Gina Raimondo, the commerce secretary, began meeting with Chinese officials on Monday as the latest emissary of the Biden administration seeking to strengthen ties between the world’s two largest economies. In working towards that goal, he has a lot to cover.
In meetings with government officials and business leaders in Beijing and Shanghai this week, Ms. Raimondo addresses a range of challenging issues in US-China relations, from clarifying the controls the United States is issuing on China’s access to advanced chips and other technology, to promoting ties in areas which is less sensitive.
It is likely that Ms. Raimondo is creating groups with China to discuss technology and business issues, and will conclude his visit with a trip to Shanghai Disneyland to highlight the potential for more tourism between the countries, according to the person familiar with the plans.
In a meeting with China’s commerce minister in Beijing on Monday morning, Ms. Raimondo that it is “very important” for the two countries to manage their differences.
“It is a challenging relationship, of course we will not agree on some issues, but I believe we can make progress if we are direct, open and practical,” said Ms. Raimondo.
The meetings come at a critical moment, when relations between the countries are strained and China’s economy appears to be slowing. Here’s a look at the issues expected to dominate the trip.
US-China tech war
A major topic for both sides is the increasing trade restrictions on advanced technology between countries, especially those imposed by the United States. Administered by the department of Ms. Raimondo criticized the export controls the Biden administration placed on China’s access to advanced chips in October, angering Chinese officials and prompting retaliation.
Chinese officials are also angered by the Biden administration’s proposal earlier this month to bar private equity and venture capital firms from making investments in China in quantum computing and advanced semiconductors, as well as a new bipartisan law aimed at boost the US semiconductor industry, which hinders. companies receiving federal money from making new, high-tech investments in China.
China has imposed its own broader limits since 2016 on most overseas investments by Chinese companies and households. Chinese officials recently scuttled a planned merger between Intel and an Israeli chip-maker, and banned some sales by US chip-maker Micron, which Micron estimated could cost the company. approximately one eighth of its global revenue. The moves against Micron and Intel were seen by some China experts as retaliation for the Biden administration’s tougher treatment of China’s technology sector.
In an effort to prevent a destructive tit-for-tat economy, Ms. Raimondo is expected to argue that US trade restrictions are aimed at protecting domestic security, not stifling China’s economy.
The two sides are also expected to announce the creation of a new working group during the visit to exchange more information on controls. Some Republicans have pushed back at the idea of such a group, arguing in a letter to Ms. Raimondo that it would give China the means to influence the measures.
In a press briefing before the trip, Ms. Raimondo that the implementation of these policies “is not up for debate.” But talking to the Chinese government about the rules could help avoid misunderstandings and unnecessary escalation, he said.
A deteriorating business environment for foreign companies
Ms. Raimondo is expected to field complaints from Western companies about the increasing difficulty of doing business in China. That likely includes raising concerns about China’s treatment of Micron, and passing complaints from other Western executives who say they are increasingly concerned about China’s sweeping national security laws.
In March, Chinese authorities detained five Chinese nationals working in Beijing for the Mintz Group, an American consulting company, and in April, authorities questioned employees at the Shanghai office of Bain & Company, the US management consulting firm. firm. The Chinese government imposed a $1.5 million fine last month to Mintz for doing unapproved statistical work.
International executives now regularly express concerns about conducting routine business activities in China, such as conducting due diligence on target acquisitions or transferring data between subsidiaries. American multinationals have begun preparing contingency plans in case their employees are detained in China, and have returned some of the expatriates who fled the country during the pandemic.
“People are afraid to go to China,” said Susan Shirk, a research professor at the 21st Century China Center at the University of California, San Diego, and the author of “Overreach: How China Derailed Its Peaceful Rise.”
“Concern about physical security really puts a damper on interactions at the commercial as well as academic level,” he added.
Promoting commercial relations with other areas
Despite the colder environment, Ms. insisted. Raimondo and other officials said there is still a lot of potential for trade between the world’s two largest economies. China remains America’s third-largest export market, buying more than $150 billion of products from US farms and businesses.
Speaking before the trip, Ms. Raimondo said US export controls affect only 1 percent of bilateral trade between the countries. Exports to China support more than 80,000 jobs in the United States, and benefit small and large companies, he said. The United States also continues to import hundreds of billions of dollars of goods from China each year.
Ms. will likely repeat. That’s Raimondo’s message as he meets with business leaders in Beijing and Shanghai. His visit will include meetings with American suppliers of personal care products that export to China, and a trip to Shanghai Disneyland, where he is likely to announce a recent US move to bring back travel of the group from China to the United States.
“Like you, I am a former governor, I am a practical leader,” he told China’s commerce minister at his meeting on Monday. “I’m here in the spirit of being practical and finding concrete ways to work with you.”
Government communication
A more basic, but still important, part of the trip was promoting communication between the United States and China. Those channels were largely lost following the downing of a Chinese surveillance balloon that flew over the United States earlier this year.
Speaking before the trip, Ms. Raimondo said he spoke with President Biden on Thursday, and he asked him to bring a message to China’s leaders that “we need to talk to avoid conflict.”
It will be the first trip to China by a US commerce secretary in seven years.
He is expected to meet with some members of a new economic team that has been in office since the Communist Party held its once-in-five-years national congress last fall.
Economic slowdown and transparency
Overhanging the visit are concerns about China’s recent economic slowdown, and how it will influence the global economy and bilateral relations in the future.
Economists and observers expressed concern over a decision by the Chinese Bureau of National Statistics this month to stop publishing monthly unemployment information “for youth and other age groups,” which recently reached highest record.
The agency said it needed to optimize its surveys. But the decision, along with the suspension of tens of thousands of other data series in recent years, has led to suggestions that China is trying to hide negative economic data.
Jake Sullivan, the White House’s national security adviser, said Ms. Raimondo the economic data of China during his trip.
“We think that for global confidence, predictability and the capacity of the rest of the world to make sound economic decisions, it is important for China to also maintain a level of transparency in its data publication,” he said.
