U.S. Commerce Secretary Gina Raimondo is one of the Biden administration’s leaders in rebuilding the government’s fragile relationship with China, and just recently return She visited the country in September and met with senior officials.
Speech at wealthAt a CEO Initiative meeting on Tuesday, Raimondo praised the administration’s progress while pledging not to abandon any areas of national security.
“It’s baby steps, I realize that,” she told me wealth Editor-in-chief Alison Shortell. “Hopefully small steps will lead to greater progress.”
Transfer of interest
Raimondo has taken a cautious stance in his Commerce Department role as relations between the U.S. and China cool during the coronavirus pandemic. Raimondo last May described China’s decision to ban a U.S. company from making chips as “economic coercion” as tensions between Taiwan and the key semiconductor industry grew. During a visit to the country in late August, she said China’s authoritarian measures could lead U.S. businesses to view the country as “too risky” and “impossible to invest in.”
Despite her cautious stance, Raimondo expressed optimism about her visit, which will include the establishment of a working group on business issues to identify specific issues on which the two countries can work together.
Raimondo said Tuesday that the group has begun working-level meetings and she will meet with her Chinese counterparts in San Francisco in November. The two countries have also established a technical group around trade secrets and have begun meetings.
“It’s in our interest to try,” she told Shortell. “It’s in our interest not to let the situation escalate.”
Raimondo took the stage an hour after Treasury Secretary Janet Yellen warned that the United States should “eliminate risks” with China in key areas of national security but not “decouple.”
Raimondo expressed a similar attitude when she visited China in late August, insisting, “We are not seeking to decouple or hinder China’s economic development.” She also said on Tuesday that the Biden administration hopes to encourage the two countries to work together on national security Investing outside of critical areas, including quantum, semiconductors and artificial intelligence
“They know we are leading the way in these emerging technologies,” she said, arguing that China wants to incorporate the technology into its military. “It would be a little crazy if we allowed that,” she added.
Raimondo reiterated President Biden’s stance on China, which she described as a “little garden with high walls.”
Asked whether the United States can ensure that private investments by Chinese limited partners in domestic companies do not create risks, Raimondo said the government has safeguards in place, including the Treasury Department’s Committee on Foreign Investment in the United States (CFIUS). She noted that China has been screening investments for years, while the United States is still playing catch-up.
“We’re new to this because we think it’s necessary,” she said.
“Hiccups every day”
Raimondo drew laughter from the crowd as she listed the scope of her responsibilities, which range from semiconductors to chips to artificial intelligence, noting that she has a broad “portfolio.”
Raimondo said the Commerce Department has hired 150 people since Biden signed the Chip and Science Act, sweeping legislation aimed at spurring the nation’s emerging semiconductor industry, with a large number of them from private industry. Her department also received more than 500 letters of interest from semiconductor manufacturing companies and more than 100 applications.
While domestic mass production of semiconductors may still be years away, Raimondo promised that the Commerce Department would make an announcement by December. She also noted that $170 billion has been invested in the U.S. semiconductor industry since the bill was passed—a trend she said was made possible by the bill.
Despite the progress, Raimondo said the main hurdles have to do with labor, including finding the thousands of construction workers needed to build semiconductor facilities.
Experts believe the U.S. still faces a steep uphill road to building the industry Quote Challenges include funding shortages and the availability of natural resources.
“We hiccup every day,” Raimondo said.
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