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What’s on the economic agenda as President Biden prepares to sit down with Xi Jinping

US President Joe Biden and Chinese President Xi Jinping are set to meet face-to-face on Wednesday for the first time in a year, capping an eventful 12 months of up-and-down relations between the two largest economies in the world.

The highly anticipated meeting focused on stabilizing the relationship between the two superpowers is expected to take place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in the San Francisco Bay Area.

Press Secretary Karine Jean-Pierre announced the meeting in a statement Friday morning.

Members of Biden’s team previewed their plans last week, saying the overall goal is for a drama-free gathering to continue to lower the temperature as well as to open new lines of communication on both economic and military fronts.

"We are going into the meetings with realistic expectations about what we're going to achieve," a senior administration official said Thursday, putting a damper on any expectations that any big breakthrough is in the offing.

Key context is also the status of the Chinese economy. China Beige Book co-founder and CEO Leland Miller recently told Yahoo Finance that China's ongoing economic slowdown means "we're in the middle of a new norm" as President Xi oversees an economy that is set to grow much more slowly than in previous years.

Xi formally confirmed his attendance in California in a brief statement Friday morning. China's foreign minister Wang Yi recently previewed the meeting by nodding toward the importance of communication and stabilizing relations in a statement while adding that the current relationship is "not smooth and cannot be left to 'autopilot.'"

China's leader was also reportedly set to meet with business leaders during his visit to try to alleviate some fears about China's economic future.

It will be the seventh interaction between the two leaders since Biden’s inauguration and the second in-person meeting. Biden and Xi last met face-to-face almost exactly one year ago in Bali, Indonesia.

Here are some of the top items that White House officials and outside observers expect to be on the agenda:

US President Joe Biden (R) and China's President Xi Jinping (L) shake hands as they meet on the sidelines of the G20 Summit in Nusa Dua on the Indonesian resort island of Bali on November 14, 2022. (Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images)
US President Joe Biden and Chinese President Xi Jinping shake hands in November 2022 at the G20 Summit on the Indonesian resort island of Bali. (SAUL LOEB/AFP via Getty Images) (SAUL LOEB via Getty Images)

The status of Taiwan... with a special focus on its coming election

Taiwan would be near the top of the agenda for any meeting, but an upcoming election there likely makes the issue even more pressing.

The island, a hub of semiconductor manufacturing both for the Chinese and US economies, is set to elect a new president in January with incumbent President Tsai Ing-wen facing term limits.

The additional uncertainty that is bound to surround any election comes after two years of US-China tensions over Taiwan following a historic 2022 visit by then-House Speaker Nancy Pelosi.

Biden officials underlined this week that the US is not looking to make any waves around Taiwan’s election — or change its longstanding "one China" policy — while Biden is also simultaneously telegraphing that the US could respond forcefully if there is evidence of Chinese interference in the coming balloting in Taiwan.

TAIPEI, TAIWAN - AUGUST 2: (----EDITORIAL USE ONLY - MANDATORY CREDIT -
Then-House Speaker Nancy Pelosi was welcomed by Taiwanese Foreign Minister Joseph Wu, left, after landing at Songshan Airport in Taipei, Taiwan in August 2022. (Anadolu Agency via Getty Images) (Anadolu Agency via Getty Images)

Of course, the coming US election could also be on the docket with President Biden himself set to face voters next November and experts warning that China has been ramping up its efforts to interfere in elections around the world.

A wide array of other world hot spots are likely to come up in the back-to-back meetings that feature some one-on-one time between Biden and Xi and other gatherings featuring top aides.

The status of North Korea — and Kim Jong Un’s burgeoning friendship with Vladimir Putin — is set to be discussed as well as the ongoing war in Ukraine and unrest in the Middle East.

When it comes to the Middle East, a senior US administration official said the White House expects Biden will press Xi to use China’s growing influence to try and sway Iran to not escalate the regional tensions surrounding the fighting between Israel and Hamas in the Gaza strip.

Keeping economic and military lines of communication open

It's the first time since before the COVID pandemic that Xi Jinping will visit the United States. Another key focus should be on keeping the recently busy lines of communication open after a freeze in recent years.

China's President Xi Jinping (R) listens to US President Barack Obama (L) in a P5+1 meeting during the Nuclear Security Summit at the Walter E. Washington Convention Center on April 1, 2016 in Washington, DC.  / AFP / STEPHANE DE SAKUTIN        (Photo credit should read STEPHANE DE SAKUTIN/AFP via Getty Images)
Xi Jinping traveled to Washington for a Nuclear Security Summit and meetings with officials like then-US President Barack Obama (L) in 2016 (STEPHANE DE SAKUTIN/AFP via Getty Images) (STEPHANE DE SAKUTIN via Getty Images)

Much day-to-day communication between the US and Chinese governments ceased in the aftermath of Pelosi’s trip and the 2023 Chinese spy balloon incident but has gradually been picking up.

Treasury Secretary Janet Yellen has been in San Francisco for two days of meetings with Chinese Vice-Premier He Lifeng to discuss macroeconomic issues like interest rates and China’s economic slowdown, with an overall focus on improving communication between both nations' economies.

"The United States has no desire to decouple from China," Yellen reiterated Thursday as the meetings got underway. "We seek a healthy economic relationship with China that benefits both countries over time."

The meetings come after months of high-level diplomatic shuffling on the economy by Yellen as well as by other officials, from Secretary of State Antony Blinken to Commerce Secretary Gina Raimondo.

One key upcoming economic deadline that could be on the agenda is trade. While Biden has done little since taking office to change the Trump-era tariffs on China, his administration is in the process of reviewing some tariff exclusions that are now set to expire at the end of this year.

US Treasury Secretary Janet Yellen and China's Vice Premier He Lifeng shake hands at the start of their two-day meeting ahead of the Asia-Pacific Economic Cooperation (APEC), in San Francisco, California, on November 9, 2023. (Photo by Loren Elliott / AFP) (Photo by LOREN ELLIOTT/AFP via Getty Images)
Treasury Secretary Janet Yellen and China's Vice Premier He Lifeng shake hands Thursday at the start of their two-day meeting ahead of the Asia-Pacific Economic Cooperation (APEC) in San Francisco. (LOREN ELLIOTT/AFP via Getty Images) (LOREN ELLIOTT via Getty Images)

Military communication between the US and China should also be a key topic in the wake of the spy balloon incident earlier this year that raised military tensions between the two nations to new heights.

In all, Biden officials are hoping for incremental progress on an array of fronts in lieu of any headline-grabbing breakthrough.

A senior administration official noted this week that as both sides have been preparing for the meeting, the US has communicated that "basically every element in our bilateral relationship will be on the table for discussion."

This post has been updated with additional developments.

Ben Werschkul is Washington correspondent for Yahoo Finance.

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