Biden, China's Xi will discuss communication, competition at APEC summit

G20 summit in Bali

(This Nov. 13 story has been refiled to say 'Chinese spy balloon,' not 'U.S. spy balloon,' in paragraph 8)

By Steve Holland and Nandita Bose

WASHINGTON (Reuters) - The White House said on Monday President Joe Biden and Chinese President Xi Jinping will discuss strengthening communication and managing competition when they meet on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit this week.

The face-to-face meeting in the San Francisco Bay Area on Wednesday will be the first between Biden and Xi in a year, with the high-stakes diplomacy aimed at curbing tensions between the two superpowers.

White House national security adviser Jake Sullivan told reporters Biden believes there is no substitute for face-to-face diplomacy to manage the complex relationship.

"We anticipate that the leaders will discuss some of the most fundamental elements of the U.S.-PRC bilateral relationship, including the continued importance of strengthening open lines of communication and managing competition responsibly so that it does not veer into conflict," Sullivan said, referring to the People's Republic of China.

"The way we achieve that is through intense diplomacy. That's how we clear up misperceptions and avoid surprises."

Sullivan said Biden would go into the summit "on a solid footing," having positioned the United States to be able to compete effectively at home and abroad and with "the strongest recovery and lowest inflation of any leading economy."

He said Washington is looking for specific outcomes from the meeting and hoped to see progress in reestablishing military-to military ties with China and in combating the trade in fentanyl that has become a scourge in the United States.

China cut off military-to-military communications with the United States last year after a visit to Taiwan, a democratically governed island China claims as its own, by then U.S. House speaker Nancy Pelosi. Tense relations soured further when the U.S. shot down a Chinese spy balloon in February.

Sullivan said communication between the militaries was the way to ensure competition did not veer into conflict and that China had been "constructive" on the issue in dialogue leading up to the summit.

"We will see what happens in San Francisco and the President will be able to report after the meeting, whether in fact, we've made progress on restoring military-to-military links," he said.

Biden and Xi have known each other for more than a decade and have shared hours of conversation over six interactions since Biden's 2021 inauguration.

However, they have met only once in person since then and Xi has not visited the United States since 2017. Analysts and officials say they will come to the table in an atmosphere of mutual suspicion and garbled impressions of what the other is seeking.

The meeting is also expected to cover global issues from the Israel-Hamas war to Russia's invasion of Ukraine, North Korea's ties with Russia, Taiwan, human rights, artificial intelligence, as well as "fair" trade and economic relations, senior Biden administration officials said.

Sullivan said Biden would raise stability across the Middle East, adding that Beijing should share an interest in de-escalation there.

Biden would make the point that Iran acting in an "escalatory, destabilizing way" was not in the interests of China, he said. "And the PRC, of course, has a relationship with Iran, and it's capable, if it chooses, to of making those points directly to the Iranian government."

Leaders from the 21-member APEC forum are due to gather in San Francisco from Wednesday until Friday and the wars in the Middle East and Ukraine have divided opinion among them.

The senior U.S. official for APEC, Matt Murray, told reporters on Monday that the U.S. was working hard to try to get a strong consensus statement from the leaders, but analysts say the divisions make drafting this difficult.

Sullivan said that at APEC Biden would put forward his economic vision for the region and speak about "how the United States is the preeminent driver of inclusive, sustainable economic growth in the Asia Pacific."

(Reporting by Steve Holland, Nandita Bose in Washington; Additional reporting by David Brunnstrom; Editing by Alistair Bell)