Gina Raimondo’s visit to China this week put the commerce secretary on a political tightrope, which she has been told could snap at any moment. She must work hard to ease the strained Sino-US relations, while showing no tolerance on national security issues. But despite her best efforts, she keeps sending one unmistakable message: We just don’t like you that much.
Secretary Raimondo, the fourth senior Biden administration official to visit China this year, reiterated the importance of economic ties in the relationship between the world’s two largest economies.
Raimondo tried to explicitly support the continuation of the relationship.
“I want to be clear that we are not seeking to decouple or hinder China’s economic development,” Raimondo told Vice Premier He Lifeng. She added that she and Chinese Commerce Minister Wang Wentao agreed to “hold informal talks as often as possible” to resume trade interactions.
But there are also several big problems.
First, Raimondo conveyed a message from the business community: China is an increasingly unpopular place to do business.
“I’m hearing more and more from companies saying, ‘China is not a good place to invest because it’s too risky,'” she said. “They’re used to dealing with some traditional issues. And then there’s a whole new set of concerns, the sum of which makes them think Chinese investments are too risky.”
The new policy, combined with China’s faltering economy, has made foreign investors uneasy about investing in the mainland. Over the weekend, the government passed a raft of measures aimed at boosting the economy, only to have foreign investors dump $1.1 billion worth of Chinese stocks. In the past, China has imposed restrictions on securities sales during times of poor market conditions, another in a string of recent policies that could make investors nervous about doing business in the world’s second-largest economy.
Raimondo discussed in more detail in Beijing, emphasizing how difficult it might be to recouple or prevent decoupling.
those pesky export controls
For all Raimondo’s talk of a decoupling, or lack thereof, things have gotten less and less close over the past few months.
In April, the Chinese government passed new anti-espionage law The bill prohibits the transmission of any information related to national security and expands the definition of espionage. The United States accuses China of deliberately making the law vague and fears it could affect Chinese law. hurting american companies.
U.S. officials have also taken a series of steps to address growing concerns about potential threats to national security from China. First, the U.S. has banned the sharing of semiconductor technology with certain Chinese companies over concerns that the technology could be used for military and surveillance purposes. The U.S. said the decision was for national security, not to hurt China economically.
Raimondo made this point emphatically. “The United States is committed to maintaining transparency in our export enforcement control strategy,” she said. explain. “I want to be clear. We will not compromise or negotiate on national security issues — that’s it.”
China retaliated against U.S. export controls by ordering certain Chinese companies to stop using Micron’s memory chips. At the time, Raimondo called the move “economic coercion,” the blunt language she used to denounce China’s alleged habit of using the economy to advance its political goals. During the visit, Raimondo criticized what she saw as China’s arbitrary enforcement of policies against U.S. companies such as Micron. “Our export controls are clear and transparent,” she said. “We didn’t give any reason for what happened to Micron. Due process is limited, which is why I’m raising this issue.”
The U.S. has also imposed restrictions on exports from Nvidia, the world’s leading chipmaker. Driven by the recent boom in artificial intelligence, Nvidia’s business has grown significantly.
More recently, the U.S. has also laid the groundwork to wean itself off its reliance on Chinese manufacturing, boosting another hot industry: electric vehicles.U.S. reportedly eager for EV makers to shift supply chains away from China Reuters.A law banning imports of products made in Xinjiang — where members of the Uyghur minority have reportedly been sent to forced labor camps — now includes electricity car battery.
The moves are all part of an effort by the U.S. government to steer investment away from China. At the same time, the idea that strengthening a mutually beneficial economic relationship would be the first step in easing other tensions between the two countries.
“The plan and the hope is that, if done right, business relationships can stabilize political relationships,” Raimondo said. explain.
China’s No. 2 official, Premier Li Qiang, echoed the sentiment, calling trade between the two countries a “pillar of stability”.
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