Can the US-China thaw last?

US President Biden and China’s Xi hold talks in San Francisco [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. It’s an encounter that’s been declared a success even before US President Joe Biden and Chinese leader Xi Jinping sit down today in San Francisco. Their last talks — in Bali a year ago — were also seen as a breakthrough in putting a floor under a troubled bilateral relationship. But the thaw didn’t last, derailed by a furor over an alleged Chinese surveillance balloon that floated into US airspace. It’s taken months of [delicate diplomatic work]( to get back to this point. Officials have had to skirt frictions over technology, trade, human rights and Taiwan, alongside US unease over China’s prevaricating on Russia’s war on Ukraine. China has bought a bunch of US soybeans in the past week. It’s making noises about a purchase agreement for Boeing’s 737 Max jetliner. And Xi is set to promise to crack down on the export of fentanyl, the opioid behind a devastating health crisis in America. The Chinese president in turn gets a key government body taken off a Commerce Department blacklist, weakening US measures to punish China over human-rights abuses. And he gets to mix and mingle with US business executives. Washington is allowing a large number of Chinese journalists to cover the event: Xi needs good press as he seeks to settle his wobbly economy and Chinese markets and burnish his image at home. There was a sizable and effusive crowd bussed in for his [airport arrival](. But how long can the bonhomie last, and how meaningful might it be? This meeting is only happening now because it suits both Biden and Xi, because they feel they can benefit. Beyond San Francisco, Xi is still working to build a fundamentally different global architecture where American clout is challenged and diminished. Things are getting heated again in the South China Sea over Beijing’s expansive territorial claims. There is an election looming in Taiwan, a democratically-run island that China sees as its own. The US meantime is on a protectionist arc no matter who is in the White House after 2024. Biden may be politer than his predecessor and potential Republican nominee Donald Trump, but he’s very much a protectionist. And there aren’t many votes in dismantling tariffs on China. Like Bali, this meeting will achieve an immediate goal. Lines of communication are opened and may stay so for a while. Xi and Biden have known each other for more than a decade — before either was the top leader. But it is, above all, a transactional relationship. — [Rosalind Mathieson]( Xi arriving at San Francisco International Airport yesterday. Photographer: Justin Sullivan/Getty Images Global Must Reads The White House is becoming increasingly frustrated with Israel’s conduct in the war against Hamas as the civilian death toll in Gaza mounts and the administration’s calls go unheeded, widening a rift between the close allies. As Courtney McBride, Ben Bartenstein and Peter Martin report, US officials are having what they describe as more [difficult conversations]( with their Israeli counterparts, only to have Israel ignore them. Patients at the al-Shifa hospital in Gaza City on Nov. 10. Photographer: Getty Images The UK’s policy to deport asylum seekers to Rwanda is unlawful, the nation’s highest court ruled, [leaving in tatters]( Prime Minister Rishi Sunak’s flagship plan to stem cross-channel arrivals in small boats. The ruling came hours after an excoriating letter from Suella Braverman, the home secretary dismissed on Monday, that [underscored the fury]( facing Sunak among right-wing Conservatives. Justin Trudeau is facing calls to quit as Canada’s prime minister, even from stalwarts in his own political party, as voter anger about housing and inflation grows and opinion polls show [sagging support](. Trudeau may not have to face voters until 2025, but that’s enough time for him to resign or be forced out of the leadership of the Liberal Party by an increasingly restless caucus. Germany’s top court struck down a key element of the government’s plans to address climate change and transform the economy, dealing Chancellor Olaf Scholz’s coalition a [major setback]( that throws its budget policy into disarray. The Federal Constitutional Court ruled that the shifting of €60 billion ($65 billion) earmarked to tackle the Covid-19 pandemic into an off-budget fund violated German constitutional law. Poland is expected to access some suspended European Union [financing]( by the end of the year, as opposition leader Donald Tusk prepares to take over as prime minister. Jorge Valero and Natalia Ojewska report that the European Commission plans to sign off on a request by Poland’s nationalist government to tap a portion of around €2.8 billion in aid earmarked to wean EU member states off Russian energy. Taiwan’s opposition parties have agreed to run a joint campaign in January’s election, paving the way for a [radical shakeup]( of the race. North Korea tested new engines for intermediate-range ballistic missiles, a move that could help Pyongyang [deliver quick strikes on US bases]( in places such as Guam. Brazilian President Luiz Inacio Lula da Silva backed Argentina’s Sergio Massa ahead of Sunday’s presidential election, the latest leader taking a side in a contest that has highlighted Latin America’s [deepening ideological divisions](. Washington Dispatch The US Senate today prepares to take action on a [temporary funding measure]( to keep the government in operation until early in the new year. The bill, advanced by Republican Speaker Mike Johnson, passed the House yesterday, thanks to broad Democratic support. While it doesn’t contain assistance for Ukraine and Israel that the White House and many Republican and Democratic senators want, they are facing a Friday night deadline, when federal funding will lapse. The Senate leadership will need the cooperation of all members to overcome procedural obstacles to meet the timeline. Majority leader Chuck Schumer said he would work with his Republican counterpart Mitch McConnell to pass the bipartisan extension of funding “as soon as possible.” Many senators may have another incentive to swiftly approve the bill and send it to Biden for his signature: They are eager to get an early start to the Thanksgiving recess. One thing to watch today: Retail sales for October will be released by the Census Bureau. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 5pm ET weekdays on Bloomberg Television. Chart of the Day The US and China agreed to redouble [joint action to tackle climate change](, reviving their collaboration at a crucial moment ahead of UN talks starting later this month. Among the steps to be taken by the world’s two biggest polluters are support for global efforts to triple renewable capacity by 2030, accelerating the domestic buildout of clean energy to replace fossil fuels, and cooperation to limit emissions of methane and nitrous oxide. And Finally For centuries, European traders plied the Senegal River in West Africa as they procured gold, ivory, animal hides — and human slaves. Now foreign merchants are back, [this time for the river itself](. Read how an investment company based in New York is using scarce water resources that supply Senegal’s capital, Dakar, to irrigate alfalfa crops ultimately destined for livestock feed in the wealthy Persian Gulf. Amadou Ba, chief of Metin Village, Senegal. Photographer: Annika Hammerschlag/Bloomberg More from Bloomberg - Listen to our [X Space discussion]( on the meeting between Xi and Biden - [Economics Daily]( for what the changing landscape means for policy makers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - [Next Africa](, a twice-weekly newsletter on where the continent stands now — and where it’s headed - [Business of Sports](, delivering the context you need on the collision of power, money and sports - Explore more newsletters at [Bloomberg.com]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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