Good morning.
Xi Jinping and Joe Biden met yesterday on the edges of the APEC Summit in California. And that, in and of itself, is a good thing. Two wars in the world at the same time are enough. Peaceful relations between the U.S. and China are critical to global business and society.
But it is also worth noting how much the world has changed since Xi’s last visit, when he was hosted by Donald Trump at Mar-a-Lago. I’d cite three changes in particular:
—China is no longer the economic juggernaut it was. Growth in China has slowed substantially, real estate problems have become massive, and the once widespread assumption that China would eventually surpass the U.S. as the world’s biggest economic power has evaporated.
—China’s effort to win over the world with “soft” power has faltered. I was struck by a recent graphic prepared by my former colleagues at the Pew Research Center comparing views of the U.S. and China in 24 key countries. The U.S. is seen far more favorably in most countries, and the gap has gotten larger.
—The U.S. is fighting back in the economic competition with China. A surprising combination of Trump and Biden policies have driven perhaps the most dramatic change of U.S. economic policy in my lifetime. For the first time, the U.S. has a robust and quasi-coherent industrial policy designed to protect U.S. business, preserve its technological superiority, and reestablish key domestic industries that were ceded to Asia over the last 20 years.
The difficult question, of course, is whether a weaker China decreases the risk of military conflict…or increases it. And that question is adding to the geopolitical uncertainty weighing on business right now.
By the way, this week’s episode of the Leadership Next podcast features a case study in industrial policy. It features a fascinating woman, Christina Lampe-Onnerud, a central player in both ceding the battery business to China and now fighting to win it back. You can listen on Apple or Spotify.
Also this morning, Fortune is releasing our annual list of the World’s Best Workplaces, compiled with our partners at Great Place to Work. Top 10 on the list:
1. Hilton
2. DHL Express
3. Cisco
4. AbbVie
5. Teleperformance
6. Deloitte
7. Salesforce
8. Stryker
9. Cadence
10. Accenture
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
