The first high-level meeting between diplomats from China and the new U.S. administration was marked by hardline stances. The rhetoric from representatives of both countries makes it clear that relations will remain tense and, most importantly, that President Biden’s administration will, for the time being, maintain the trade and regulatory restrictions imposed by the previous Trump administration. Analysts believe that President Biden will need to reconcile the many competing interests at stake before he can implement his own strategy. According to the research firm Gavekal, the U.S. must address four main aspects of its relationship with China:

• National security, ensuring U.S. technological and military superiority over China.
• The importance of the Chinese market for U.S. companies, whose annual sales in China total nearly US$600,000 million.
• Economic nationalism, which seeks to rebuild the U.S. manufacturing base.
• The defense of human rights: a growing point of friction between China and the international community.

In the coming months, one of the most significant impacts could result from the implementation of the Foreign Companies Accountability Act, which was passed by the U.S. last year. This law requires Chinese companies listed on U.S. stock exchanges to provide audited financial information, which conflicts with Chinese regulations that prohibit such documents from being sent abroad. This could result in the withdrawal of US$2 trillion in investments in shares of Chinese companies listed on U.S. stock exchanges.