The 2 leaders met final week on the sidelines of the Asia Pacific Financial Cooperation leaders’ assembly in San Francisco after the worldwide rivalry between the world powers got here to a head earlier this yr.

Their first assembly in a yr capped months of diplomatic work geared toward normalizing their shaky bilateral relationship derailed by a suspected spy balloon over continental U.S. early 2023 and ex-Home Speaker Nancy Pelosi’s Taiwan go to in August 2022.

“You may see in coming months, the U.S. and China try to place a ceiling on their tensions for very pragmatic and home causes,” Steve Wilford, accomplice and Asia Pacific head of worldwide danger evaluation at Management Dangers, instructed CNBC Monday.

Xi and the Chinese language Communist Celebration are grappling with slowing development on the earth’s second-largest economic system that has been roiled by a disaster in its actual property sector.

“Xi Jinping needs to repair his economic system, he would not want the issue exacerbated by a continued spiral of commerce and know-how tensions with the U.S.,” Wilford mentioned. “And equally, the Biden administration has an election to take care of they usually do not must be distracted by Beijing.”

Biden, 80, is dealing with underwhelming approval rankings, and is trailing Donald Trump in polls in a possible rematch on the U.S. presidential elections in November 2024. Many have cited Biden’s age and his dealing with of the economic system as two of his best weaknesses.

Xi instructed a gathering of American enterprise executives final week that the U.S. and China have to decide on between being adversaries or companions — feedback that contrasted with Biden’s strategy of pursuing strategic competitors with Beijing by proscribing exports of superior U.S. tech to China, whereas on the lookout for areas of cooperation.