Geopolitics remains a very bumpy ride for the finance industry despite the US Secretary of State’s visit to China. finews.asia takes a look.

Only a decade ago, politics didn’t seem to matter all that much in Asia. Political issues percolated in the background, and the only thing that seemed to count was money and growth.

How times have changed. Now we seem to be living in a post-war 20th-century flashback where short, impromptu visits by senior state officials to foreign countries lead to reams of analysis and speculation, almost as if we were all engaged in some large group overthink.

At least that seems to be the case with US Secretary of State Antony Blinken's visit to China on Sunday and Monday.

Obligatory Visit

The visit was amply covered by all major media (collated Google web search) and the US State Department put out four media releases on it over the space of two days.

Of those, the one that was the most interesting was the transcript of the direct comments by China's President Xi Jinping. He characterized the meeting as «very good», saying both sides had reached an agreement on «some specific» issues. 

Blinken for his part said he had been sent by US President Joe Biden out of an «obligation and responsibility» to manage the relationship.

No Confrontation

The China foreign ministry also put out a statement. In it, Xi Jinping also seemed largely conciliatory by saying that the international community did not want to see «conflict or confrontation» between the two countries.

He also maintained that the mainland does not seek «to challenge or displace» the US, and he called for a «sound and steady» relationship between both countries.

So far so good. But now we get to the more problematic part. At the end of the statement, China indicated that the US had agreed to return to the Bali agenda set by their respective presidents.

Bali Commitments

It is also where the tone gets a great deal starker, even blunt.

«The United States stands by the commitments made by President Biden, namely the United States does not seek a new Cold War, it does not seek to change China’s system, its alliances are not directed at China, it does not support “Taiwan independence”, and it does not seek conflict with China.» 

Blinken’s statements, however, don’t seem to go quite that far. Instead of referring to a cold war, he indicated that the US will «compete vigorously» while looking to reduce the risk of miscalculation.

Nuanced and Differentiated

He also apparently voiced the usual laundry list of issues at the meetings, among them unfair economic practices, the wrongful detainment of US citizens, Taiwan, and human rights concerns in Xinjiang, Tibet, and Hong Kong. But even related to Taiwan, the US, surprisingly, seemed far more nuanced and differentiated.

«The Secretary underscored the importance of maintaining peace and stability across the Taiwan Strait and reiterated there has been no change to the U.S. one China policy, based on the Taiwan Relations Act, the three Joint Communiques, and the Six Assurances.»

And when it came to Bali, the US statement did not appear to indicate it was standing behind past commitments but simply said it agreed to continue discussions on developing principles to guide the bilateral relationship.

Clear Differences

So, what should the finance sector take from all this? The fact that they have resumed talking is positive. Another is that have ostensibly agreed to keep talking. Still, they are clearly not on the same wavelength as the statements clearly show.

That means that regional bankers should probably not raise their heads above the parapet just quite yet. We won’t really know how much things have cooled down or not until we can gauge the blowback from the next freedom of navigation exercise in the South China Sea - or a visit to Taiwan by a senior US politician. 

Although the mini-cold war in a teapot we seem to have experienced in 2023 has passed for now, we also seem to have now entered some kind of new age détente. But much akin to the 1960s and 70s, money and growth will have to continue to take a backseat to politics for a long while yet.