CNAS Responds: Takeaways from the 2022 G20 Bali Summit

As the 2022 G20 Bali Summit comes to a close, CNAS experts highlight key takeaways and analyze the implications for U.S. national security and global prosperity.

All quotes may be used with attribution. To arrange an interview, email Cameron Edinburgh at cedinburgh@cnas.org.

Richard Fontaine, Chief Executive Officer:

As world leaders have gathered for the G20 Summit, two elements stand out.

First, the long-awaited meeting between President Biden and Xi Jinping demonstrates both the benefits and strict limits of U.S.-China diplomacy. Jaw-Jaw is better than War-War, and it’s beneficial to maintain lines of communication amid tension. Yet Xi declined to resume the bilateral cooperation suspended before House Speaker Nancy Pelosi’s Taiwan visit, the meeting produced no breakthroughs, and the divisions between Washington and Beijing remain stark. The leaders intended to start identifying “guardrails” to bound their competition, but no such limits are yet clear. There’s far more continuity than change ahead.

Second, the G20 has become a troubled vehicle for international cooperation. The group played a particularly useful role after the 2008 global financial crisis, as leaders used it to agree on fiscal stimulus and financial system reforms. This year there will not even be a group photo, as most leaders remain unwilling to stand alongside a Russian representative. The G20 declaration states that “most members” condemn the war in Ukraine, and the G7 leaders issued their own statement on Ukraine, together with NATO. There are areas of mild agreement—like pacing interest rate increases and avoiding exchange rate volatility. Amid U.S.-China rivalry and Russian aggression in Ukraine, however, the G20 is now a body too broad in membership to be terribly effective.

Lisa Curtis, Senior Fellow and Director, Indo-Pacific Security Program:

This year’s G20 Summit saw dissension among member states on whether to criticize Russia for its war in Ukraine but wide agreement on the negative global impact of the war and on the need to collectively address the acute energy and financial crises it has created. Establishing a $1.5 billion pandemic fund and an $81 billion International Monetary Fund to assist countries facing debt crises, the G20 grouping showed it could take concrete action, even in the face of significant geopolitical differences. A bilateral meeting between U.S. President Joe Biden and Chinese President Xi Jinping that preceded the G20 meeting was unexpectedly positive, providing hope among member states that the two superpowers would work to stabilize political ties amidst global economic challenges.

The G20 gathering also followed a successful summit between President Biden and ASEAN leaders over the weekend, allowing the United States to show its commitment to a region increasingly seen as dominated by China through large-scale infrastructure investment and trade deals. U.S. and ASEAN leaders agreed to elevate their partnership to a “Comprehensive Strategic Partnership” and announced five new high-level dialogues on health, transportation (including an electric vehicle initiative), women’s empowerment, climate, and energy.

As India gets ready to assume leadership of the G20 and host next year’s summit, Indian Prime Minister Modi made a small gesture toward China by publicly greeting President Xi at the G20 dinner, marking the two leaders’ first interaction since the countries’ 2020 border crisis. With both the Indian and Chinese militaries still heavily deployed along the disputed border, however, there is little chance for full normalization of diplomatic ties in the near term.

Jacob Stokes, Senior Fellow, Indo-Pacific Security Program:

President Joe Biden and General Secretary Xi Jinping’s first in-person meeting as their countries’ top leaders marks an important moment in U.S.-China relations. The tone of the meeting appeared cordial and professional—seemingly a world away from the March 2021 meeting in Anchorage, Alaska, where top diplomats hurled vitriol at each other. In Bali, both Biden and Xi looked empowered coming off political wins at home in the U.S. midterm elections and the 20th Party Congress, respectively. Washington’s stated objectives for the meeting were suitably realistic: Try to put a proverbial floor under the relationship, keep lines of communication open, and prevent strategic competition from escalating into conflict. And do so while safeguarding U.S. and allied interests and values while also identifying ways to coordinate with Beijing on addressing transnational challenges.

