(Bloomberg) -- The US and China disagree on so many things, across so many spheres, that other world leaders are increasingly warning of a deeper rupture that could split the global economy.

With the stakes rarely higher, President Joe Biden heads to Bali, Indonesia, for his first in-person meeting with China’s Xi Jinping since taking office last year with promises to try to keep the relationship from getting worse and to reduce the risk of war over Taiwan. But the mood in both Washington and Beijing is only trending toward more confrontation, especially over the island that China claims as its own. 

Biden will show up for the Monday meeting, which will take place at 5:30 p.m. local time in Bali on the sidelines of a Group of 20 summit, with a better hand than anticipated after Democrats posted better-than-expected results in the midterm elections, including retaining Senate control. That will give him more room to maneuver and make it harder for Republicans to scuttle his foreign-policy agenda.

Biden, who will also deliver remarks and take questions after the sitdown with Xi, told reporters in Cambodia that “I’m coming in stronger” to the meeting.

The Chinese leader doesn’t need to worry about pushback at home, particularly after he purged potential rivals at a Communist Party congress last month and set himself up to rule for years to come. But he’s also facing mounting pressure over the strict “Covid Zero” policy that has hurt China’s economy and sparked increasing public discontent.Read more: Xi’s Total Control in China Injects More Risk Into Chaotic World The question is whether these two leaders, whose nations’ economies are so deeply intertwined, are headed toward a permanent separation or can find a way to at least calm relations in a face-to-face meeting. US officials have been cautious to keep expectations low, saying there will be no major announcements -- or “deliverables,” in Washington parlance.

Speaking on Air Force One on Sunday, National Security Advisor Jake Sullivan said the meeting could last “a couple hours” and Biden would make clear the US "is prepared for stiff competition with China but does not seek conflict."

“This is the first opportunity he actually has to sit in person, as president, with President Xi,” Sullivan said. “And he wants to take full advantage of that to lay out clearly his priorities and intentions and to hear the same from Xi Jinping.”

Taiwan Tensions

For the time being, the hope is that Biden and Xi can agree to restart military and climate cooperation that was halted after House Speaker Nancy Pelosi visited Taiwan over the summer, infuriating China. Progress beyond that will be a harder sell. Republican House Leader Kevin McCarthy, who may be in line to replace Pelosi, has said he wants to visit Taipei -- a move that could again feed military tensions in the region.

Biden’s team accuses China of ignoring the status quo on Taiwan and ramping up tensions with a more aggressive posture toward the self-governed island. China similarly blames the US for stoking tensions, pointing to Pelosi’s visit and repeated remarks by Biden suggesting that American troops would defend Taiwan in the event of war -- something no US president has explicitly committed to doing.

“They understand that there is the risk of action-reaction cycles leading to higher tension, then leading to more problems,” said Kurt Tong, a former US diplomat who served across Asia, including as consul general in Hong Kong and is now at the Asia Group consultancy.

Where once the US and China worked together to bolster global economic activity, lately they’ve been embroiled in a trade war, tit-for-tat sanctions and mutual condemnation. They offer fundamentally different views of the world and -- a bigger concern for countries around the globe -- seem to be asking governments to choose between them.

In private discussions, some officials from other countries say they want the US to make a concerted push to improve relations with China for the good of the region, especially given heightened fears of great-power conflict in Ukraine. Biden will discuss Ukraine and North Korea with Xi, but is approaching the meeting as a way to build a floor under the US-China relationship and prevent any further downward spiral in ties, one senior US official told reporters. 

It’s not as if the two leaders have never met: Biden has said that in his lengthy career as a senator and vice president, he and Xi have spent about 67 hours together in person.“We hope the US can work with China and play its responsible role in maintaining world peace and development,” Chinese Foreign Ministry spokesman Zhao Lijian told reporters in Beijing on Friday.

Still, the room for maneuvering has narrowed as more hawkish sentiments prevail in both Beijing and Washington. Relations plunged under former President Donald Trump and remain poor in Biden’s administration over trade, technology, Taiwan, human rights and the handling of the Covid-19 pandemic. 

‘Red Lines’

“What I want to do with him when we talk is lay out what each of our red lines are,” Biden told reporters Wednesday. “Understand what he believes to be in the critical national interest of China, what I know to be the critical interest in the United States. And to determine whether or not they conflict with one another.”Biden intends to argue that the People’s Republic of China should work with the US to restrain North Korea’s nuclear weapons program and military provocations — or face the prospect of an expanded American military presence, according to Sullivan.Biden met with Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol on Sunday on the sidelines of the Association of Southeast Asian Nations summit in Phnom Penh, Cambodia, in a show of solidarity over North Korea.

Sullivan told reporters after the meeting that it gave Biden a chance to explain "what he intended to do in Bali, and to make sure that he was well coordinated with his closest allies."

The run-up to the Biden-Xi meeting has echoes of a similar encounter the US president had in the first summer of his administration, when he traveled to Geneva to sit down with Russian President Vladimir Putin. The language and the messaging was almost identical, with the US goal to set guardrails on the relationship and keep it from getting any worse. Less than a year later, Russia invaded Ukraine and the US has severed almost all ties with Russia.

The China relationship is a different thing altogether given how closely the world’s two largest economies are now intertwined, on everything from Apple Inc.’s China-built iPhones to rare earth metals, solar panels and cheap consumer goods. Biden is also under pressure from many more nations -- such as security partners across Southeast Asia -- that worry a war over Taiwan would devastate them too. 

“Beijing’s priority is about what it can show the world from the meeting, rather than what it can directly gain from the meeting given the lack of hope about improving US-China relations,” said Yun Sun, a senior fellow and director of the China Program at the Washington-based Stimson Center. “To get US concessions and cooperation is important but is not the only priority.”

--With assistance from Colum Murphy, Justin Sink and Josh Wingrove.

(Updates with time of Xi-Biden meeting)

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