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US Commerce Secretary Heads to China Amid Trade Disputes

WASHINGTON — U.S. Commerce Secretary Gina Raimondo will start a four-day visit to China this weekend. The announcement came shortly after the Biden administration issued an executive order restricting certain U.S. investments in China.

The Department of Commerce said on Tuesday that Raimondo will visit Beijing and Shanghai from August 27 to 30 and meet with senior Chinese government officials and American business leaders.

The trip is intended to deepen communication between the U.S. and China on issues relating to the U.S.-China commercial relationship, challenges faced by U.S. businesses, and areas for potential cooperation, according to a press release from the Commerce Department.

Analysts said that as China’s economy may be in long-term trouble, Beijing hopes to use Raimondo’s visit to reverse the impression that China is no longer friendly to foreign companies. But the trip may not bring any breakthrough.

Gary Clyde Hufbauer, a senior fellow at the Peterson Institute for International Economics, told VOA that Beijing welcomes Raimondo’s visit because of her influence on several economic and trade issues that China cares about.

“Secretary Raimondo is a pretty big player in all transactions involving either trade in goods or services, electronic services of various kinds, technology flows and investment flows in both directions,” Hufbauer said.

“My guess is that the Chinese authorities will be interested and quiz her quite closely about what limits she sees on these restrictions that are being put in place, what kind of flows of goods, of technology, of investment are still permitted by the U.S., and what are basically either prohibited or very closely scrutinized.”

Move seen as goodwill gesture

Earlier this month, U.S. President Joe Biden signed an executive order banning U.S. investments in sensitive technologies in China, aiming to restrict China’s ability to develop next-generation military and surveillance technologies.

However, right after Raimondo’s trip was announced, the U.S. government unexpectedly removed 27 Chinese companies and institutions from the “Unverified List” of sanctioned commercial entities, which was widely seen as a goodwill gesture from Washington to Beijing.

The 27 Chinese entities include lithium battery material maker Guangdong Guanghua Technology and sensor maker Nanjing Gaohua Technology.

China’s Ministry of Commerce said on Tuesday that the move is beneficial to the resumption of normal trade between companies of the two countries and is in line with the common interests of both sides.

Secretary of State Antony Blinken, Treasury Secretary Janet Yellen, and Special Presidential Envoy for Climate John Kerry also visited China this year. These meetings could pave the way for Chinese President Xi Jinping to attend the APEC summit in the U.S. and meet with Biden this fall.

‘Intense competition requires intense diplomacy’

National Security Adviser Jake Sullivan said Raimondo’s trip is “an encapsulation of the approach that the Biden administration is taking, where we are engaged in an intense competition with the PRC, but intense competition requires intense diplomacy to manage that competition so that it doesn’t tip over into conflict.

“Secretary Raimondo will carry with her the message that the United States is not seeking to decouple from China, but rather to de-risk, and that means protecting our national security and ensuring resilient supply chains alongside our allies and partners while we continue our economic relationship and our trade relationship,” Sullivan said in a press briefing this week.

Raimondo is expected to meet Chinese Commerce Minister Wang Wentao, among other economic policymakers.

Clark Packard, a research fellow at the Cato Institute, told VOA he expects Raimondo to bring up U.S. concerns about recent Chinese restrictions on the export of some critical minerals, seen as retaliation for the American measures.

“I don’t know if that falls on deaf ears because China would argue, ‘We weren’t going to move forward with this, but this is in response to your export controls on semiconductors and advanced computing,'” said Packard. “I don’t know how well that will be received, but again, I think it’s positive that the two sides talk. My hope is it’s not just an airing of the grievances on both sides because, while I think it’s important to engage, you do want to see some movements.”

Packard said he doesn’t expect Raimondo’s trip to make any substantive breakthroughs on key issues, partly because the Biden administration is “getting a lot of pressure from Congress to continue to ratchet up tensions.”

“I think that there’s so much political pressure on the Biden administration to not appear weak on China, which is going to prevent any sort of massive thawing in the relationship even if both sides want that to happen economically,” he said.

Sullivan said, “We are not sending Cabinet officials to China to change China, nor do we expect these conversations to change the United States; rather, we each have the opportunity through this high-level engagement to ensure that there is a basic, stable foundation in the relationship, even as we compete intensively in a number of domains.”

Likely start of a working group

According to Bloomberg, citing people familiar with the planning, one likely deliverable from the trip is a working group between the commerce agencies of the two sides to discuss U.S. export controls aimed at preventing cutting-edge American technology from being used by China’s military.

In a letter to Raimondo and Blinken last week, four U.S. Republican lawmakers said, “U.S. export control policy towards the [People’s Republic of China] should not be up for negotiation, period. Decisions on the nature and scope of U.S. export controls should be taken in Washington, not Beijing …

“It is time for U.S. officials to accept that China has no intention of abandoning its policies that led to expanded U.S. export controls in the first place,” said the letter. “In this vein, we urge you, prior to your trip, to publicly clarify that U.S. export controls are non-negotiable and that the PRC should expect more, not less, U.S. export controls moving forward.”

The letter was signed by Senator Bill Hagerty and Representatives Mike Gallagher, Michael McCaul and Young Kim.

The trip also comes as the Chinese economy is grappling with stagnant growth, a real estate crisis, sluggish exports, high youth unemployment, and weak consumer confidence. Analysts believe the downturn in China’s economy gives Beijing more reasons to ease tensions with the U.S.

“With Secretary Raimondo, one thing they might do is try to lay out how friendly China still is to foreign business, to foreign firms that want to invest in China in a lot of sectors, including household products, but also including things like technology products, Qualcomm, whatever Apple products in China and so on,” said Hufbauer.

“Chinese authorities want to try to combat the notion that they are very unfriendly to business and, in general, private business and foreign firms in particular,” he said. “And that would be a subject they would discuss with Raimondo, and they might come out with some kind of statement saying that China is open to business, and once firms have come, it’s going to reduce regulatory oversight.”

Source: VOA