The meeting between the American and Chinese presidents at the G20 summit shows that the looming confrontation between the two powers can be averted – because neither side would currently benefit from an escalation. Above all, Washington’s military support for Ukraine has led Beijing to back down. By George Friedman

Earlier this week, the G20 summit opened in Indonesia, which saw the long-awaited meeting between US President Joe Biden and Chinese President Xi Jinping. It’s a success that they even met.

The fact that the meeting lasted three hours is also encouraging, as unsuccessful meetings tend to end quickly and are garnished with inconsequential joint declarations. So all of this points to honesty, substance and the prospect of future meaningful conversations.

The first reports about the meeting also confirm this. The two appeared to agree on issues such as the dangers of nuclear weapons and the prospect of a future visit by Secretary of State Antony Blinken to China, although they reiterated that they are competitors with differing views on issues such as Taiwan. Xi is said to have even said that the American model of democracy is outdated.

As I have argued for the past year, advances on this front are due not to the virtues of either side, but to the geopolitical realities in which they operate. For the United States, the reason for the confrontation is economics.

From the US perspective, China has failed to allow American goods reasonable access to its market and has manipulated the value of the yuan to maximize trade and investment – a charge made years ago by the Obama administration.

Washington argued that China had to be accommodating given the scale of investment and technology provided by American companies, especially as public opinion created the impression that the US had been exploited by China.

China has been unable to meet American demands without undermining its own economy. That laid the foundation for Washington’s irritation.

For China, American economic demands posed a military threat. Beijing was unable to accommodate the United States and feared a US military response. China is an export power, and its well-being depends on its goods being able to travel from the ports on the east coast, through the South China Sea, to the Pacific, and then around the world.

The United States could theoretically mine these ports or close them down by other means. China’s response to this scenario was to act as aggressively as possible to convince the US that its economic demands would entail war and that China could defeat the US Navy.

It was never about destroying China’s economy, but rather using the threat to influence Beijing’s response. Likewise, China never intended to go to war with the United States, but instead wanted to convince the US that the possibility was real enough to prompt policy change. Both sides showed themselves combative, but were careful not to press the other side too much.

Two things made the situation worse. For one, Russia’s attack on Ukraine: Washington’s willingness to wage a skillful war and arm Ukrainian forces with US weapons demonstrated a capability that China did not believe the United States had in its repertoire.

China’s alliance with Russia, designed to confront the United States on two fronts, collapsed before it was formed. Beijing reassessed US military power, will and alliance structure and saw a greater danger to itself than to the US in a military conflict.

The second reason was the ongoing deterioration in the Chinese economy. A long-term cyclical force has led to a massive downturn that threatens social stability. Regulations on imports from China and investments in China could aggravate this uneasy situation.

In other words, the stakes are high for China; this is less true for the United States. In the absence of a military threat, the US benefited from inexpensive Chinese products. The US has little to gain from military confrontation and much from economic cooperation.

China didn’t want a war it could lose, and the US didn’t want an economic crisis in China.

Economic improvements are very tempting as long as they are possible. This week’s meeting has shown that this may well be the case.

About the author: George Friedman, 73, is one of the United States’ best-known geopolitical analysts. He directs the think tank Geopolitical Futures he founded and is the author of numerous books. Most recently, “The storm before the calm: America’s division, the looming crisis and the triumph that followed” was published by Plassen-Verlag.

The original of this article “How US aid to Ukraine led to a rethink in China” comes from Cicero Online.