Hong Kong
CNN
—
US Commerce Secretary Gina Raimond will visit China next week, which coincides with a worsening slowdown in the world’s second-largest economy.
The China issue may give Raimond much leverage in his pursuit of better market access for U.S. companies, but he will help stabilize a faltering economy by easing some of the pressure the U.S. government has recently applied. It is likely that it will also face requests from the Chinese government to do so.
Craig Singleton, senior fellow at the Foundation for Defense of Democracy, said: “Regarding Mr. Raimond’s visit, the Chinese government’s main objective, even if temporarily, is to avoid U.S. export restrictions and other restrictions imposed on the Chinese economy. It will ensure respite from the onslaught of restrictions.” A bipartisan think tank based in Washington.
The Commerce Department said Raimondo will visit Beijing and Shanghai from Sunday to Wednesday to discuss U.S.-China trade relations, challenges facing U.S. businesses and potential areas of cooperation.
China’s growth forecasts for this year have been revised down after weak exports and foreign investment, a deepening property crisis and widespread concerns over fiscal health. For the Chinese government, Mr. Raimondo plays a key role in many of the areas responsible for increasing friction between the world’s two largest economies.
Her department helps shape US global trade policy, which has stalled US-China relations since the Trump administration increased tariffs on various Chinese goods.
The Secretary is responsible for supporting American companies abroad, and to manage A series of U.S. export controls designed to shield China from advanced technologies that could be used for military purposes.
Whether the Biden administration intends to ease its stance on China remains to be seen, but the announcement, which came out alongside the news of Mr. Raimondo’s visit, suggests the US government is at least trying to create the conditions for a meaningful dialogue. suggests that
The Department of Commerce announced on Monday. that it was removing 27 Chinese companies From US Export Regulations. China’s Ministry of Commerce welcomed the decision, saying it was trade-friendly and reflected the interests of both sides.
“[This] It could have been lubricating oil for Raimond’s trip,” analysts at Eurasia Group said in a note this week. “This also suggests that the Biden administration is making modest but tangible progress in re-establishing limited intergovernmental communication and cooperation with the Chinese government.”
The United States will also benefit from the stability of China’s economy.
China remains the largest source of imports to the United States, with goods trade between the two countries hitting a record $690.6 billion last year.US imports from China $536.8 billion total, accounting for about 17% of total imports. Exports to China amounted to $154 billion, accounting for 7.5% of total US exports to the world.
American companies have huge manufacturing networks in China and rely on Chinese consumers.
Tesla opened a factory in Shanghai in 2018 and now makes half of its electric cars in China. Apple still makes many iPhones there. Other consumer brands such as Starbucks and Nike also have large customer bases in China. Intel, Microsoft and General Motors derive a significant portion of their revenue from the country.
China is also the second largest foreign creditor to the United States. It held $835.4 billion in Treasuries at the end of June, according to the latest Treasury Department data. This is the second largest after Japan’s official hidden assets of $1.11 trillion.
At present, the main points of friction in the key relationship center around US export controls and the “risk aversion” measures the US has taken against China over the past year.
In October, the U.S. government banned advance purchases by Chinese companies Unlicensed US chips and chip manufacturing equipment. The move hits at the heart of the Chinese government’s high-tech ambitions. The US government persuaded Europe and Japan to take similar measures.
This was followed by President Biden earlier this month signing an executive order restricting U.S. investment in certain technology areas of the Chinese economy, including AI and quantum computing.
China has accused the United States of “politicizing and weaponizing” technology and trade issues.
In addition, there are longstanding trade restrictions that the two countries have imposed on each other.
A trade war broke out between the two countries in 2018, with President Donald Trump imposing additional tariffs on hundreds of billions of dollars worth of Chinese goods. China has imposed retaliatory tariffs on more than $100 billion of US imports.
Most of the tariffs still remain under the Biden administration. These are under review, but it is still unclear whether the review will eliminate the tariffs.
Raimond may also express concern that the Chinese government’s recent crackdown on Western consulting firms has unsettled US companies.
China on Tuesday fined New York-based corporate due diligence firm Mintz Group about $1.5 million for allegedly conducting unauthorized statistical work in the country. The fine came months after authorities closed the company’s Beijing office and detained five local employees.
It’s just part of China’s broad crackdown on consulting firms in the name of national security.
In late April, the Chinese government tightened its anti-espionage laws and expanded the list of activities considered espionage. Around the same time, police interrogated staff at the Shanghai office of consulting giant Bain & Company.
A few weeks later, state media published details of multiple raids by state security forces on the offices of Capvision, an international professional network firm headquartered in Shanghai and New York.
“[Chinese President] Xi Jinping’s move . He added that he did not.
But the current challenge for China’s leaders is to “strike a balance between their willingness to jeopardize relations with the United States and the West, and the CCP’s general reluctance to destabilize in any way.” ‘ said Singleton.
To avoid social unrest, Chinese leaders are likely to adopt phased or sectoral measures to partially relieve economic pressure.
“Such efforts could include adopting a more conciliatory approach to the U.S. government on some issues that China might benefit from,” he said.
Then the ball might enter Washington’s court.
— Kylie Atwood and Jeremy Diamond contributed to the report.