The meeting made progress on all those fronts, so far as it goes. But a new modus vivendi for the two major powers cannot be built on positive statements alone. Whether momentum from the meeting can translate into concrete and sustained actions remains to be seen. One outcome of the meeting is Secretary of State Antony Blinken will travel to Beijing early next year to follow up. He will face a difficult task given the many enduring structural disagreements between the United States and China on issues ranging from Taiwan to technology and trade. Another obstacle will be China’s refusal to delink coordination on transnational issues from other aspects of bilateral relations, a position Beijing put into practice by cutting off climate talks following House Speaker Nancy Pelosi’s visit to Taiwan. Separately, the tenor and substance of the Biden-Xi meeting suggest that Xi’s audience goes beyond the United States. He wants to convince to the rest of the world, especially developing countries, that China is not a source tensions and instability. That is a tall order given Beijing’s actions in recent years. In sum, the Biden-Xi meeting charted a path for stabilizing U.S.-China relations; now Washington will have to test whether Beijing is prepared to walk it.

Carisa Nietsche, Associate Fellow, Transatlantic Security Program:

On the sidelines of the G20 Summit, Chinese President Xi Jinping met with Dutch Prime Minister Mark Rutte. In the wake of the United States’ latest restrictions on chips to China, Xi encouraged the Netherlands to avoid “decoupling” and “oppose the politicization of economic and trade issues.” The United States consulted but ultimately failed to get an agreement with Japan and the Netherlands before moving forward with recent semiconductor export controls. The Netherlands is home to ASML, a producer of a key tool needed to make high-end semiconductors.

As the United States pressures the Netherlands to get on board with the controls, Xi is lobbying in the opposite direction. In a dig to the United States, Xi encouraged Rutte to “maintain and practice genuine multilateralism”—which he attempted to pit in direct opposition to the unilateral decision by the United States. The United States’ decision to move forward without an agreement with allies and partners is adding ammo to China’s playbook, as China attempts to further drive a wedge between the United States and its allies.

Emily Jin, Research Assistant, Energy, Economics, and Security Program:

The United States and China have not reached genuine reconciliation during the G20 Bali Summit, but rather maintained their differences on key issues. On paper, the two have ​released statements on transnational threats like climate change. However, progress must be measured by actions rather than words. The coming months will show whether the pledged cooperation will manifest.

What is more revealing is the non-U.S.-China meetings and announcements. The United States and China have been competing fiercely for influence over third countries. The United States worked with the European Union and Indonesia to announce new infrastructure and investment projects with a collection of countries. China has met with U.S. allies such as Australia, France, the Netherlands and South Korea. Whether the U.S. and China are successful at winning over allies or partners remains to be seen. As a case in point in influence competition, General Secretary Xi Jinping delivered remarks encouraging countries to “unleash the potential of digital economy to drive global growth.” As China terraforms its economy with digital innovations such as the digital RMB, these remarks point to an increasingly assertive China. China is actively shaping international discussion and standards on data, by promoting its own state sovereignty model in digital governance under the guise of “common interests of the international community."

Nicholas Lokker, Research Assistant, Transatlantic Security Program:

The G20 summit yielded an important step forward for joint U.S.-EU efforts to counter China’s Belt and Road Initiative (BRI). In a joint statement on Tuesday, U.S. President Joe Biden and European Commission President Ursula Von der Leyen announced an array of new projects under the framework of the Partnership on Global Infrastructure and Investment (PGII), which provides low and middle income countries with infrastructure partnerships based on values such as transparency, inclusivity, and sustainability.

As my CNAS colleague Carisa Nietsche and I recently argued, the future trajectory of the BRI will hinge largely on the viability of these liberal, democratic alternatives. Putting more meat on the bones of the PGII is therefore a very welcome development. With respect to the European neighborhood, where China has often seen the BRI as an opportunity to advance its regional geopolitical interests, new EU ventures such as the Western Balkans electricity corridor and a floating solar photovoltaic power plant in Albania are particularly encouraging.

All CNAS experts are available for interviews. To arrange one, contact Cameron Edinburgh at cedinburgh@cnas.org.