinese warplanes breaching its air defense zone in recent days. The island said 148 Chinese air force planes have crossed the southern and southwestern part of the zone in the four days since Friday — when China marked its National Day.  

That prompted the U.S. State Department to urge Beijing to “cease its military, diplomatic, and economic pressure and coercion against Taiwan.”

The ruling Chinese Communist Party in Beijing claims Taiwan, a democratic self-ruled island, as a runaway province that must one day be reunited with the mainland — by force if necessary. The party has never controlled Taiwan, but has recently been more assertive in its territorial claim.

The U.S. has no official diplomatic ties with Taiwan, but is the island’s most important international supporter and arms supplier. That’s angered China, which views the U.S. as interfering in its “domestic” affairs.

Medeiros, the former Obama advisor, said Taiwan is a “very, very challenging” issue for the U.S. and China to iron out.

“Building guardrails, setting boundaries begin with clear, consistent and credible communication from the top of the U.S. government to the top of the Chinese government so they understand how we’re perceiving these massive strike packages over Taiwan, how they could illicit a response from the United States,” he said.

“Similarly, we need to understand better how Beijing is seeing our actions. I think there’s a common misperception in Beijing that the U.S. is seeking to move beyond the ‘one China’ policy and that’s what motivating some of their more aggressive activities.”

The “one China” policy refers to the concept that there’s only one central Chinese government — the one under the Chinese Communist Party in Beijing.