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Are relations between the U.S. and China simmering in tropical Bali?
Joe Biden and Xi Jinping have come face-to-face in Bali, Indonesia on the sidelines of the G20 Summit
Chinese President Xi Jinping has made his second international trip since the onset of the Covid-19 pandemic.
The virus has killed over 5,000 people in China, and 6.6 million around the world.
Beijing maintains a Covid-zero strategy, which has been criticised by Human Rights Watch as “draconian”.
But for one of the world’s biggest superpowers, the so-called ‘democracy versus authoritarianism’ narrative is one Beijing is attempting to stamp out.
This was President Xi’s first face-to-face meeting since his U.S. counterpart, Joe Biden took office nearly two years ago.
As Xi touched down in Bali, Indonesia for the G20 Summit, a range of bilateral talks had already been arranged.
His meeting with President Biden was high on the agenda, and signals a dialogue, which the U.S. was denied with Russian President Vladimir Putin, after he withdrew his personal invitation to the event.
Instead, Russia’s Foreign Minister Sergei Lavrov is in attendance.
At China-U.S. meeting, which is understood to have lasted three-and-a-half hours, there was no secret about the ongoing rivalry between the two states.
“We need to find the right direction for the bilateral relationship going forward and elevate the relationship,” Biden said.
Meanwhile, China’s Foreign Ministry said “President Xi pointed out that the world is at a major inflection point in history.”
President Biden sought to rally G20 nations to condemn the use of nuclear weapons in Ukraine.
Xi said he was “highly concerned” by the ongoing conflict, while Biden described the war as “brutal” and “irresponsible”.
A major point for international relations
Twenty of the world’s largest economies have gathered in Bali to exchange their shared challenges: inflation, supply chain pressures, and post-pandemic recovery.
It also provides the space for countries to hold face-to-face meetings on the sidelines of the event.
For example, Australia has shared a defence and security partnership with the U.S. for over 70 years.
In addition, Canberra’s era of economic engagement with Beijing was crucial during the height of the Global Financial Crisis.
Australia’s Prime Minister Anthony Albanese will also come face-to-face with his Chinese counterpart during bilateral talks in Bali.
Meanwhile, his Minister of Defence Richard Marles was speaking in Sydney as President Xi held closed-door talks with Biden.
“Australia values a productive relationship with China. And we expect China will play a more prominent role consistent with its economic and strategic weight,” Marles told delegates at the Sydney Institute Annual Dinner on Monday night.
“We seek that China’s increasing influence is exercised in a manner which reinforces the global rules-based order and promotes habits of cooperation that benefit the interests of all countries.”
RICHARD MARLES, AUSTRALIAN DEFENCE MINISTER
Marles described Australia’s approach to the Indo-Pacific region as “sober, responsible, and clear-eyed statecraft”.
The ANZUS Alliance—between Australia, New Zealand and the U.S.—has been the cornerstone of Canberra’s defence policy.
Today, the alliance provides technology, and intelligence advantages, which Australia would be challenged to develop on its own.
“That enhances Australia’s sovereignty. It does not diminish it,” Marles said.
However, China’s increased dominance in the region has raised eyebrows between likeminded allies like the U.S. and Australia.
China’s Ministry of Foreign Affairs said competition can exist, and Washington should not seek to out=perform Beijing.
“China-U.S. relations should not be a zero-sum game where one side out-competes or thrives at the expense of the other,” the ministry said.
Why does this matter?
Biden and Xi made it clear they want to avoid any conflict, for now.
The White House readout from the meeting noted Biden raised “objections to the PRC’s coercive and increasingly aggressive actions toward Taiwan”.
The language was clear: the ongoing tensions “undermine peace and stability” and “jeopardise global prosperity”.
President Biden also raised concerns around human rights abuses and non-market economic practices in relation to U.S. workers.
But President Xi reminded his U.S. counterpart about the global clash between democracies and autocracies, and concerns about Beijing being misunderstood through this lens.
“Neither side should try to remould the other in one’s own image or seek to change or even subvert the other’s system.”
CHINA’S FOREIGN MINISTRY OF FOREIGN AFFAIRS
“Instead of talking in one way and acting in another, the United States needs to honour its commitments with concrete action,” China’s Foreign Ministry said.
Washington’s foreign policy changed dramatically since President Richard Nixon’s initial engagement with Beijing.
Since then, China has developed the world’s largest navy, and has entered into the big league of world powers.
The question remains: will tensions reach boiling point?
News
U.S. and Israel attack Iran, escalating regional conflict
U.S. and Israel strike Iran, escalating war fears and risking wider regional conflict for the second time in eight months
U.S. and Israel strike Iran, escalating war fears and risking wider regional conflict for the second time in eight months
– U.S. and Israel launched strikes against Iran amid fears of a broader regional conflict.
– Iranian officials warn that attacks could lead to full-scale war as they prepare for retaliation.
The attack marks the second war between the U.S., Israel, and Iran within eight months, raising concerns about a wider regional conflict in a critically important economic area.Israeli Defence Minister Israel Katz confirmed the strikes and declared a state of emergency across all areas of Israel.
The U.S. also carried out strikes as part of the operation, according to a U.S. official.
The military operation followed a month of U.S. military buildup, ignited by President Trump’s commitment to support Iranian protesters who demonstrated against the regime in January.
