Top US and Chinese Commerce Officials Express Support for Easier Trade, but Deep Differences Remain

AP

15:43 JST, August 28, 2023

BEIJING (AP) — Commerce Secretary Gina Raimondo and her Chinese counterpart expressed a desire to improve trade conditions on Monday, as Raimondo began a visit to Beijing aimed at warming chilly relations, but neither side appeared willing to make concessions on the other’s main demands.

Raimondo joined American officials including Treasury Secretary Janet Yellen in July who have visited China in the past three months. They expressed optimism about improving communication but have announced no progress on technology, security, human rights and other disputes that have plunged relations to their lowest level in decades.

For its part, Chinese leader Xi Jinping’s government wants to revive foreign investor interest in China as it tries to reverse a deepening economic slump.

Beijing is ready to work together to “foster a more favorable policy environment for stronger cooperation” and “bolster bilateral trade and investment,” Commerce Minister Wang Wentao told Raimondo. Wang gave no details of possible initiatives.

Raimondo said the two sides are working on establishing “new information exchanges” for “more consistent engagement.”

“It is profoundly important that we have a stable economic relationship,” she said. “I believe that we can make progress if we are direct, open and practical.”

Beijing broke off dialogue with Washington on military, climate and other issues in August 2022 in retaliation for a visit to Taiwan by then-Speaker Nancy Pelosi of the House of Representatives. The mainland’s ruling Communist Party claims the self-ruled island democracy as part of its territory and objects to foreign governments having contact with it.

The state press has given positive coverage to the American visits to Beijing, but China has given no indication it might change trade, strategic, market access and other policies that irk Washington and its Asian neighbors.

Raimondo told reporters before leaving Washington she was looking for “actionable, concrete steps” to move forward in commercial relations but gave no details. She said she was realistic that the ”challenges are significant.”

The visits take place under an agreement made by Xi and President Joe Biden during a meeting last November in Indonesia.

In June, Secretary of State Antony Blinken met with Xi for 30 minutes during a visit that was postponed from February after a Chinese surveillance balloon entered U.S. airspace. The Chinese leader called on Washington to change policies on Taiwan and other issues and rebuffed a request to resume military-to-military cooperation.

Last week, on the day Raimondo’s visit to Beijing was announced, Washington removed 27 Chinese companies from a blacklist that limits access to U.S. technology.

The decision ”may have helped grease the wheels for Raimondo’s trip,” said Anna Ashton and Kylie Milliken of Eurasia Group in a report.

It suggests Washington “is making modest but measurable progress with Beijing in re-establishing limited government-to-government communication,” Ashton and Milliken wrote. ”Raimondo’s visit could produce additional progress.”

A key Chinese complaint is limits on access to processor chips and other U.S. technology that threaten to hamper the Communist Party’s ambition to develop artificial intelligence and other industries, which the U.S. has imposed on security grounds. The restrictions crippled the smartphone business of Huawei Technologies Ltd., China’s first global tech brand. Washington also has persuaded the Netherlands and Japan to join it in blocking Chinese access to tools for manufacturing advanced chips.

“In matters of national security, there is no room to compromise,” but most U.S.-Chinese trade “does not involve national security concerns,” Raimondo told Wang. “I’m committed to promoting trade and investment in those areas that are in our mutual best interest.”

Raimondo defended the Biden administration’s “de-risking” strategy of trying to increase domestic U.S. production of semiconductors and other high-tech goods and to create additional sources of supply to reduce chances of disruption. Beijing has criticized that as an attempt to isolate China and hamper its development.

“It is not intended to hinder China’s economic progress. We believe a strong Chinese economy is a good thing,” Raimondo told Wang. “We seek healthy competition with China. A growing Chinese economy that plays by the rules is in both of our interests.”

Wang visited Washington in May. The U.S. government invited Foreign Minister Wang Yi to Washington, but plans for that have not been announced.

Raimondo also was due to meet China’s No. 2 leader, Premier Li Qiang, and other officials.

The Biden administration also has taken steps that are likely to rankle Beijing.

In June, Biden added 59 Chinese companies including military contractors and semiconductor manufacturers to a list of entities Americans are prohibited from investing in.

Last week, Washington approved a $500 million arms sale to Taiwan including infrared tracking systems for advanced F-16 fighter jets.