A pause on tensions

The US and China show a desire for a broad reset in relations. [View in browser]( [Bloomberg]( US Secretary of State Antony Blinken’s trip to China — the highest level visit of Joe Biden’s administration — shows the desire for a broad reset even as the scope for real cooperation between the world’s two biggest economies remains narrow. The language from both sides has been relatively positive. Blinken’s meeting with Foreign Minister Qin Gang yesterday went for a marathon seven-plus hours. Most notably Blinken met with Chinese President Xi Jinping, who said it was “very good” that progress had been made on a range of unspecified issues. That shows a desire from the very top to put a floor under ties after protracted tensions over trade, business, technology and security. Key Reading: [Xi Tells Blinken ‘Very Good’ Progress Made on US-China Ties]( [Blinken Has ‘Candid’ Talks With China’s Qin on Trip to Mend Ties]( [World Trade Needs Help as China Falters: Bloomberg Trade Tracker]( [Chinese Premier Discusses Ukraine, US With German President]( [Five Tools Europe Will Use to Counter China’s Geopolitical Rise]( That’s likely a relief for all. The Chinese economy has been flashing warning signs; a serious downturn would bleed into the global economy and potentially impact the US as Biden heads into presidential election season. Taking some heat out of the relationship can help keep the focus on supporting growth. It also paves the way for Xi and Biden to meet later this year, either at the Group of 20 summit in India or APEC in the US — or both. In talking about stabilization, though, the language is very general. Talks have been “candid” and “productive.” At the same time each side has kept up the criticism of the other for their economic and security policies — including on Taiwan. The opportunities for collaboration will remain limited. One question is whether they will resume military-to-military talks, an area the US has pushed for. There’s little hope for a breakthrough on technology and cyber. On Russia’s war in Ukraine, Xi’s close relationship with President Vladimir Putin is a high concern for the US — in turn a staunch Kyiv ally. Clearing the air is a step forward. It signals a desire to stop things getting worse. But that’s largely because it is in their mutual interest right now. Their fundamental differences make a long-term fix hard to see. — [Rosalind Mathieson]( Blinken and Xi meet today in Beijing. Photographer: Leah Mills/Getty Images Check out the latest [Washington Edition newsletter](. You can [sign up]( to get it in your inbox every weekday. And if you are enjoying this newsletter, sign up [here](. Global Headlines Ukraine liberated eight villages or towns in the southern Zaporizhzhia region in two weeks, [pushing]( Russian forces back as much as seven kilometers (4.3 miles), Deputy Defense Minister Hanna Malyar said. “Our soldiers are advancing,” President Volodymyr Zelenskiy said in his nightly address. “Position after position, step after step.” Overnight, officials in the Black Sea city of Odesa said air defenses intercepted an attack by four Russian cruise missiles. A US recession that begins soon is probably the best-case scenario for Biden’s chances of returning to the White House. An economic downturn, which most economists are predicting, has [felled the reelection hopes]( of the last three one-term presidents — Jimmy Carter, George H.W. Bush, and Donald Trump, though others have survived them. As Gregory Korte reports, the difference, for the most part, is the timing of a slump: the earlier the better in the election cycle. The Israeli shekel [slumped]( today after Prime Minister Benjamin Netanyahu signaled his intention to press ahead with plans to overhaul the judicial system that have divided the country. Critics say the move would reduce the independence of judges and have conducted mass protests while investors have been unnerved by the plans. Best of Bloomberg Opinion - [Water Risks Are Coming to Bite Investors: Lara Williams]( - [The World Ignores Africa at Its Peril: Brooke Sample]( - [The Ghost In The Machine Shouldn’t Be AI: Parmy Olson]( A bruising week is in store for UK Prime Minister Rishi Sunak, with a parliamentary vote today on his predecessor Boris Johnson threatening to [fuel divisions]( among the ruling Conservatives and the Bank of England set to heap further pain on consumers by raising interest rates again. Sunak’s party trails the Labour opposition by double digits in opinion polls ahead of a general election expected to be held next year. - Opposition leader Keir Starmer pledged that a Labour government would cut energy bills, create jobs and provide more secure power by [sweeping away barriers]( to green projects. Explainers You Can Use - [Macron Gathers Global Leaders Seeking Elusive Deal on Lending]( - [Trillion-Dollar Answers to Tackle a Fast Heating World]( - [Berlin Risks Water Shortages in Fallout From Germany’s Coal Exit]( South Korea’s salvage of large sections of a North Korean rocket that failed shortly after takeoff potentially provides a [trove]( of information about the secretive state’s weapons program. Seoul’s military said the two pieces it recovered from the sea were likely from the rocket’s second stage, which North Korea claimed contained a new engine. The discovery will likely give clues about Pyongyang’s proficiency in engine design and may point to components obtained via sanctions violations. An object presumed to be part of the North Korean space-launch vehicle that crashed into the sea on May 31. Source: South Korean Defense Ministry Handout/Getty Images  Tune in to Bloomberg TV’s Balance of Power at 5pm to 6pm ET weekdays with Washington correspondents [Annmarie Hordern]( and [Joe Mathieu](. You can watch and listen on Bloomberg channels and online [here](. News to Note - The US has a “very strong” [criminal case]( against Trump for allegedly mishandling classified documents, said Bill Barr, who served as attorney general under the former president. - Support for Fumio Kishida [fell in three polls]( carried out over the weekend, threatening the Japanese prime minister’s prospects in a general election that he’s widely expected to call by the end of the year. - Australia’s government opened its campaign to establish an [Indigenous advisory body]( to lawmakers with a national vote due by year’s end, even as polls show mounting opposition to the proposal. - Kuwait formed its fifth government in less than a year, naming new oil and defense ministers, as the OPEC member tries to end a [protracted political impasse]( that has stalled fiscal reform. Thanks to the 37 people who answered our Friday quiz and congratulations to Mitchell Mizel, who was the first to name India as the country that may finalize a deal with the US as early as this week to jointly manufacture fighter-jet engines. And finally ... As industrialized countries around the world confront declining birth rates and aging workforces, Canada is at the forefront of betting on [immigration]( to stave off economic decline. Randy Thanthong-Knight reports that Canada surpassed 40 million people for the first time last week, with growth expected to continue at a rapid pace. For Prime Minister Justin Trudeau’s administration, the massive immigration experiment is a way to broaden the labor market as global competition for skilled workers intensifies. Migrant workers arrive at a farm in Notre-Dame-de-l'Ile-Perrot, Quebec. Photographer: Christinne Muschi/Bloomberg Follow Us Like getting this newsletter? 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