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If the proof of the depth and gravity of the economic crisis that is engulfing the world, has just been provided by the three and a half hour meeting between the presidents of the United States, Joe Biden, and of China, Xi Jinping.

The rapprochement, unthinkable until recently, between the leaders of the two large capitalist structures of the present, is the consequence less of affinity than of necessity.

That summit, alongside the G-20 in Bali, does not break up, nor does it perhaps intend to do so, rivalry between the two powers, even less in a period of heightened protectionist nationalism. Nor does it quench the core competency of the time, which is defined by technological leadership, a race in which only Western obstacles mitigate but do not stop the Chinese onslaught.

Yu Jie, a sinologist from chatham house london refers to it with ingenuity: it is “one small step but a step in the right direction. It will not solve the material differences between the two sides, but it will alleviate the deterioration of binational relations”. This was immediately evident in the reactions in both capitals.

The signs of “frankness” and closeness between the leaders have multiplied, according to the description of Biden, who went to the Chinese hierarch’s hotel to greet him at the beginning of the meeting. “A profound and constructive exchange,” said the Asian president’s spokesman. The press organs of the People’s Republic observed this cautiously “coexistence is possible”. Remarkable.

In principle, it is about saving a link that for other specialists, such as David Sacks of Foreign Relations Councilcould lead to a shared understanding to establish limits that channel binational competition while avoiding risky deviations. “Even if it would seem a modest result, it would be a positive development for a relationship that has steadily deteriorated.

The question of the crisis

These looks are correct but expose a flaw. This meeting, undoubtedly the most striking fact of the current stage, should not be taken only motivated to cushion the risk of an accident in the race for hegemony.

The idea of ​​a war between the powers that confirms the Thucydides trap, that the emerging structure will inevitably contend with the one that rules, entertains the eyes of a legion of analysts. but the scene it is far from that destination for a condition of mutual necessity.

The important thing, behind the scenes of this rapprochement, is that it is constituted by that crisis which requires a sort of agreement that avoids a collapse without winners in the accumulation system. The economy, you know, It is the factory of politicsfor better or worse.

The war in Ukraine is relevant at this point, even if it is not the focus of the formulation. It is a defect to be fixed. That conflict did not cause but accelerated a global deterioration that has been intensifying since long before the other pandemic-related crisis.

Before 2019, when the disease began to manifest itself, signs of the end of a long economic cycle were multiplying. Birth of operations that guaranteed higher rents in the short term than in the long term. A failure that exposed distrust in the future. IS yield curve inversion it was a historical indicator of the arrival of the recession.

Lately this phenomenon has become evident again. Through April, the ten-year US Treasury yield paid less than the two-year offering. Since the 1970s these behaviors have flared up a red light on the dashboard.

That alert had flashed even before the end of the last decade, when the IMF and the World Bank raised the need for an urgent rapprochement between Washington and Beijing which it kept the wheel of the system in motion.

Those voices were raised against the protectionist trade war that Donald Trump’s White House had launched with enormous arrogance against the People’s Republic. China’s economic interaction with the rest of the world, especially with Europe and North America, has led to such nationalist maneuvers a time bomb for the whole system.

That call has not been heeded, nor by the new Biden government. Two years ago, at the March 2021 summit in Anchorage, Alaska, Chinese and American diplomats teeth shown, in a fight of enormous aggression built on the assumption that the fight would be won.

That is why Bali’s presidential nomination is so relevant. This time the depth of the crisis is such as to prevent distractions and forces us to postpone the contradictions in the bilateral agenda, including acute issues such as the fate of Taiwan.

Walk like sleepwalkers

Let’s see what the context is. A few hours ago, the head of the International Monetary Fund, Kristalina Georgieva, drew attention during the Bali meeting to a worsening of the global situation to the extremes that she, she told the presidents, “we can be walking like sleepwalkers towards a poorer and less secure world”.

He argues that some “hopeful signs of recovery” that emerged last year have collapsed “because of a abrupt slowdown in the world economy due to Covid, the war in Ukraine and weather disasters on all continents”.

These unrest are intertwined with the aftermath of inflation unprecedented in more than forty years as shown by the UK, among other central places, and the icy onslaught of rate hikes.

The IMF’s outlook report, published at the beginning of last October, in turn underlines that the planetary economy will drop from last year’s 6% growth to 3.2% in 2022, but significantly only 2.7 in 2023, this in optimistic terms.

“It is the weakest forecast since 2001 except for the global financial crisis (of 2008) and the acute phase of the pandemic and reflects a significant slowdown among major economies,” he said.

The Fund speaks “turbulent challenges” that the world is experiencing and shows that a third of countries will contract between this year and next, with two quarters of reduction in their GDP, i.e. a technical recession.

This scenario has an impact at a social level, but it is particularly worrying at the top because it reduces the space of the markets. In a world that doesn’t grow countries lose power. Prospects for China are equally threatening, with expansion at its worst level in four decades.

The United States and the People’s Republic need each other for the amazing interaction of their economies. This bond is sharpened in a contradictory way at a time when US interests have shifted almost entirely towards Asia, hence the abandonment of the old scenarios that centralized the agenda of the White House. Middle East, for example.

That’s because the future is in Asia Pacific. China knows this and has tried to preserve its influence in its immediate space strengthen their nationalism. This explains the stiffening of the regime and the consecration of Xi Jinping as virtual emperor at the recent XX Congress of the PC.

This transition is controversial, albeit with shares of realism. The Chinese leader assumes total power, but surrounds himself with some surprising figures, such as the almost certain future prime minister, Li Qiang.

He is a leader with strong loyalty to the president, but deeply promarket and tied to the big Chinese capitals with which Xi Jinping has contended. This future executive with a pragmatic profile is the one who will be responsible for reinvigorating the Asian giant’s economy and continuing to link it with the United States.

The Ukrainian war is a failure in the system, much more now because of this situation. It is therefore not surprising that Beijing joined the West and India in the final declaration of the G-20 which, beyond the inevitable rhetorical turns, condemned the conflict and deepened the isolation of the Russian autocrat Vladimir Putin who only bewilderment seems to accompany it.

It is very likely that sooner or later the world will participate a surprise about the fate of Russia and the war that we have entered an inclined plane where Moscow’s chances of imposing exit conditions are increasingly scarce. A fact that is not foreign to the Chinese ally, is beginning to be noticed.

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