Here’s the subtext of their statements from the G-20 summit in Bali.

Monday’s three-hour meeting between Presidents Joe Biden and Xi Jinping was a bigger deal than it may seem at first glance.

No treaties were signed, no disputes were settled. But the leaders of the world’s two most powerful nations showed that they see the need to step back from confrontation—which some had come to see as inevitable—and to resume diplomacy, which has been laced with suspicion or outright hostility for some time.

The question is whether the two sides can shake off their mutual enmity and negotiate peaceful agreements without conceding vital principles. For now, the tone of the Xi-Biden mini-summit—their first time they’ve met in person since becoming their countries’ presidents—was encouraging, from the warm smiles of their greetings to the unusually mild rhetoric of their “readouts. ” (Those are the official government summaries of what they talked about.)

Biden entered office almost two years ago convinced that US-China relations had taken a turn from engaged partnership to strategic competition. He touted a new alliance called the Quad—a group of countries including the US, Japan, Australia, and India—to contain Chinese expansion in the Pacific. His National Security Strategy, a document released earlier this month, went further and described China as “the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to advance that objective. “

For his part, Xi, in a speech as far back as 2013, portrayed the US and its Western allies as determined “to overthrow the leadership” of the Chinese Communist Party “and China’s socialist system.”

However, in recent months, both leaders have realized that they need each other in order to thrive. The United States cannot secure its global interests while in a state of war or cold war with both Russia and China—and renewed détente with Russia is impossible for as long as the war in Ukraine rages on, possibly for as long as Vladimir Putin is in power.

And Xi seems to have realized that his “no-limits” partnership with Moscow—an alliance of convenience that he touted with Putin late last year in an effort to weaken the US and divide the West—is a game of higher risk and fewer benefits. than he’d anticipated, given Russia’s dramatic downturns on the battlefield, back home, and in the international community.

For all their conflicting ideals, Biden and Xi are political pragmatists. They recognize their mutual dependencies—China as the source of critical supplies, the US as the buyer of those supplies and many consumer goods—and are now seeing the impracticality of isolation as a tactic, at least in the short term. And so, as their predecessors did with varying degrees of enthusiasm or weariness, they have turned to each other—in this case at a sidebar discussion during the G-20 summit in Bali, Indonesia. (These summits, of the 20 top industrial powers, are generally useless—the group is too large to do much beyond draft boilerplate declarations—except as forums where a handful of leaders can talk seriously on the side.)

According to the Chinese Foreign Ministry’s written summary of the meeting, Xi told Biden that “the current state of China-US relations is not in the fundamental interests of the two countries,” which have a “responsibility” to “explore the right way to get along with each other” and put the relationship on a “track of health and stable growth.” Xi further advocated resolving disputes through “dialogue and win-win cooperation, not confrontation and zero-sum competition.”

The White House readout noted that Biden and Xi “underscored their opposition to the use or threat of use of nuclear weapons in Ukraine”—a hard-nosed hint that China’s partnership with Russia has limits after all. In a press conference after the meeting, Biden told reporters, “I absolutely believe there need not be a new cold war” with China, and Xi agreed—another nose-thumb at Putin, who’d hoped his outreach to the east would undergird his struggle with the West.

The two leaders also agreed to establish (in some cases, reestablish) long-dormant working groups on specific issues—such as climate change, debt relief, and global food security—and to empower the senior officials running these groups to maintain communications.

As if on cue, US climate envoy John Kerry met for 45 minutes on Tuesday with his Chinese counterpart, Xie Zhenhua, at the UN climate summit in Egypt. Among other things, they agreed to resume bilateral climate talks, which Beijing had suspended this past summer after House Speaker Nancy Pelosi’s contentious trip to Taiwan. It was also announced that Secretary of State Antony Blinken will travel to Beijing for the first time sometime next year.

Still, Biden said at his press conference, “I’m not suggesting this is ‘Kumbaya.’ Washington and Beijing are not “going to go away with everything in agreement,” and at the moment they disagree on quite a lot.

These disagreements were also frankly discussed at the three-hour meeting. For instance, Xi stressed that “the Taiwan question is at the very core of China’s core interests, the bedrock of the political foundation of China-US relations, and the first red line that must not be crossed.” Biden reportedly replied that he recognizes “one China” and does not support Taiwanese “independence;” but he has previously and publicly said, four times, that the US would help defend Taiwan against aggression from Beijing, thus making Washington’s long-term stance of “strategic ambiguity” more confusing than clarifying.

The Chinese statement also contained a fair amount of what Biden, in more homespun contexts, might call “malarkey.” For instance: Chinese foreign and domestic policies are “open and transparent … promoting the building of an open global economy.” And: “freedom, democracy and human rights are the common pursuit of humanity and also the unwavering pursuit of the CCP [Chinese Communist Party].” In fact, as Biden and many others have pointed out all too insistently for Xi’s taste, China pursues closed-door trade, routinely steals intellectual property, suppresses local democratic movements, and violates the human rights of millions of its citizens.

The statement also recited several vaguely truculent euphemisms. For instance: “China has Chinese-style democracy,” and “the specific differences between the two sides can be worked out through discussion, but only on the precondition of equality.” This essentially means “stop bugging us about human rights.”

And: “We oppose politicizing the weaponizing of economic and trade ties”—meaning, “Don’t try to disconnect yourself from our supply chains.” On Ukraine: “China has all along stood on the side of peace and will continue to encourage peace talks.” This means: “We’re not exactly helping the Russians in this war, but we’re not siding with you against them either.” And in response to Biden’s request for help in pressuring North Korea to stop its nuclear weapons program: Umm, the Chinese statement says nothing.

These, of course, are the issues of sharpest contention between the US and China. The Xi-Biden meeting, although cordial and productive, shone no light on a road to compromise, much less resolution.

In a bracing article in the current issue of Foreign Affairs, Kevin Rudd, president of the Asia Society and a former Australian prime minister and foreign minister, argues that Xi is a “true believer” in “a new form of Marxist nationalism” that ” places China on the right side of history and portrays the United States as struggling in the throes of inevitable capitalist decline.” This is why Xi scuttled China’s “pragmatic, nonideological governance” under his predecessors, Deng Xiaoping and Hu Jintao—and his pursuit of “an increasingly assertive foreign policy.” Rudd contends that Xi “will not abandon his ideology” and that the West must respond by re-embracing its own liberal democratic principles.

However, Rudd also notes that Xi’s worldview has an “Achilles’ heel,” the economy, which is stagnating for several reasons. One tenet of his Marxist ideology—an expansion of state-owned enterprises and a crackdown on private enterprise—has already set a slowdown in motion. Then there are several “structural trends: a rapidly aging population, a shrinking workforce, low productivity growth, and high levels of debt.”

Xi has not acknowledged, and may not detect, his own role in this stagnation; he hasn’t ordered any policy reversals. But he must be aware of his country’s economic travails—which is another reason why he sees the need for reengagement with the West, at least for the moment. “Under the current circumstances,” his foreign ministry’s readout of the Xi-Biden meeting declared, “China and the United States share more, not fewer, common interests.”

Both leaders seem genuinely keen to grasp the moment and advance those interests together, if for no other reason than that they can’t advance those interests separately. The moment may not last long, but grasping it—in optimism, but with eyes wide open—is better than the alternative. Biden and Xi both seem to appreciate that.

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