BREAKING:
Israel is currently striking Iran’s capital, Tehran. pic.twitter.com/xQ3lZSQm5h
— Globe Eye News (@GlobeEyeNews) February 28, 2026
The President consistently warned Iran could face military action if it continued its nuclear program. Vice President JD Vance stated that Iran’s responses in two negotiation rounds failed to meet U.S. expectations.
Trump address
In a video address announcing the military operation against Iran, President Trump said the U.S. was facing “imminent threats” from Tehran, though he did not detail specific evidence to support that claim.
Instead, he pointed to a history of Iranian aggression and reiterated broader concerns about the country’s nuclear activities, backing of regional proxy groups and its ballistic missile programme.
Iran’s missile development has featured prominently in the administration’s recent justification for military action, with Trump raising it again during Tuesday’s State of the Union address.
However, publicly available U.S. intelligence assessments have indicated that Iran had not decided to build an intercontinental ballistic missile.
Analysts have also noted that, while Tehran possesses missiles capable of reaching parts of Europe, it still faces significant technological barriers before developing a weapon able to strike the U.S. successfully.
Escalating Tensions
Iranian officials cautioned that any attack would provoke retaliation, warning that even minor strikes could escalate into a full-scale regional war.
The nation has prepared for conflict by mobilising its forces, reinforcing its nuclear facilities, decentralising decision-making, and tightening internal security measures.
‘Trump Has Met the Moment,’ Says Sen. Lindsey Graham
In his first interview since the U.S. and Israel attacked Iran, Senator Lindsey Graham said that “President Trump has met the moment” and “put in motion the demise of the Iranian ayatollah.”
“This operation will be massive in scope and has as its goal the elimination of the regime as demanded by the people of Iran,” the staunch Trump ally said, adding that the president concluded Tehran couldn’t be trusted to make a nuclear deal. “It has been a dream of mine for so long that the ayatollah’s murderous regime would be replaced by the people who seek a better life for themselves and their country.”
Graham, echoing Trump, acknowledged the potential risks facing U.S. forces involved in the mission. “If there are death or injuries in this operation, I can say without hesitation that they sacrificed for a noble cause, a safer America and a more just world,” he said.
“The consequence of leaving the regime in place, after all the terrorism, and the slaughter of 30,000 of its own citizens, would have been catastrophic for America’s national security,” Graham continued, referencing estimates of those killed during a January crackdown on anti-regime protestors.
The senator, who recently travelled in the Middle East and has long taken a hawkish position on Tehran, suggested the potential fall of the Iranian regime could revive diplomatic efforts to normalise relations between Israel and Saudi Arabia, describing it as “the biggest regional prize of all.”
“When the regime collapses, the region will spread toward a new dawn, and that normalization will take up where it left off,” Graham said.
News
Crude oil prices spike amid U.S.-Israel military action
Crude oil prices soar as tensions escalate with US and Israeli military actions against Iran
Crude oil prices soar as tensions escalate with U.S. and Israeli military actions against Iran
– Oil prices surged after US and Israeli military actions against Iran, with Brent crude at $72.5-$72.9 per barrel.
– Tensions in the Middle East have impacted markets, prompting OPEC+ to consider increasing production to stabilise prices.
Crude oil prices rose sharply following military action by U.S. President Donald Trump and Israel against Iran.
Brent crude oil now trades between $72.5 and $72.9 per barrel, while the US benchmark West Texas Intermediate (WTI) is around $67 per barrel.
Energy markets
Escalating tensions in the Middle East have significantly impacted global energy markets, with oil prices increasing over 15 per cent since January.
Israeli forces initiated a pre-emptive strike in Tehran, resulting in multiple explosions and a marked escalation in conflict.
Israeli Defence Minister Israel Katz labelled the actions as vital for neutralising Iran’s nuclear and missile capabilities.
Diplomatic negotiations between the US and Iran, which had resumed earlier in February, collapsed earlier this week in Geneva.
Production Increase
Iran, a key OPEC member, produces substantial oil and lies strategically near the Strait of Hormuz, a critical transit point for approximately 20 per cent of the world’s oil.
OPEC+ representatives have indicated to Bloomberg that a more aggressive production increase will be considered in an emergency meeting scheduled for Sunday.
The alliance is assessing approaches to mitigate the impact of the recent developments on oil markets.
News
Markets brace for turmoil after U.S. strikes Iran
Markets brace for turbulence as U.S. confirms major combat operations in Iran, sparking fears of increased oil prices and volatility
Markets brace for turbulence as U.S. confirms major combat operations in Iran, sparking fears of increased oil prices and volatility
– Market turbulence is expected after the U.S. announces major combat operations in Iran.
– Oil prices may rise due to increased geopolitical risks and uncertainties in U.S.-Iran relations.
Florian Weidinger, co-chief investment officer at Santa Lucia Asset Management, noted that the ramifications from Iran could surpass those from Venezuela, as the latter primarily affects specific heavy crude markets. Analysts expect oil prices to rise significantly as a result of the situation.
Market experts highlight the Strait of Hormuz as a critical oil chokepoint, with about 13 million barrels per day transiting the area in 2025.
Past military actions in the region have resulted in short-term volatility in equities, with potential movements toward safer assets such as gold and government bonds anticipated.
Market Outlook
Investors are advised to remain cautious as they assess potential Iranian responses. While some market positioning reflects a crisis atmosphere, the future of U.S.-Iran relations remains uncertain. The duration of conflict will play a key role in shaping market reactions.
Analysts suggest that a short campaign may lead to temporary price spikes, while a prolonged conflict could result in deeper market impacts and a shift in asset allocations.
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