That President Biden has described as talks in San Francisco with the Chinese leader, Xi Jinping, as their most constructive and productive discussions yet. Mr. Biden said they agreed to resume high-level military-to-military communications, and he said clear and direct contact was necessary to avoid accidents or misunderstandings. Earlier, Mr. Xi described China's relationship with the US as the most important in the world. President Biden made his comments at a news conference that Mr. She didn't attend.

I welcome the positive steps we've taken today, and it's important for the world to see that we're implementing the approach in the best traditions of American diplomacy. We're talking to our competitors and just talking, just blunt with one another. So there's no misunderstanding as a key element to maintaining global stability and delivering to the American people. And the months ahead, we're going to continue to preserve and pursue high-level diplomacy of the PRC in both directions to keep the lines of communication open, including between President, she and me. He and I agreed that either one of us could pick up the phone, call directly, and we would be heard immediately. I think I know the man. I know his mode of Sopranos. We have disagreements. He has a different view than I have and a lot of things, but he's been straight. I don't mean that he's good, better, or different. He's just been straight.

Well, let's go live to San Francisco now where all this was taking place. Our news correspondent, Helena Humphrey, was there, of course, is there now. So, Helena, going into all of this, expectations were low. So what came out of their meeting?

They were indeed low, Sally, but coming out of these talks, the White House said that these conversations were candid and they were also constructive, with agreements for cooperation on a range of issues, firstly, talking about that military-to-military cooperation, perhaps making the world feel like a slightly safer place, particularly, bearing in mind some of those close calls that we've seen between US and Chinese military assets, for example, with regards to planes in recent months over the South China Sea. Now at least they can pick up the phone, army to army, and make sure things aren't misinterpreted, essentially, that it isn't seen as an act of war, were there to be an accident? On that piece with regards to AI, an agreement for a working group to begin to potentially discuss some guardrails in that swiftly developing technology, which China is very advanced in. Then when it comes to fentanyl and an agreement to continue to work together on countering narcotics, I think that one felt more personal for the United States, particularly as this country is still in the grip of an opioid epidemic. And of course, President Biden going into 2024, an election year, and we'll have to make some progress on that.

But President Biden was asked at the end of that press conference, Do you still consider President she to be a dictator? He stopped. He said very simply, Yes, because he is still the leader of a communist country, a country with a political system, which is very different from our own. But I think overall, what was significant is that these leaders had these talks. They came face-to-face. They committed to talking some more once again. And after a year of extremely frosty relations, I think that is significant.

Now, when it comes to foreign policy, of course, there has been a lot going on between the US and China, in particular about Taiwan. So what was broached today?

Absolutely. And of course, there's a lot going on around the world right now that they had to touch on. Firstly, when it came to the war in Ukraine, Beijing has never officially condemned Russia's full-scale invasion. She, this time saying he believed there had to be a diplomatic solution. When it comes to Israel, Hamas, President Biden calling on President Trump to speak to Iran to ensure that this conflict doesn't escalate further. As you mentioned there, Sally, Taiwan, I think the most serious issue on the table today. On that regard, President Xi called on Washington to stop sending weapons to Taiwan, something that Washington will not agree to. And with regards to those upcoming and key elections in Taiwan in 2024, President Biden made clear that those elections should be free and they should be fair, and there should be no Chinese meddling in them. Now President Biden has said that his policy with regards to these commitments is to trust, but he also said trust and then verify.

Okay, Helena, thank you very much indeed. Helena Humphrey there in San Francisco for us talking about what was achieved in the meeting, first second face-to-face meeting between China's President, she, and President Biden during President Biden's presidency. Let's listen to this press conference now.

For any great cause to succeed, it must take root in the people. It must gain strength from the people and be accomplished by the people. Growing China-US friendship is such a great cause. Let us governise the Chinese and American peoples into a strong force to renew China-US friendship, advance China-US relations, and make even greater contributions to world peace and development. Thank you.

There of China, President Xie there of China addressing the press in a very short press conference that's just taken place where he has just wrapped up the official proceedings of his day, where he met, of course, in face-to-face talks with US President Biden. But President Xie has just been wind and died at a Ritz-ie-Gala dinner at the Palace Hotel in San Francisco, where he was a guest of honor. Many leaders from US business were reported to be there. Let's talk to James Early all about this. Chief Investment Officer at BBAE, a Digital Investment Platform, joining us live from Palo Alto. James, you lived and worked in China for some 10 years. Talk us through this meeting today. What do you make of it so far?

Well, Sally, I was in the camp with low expectations, and I would say I'd give both leaders at least an A-minus, which is pretty good. I'm probably a stiff grader. It's still about optics. If you look at the last five diplomatic meetings between the US and China, they've mostly been nothing but to use a technical term. A good photo ops, but not really a lot of substance. But already, the first session, there are two more closed-door sessions, by the way, but this first session, we had military-to-military dialog restored. Importantly, as a China watcher, if I look in the Chinese media, the social media, and the official media, they're praising the US for the past two weeks. I mean, of course, they're going to do that because she's not going to go to a country that's a mess. They want to make it look good. But it's quite a turnaround from a month ago, I would say. We're seeing a big shift in the propaganda. We've got at least one concrete win. I'm not sure how much more we're going to get, but I'm happy with that.

In terms of trade, which, of course, is so critical for both economies, there's a lot been going on, in particular, US restrictions on semiconductors, et cetera. There are a lot of big bosses from the technology sector in this dinner just now with President Trump. What do you think may have achieved in terms of trade?

Well, the big bosses have power to lobby and that's it. I don't think, Biden, I don't think the US government is going to bend too much on those export restrictions. They found out the hard way that if you've got a list of bad companies at a country you don't sell to, but you sell to good companies there. If this is an authoritarian regime like China is, the government has the right to force those good companies to transfer the technology into those ones that were on the blacklist. That's clear what's happening. It demonstrates that export controls are really hard to enforce with an authoritarian regime, excuse me. I don't know that those tech leaders have a lot of lobbying sway at this point. I think they've paid $40,000 a seat, which is not cheap for people like you and me, but I guess for them, they got the money. But I think it's more for optics. I think it's more for visibility. I don't see the US bending much on trade, even though that's what Xi Jinping probably most wants.

Yeah, interesting. Probably what he most wants. But let's not forget the political scene in the US with an election not far away. James, thank you very much indeed. James Early, Chief Investment Officer at BBAE.