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US Commerce Secretary Gina Raimondo is visiting China for four days starting Sunday, aiming to boost trade ties between the world’s two largest economies, even as the Biden administration has taken a series of steps to prevent exports of sensitive US technology.
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Raimondo has repeatedly said that the United States does not want to “disengage” from China, but also noted that it has aggressively placed Chinese companies on an export control list.
“It is very beneficial to do business (with China) where we can. That being said, we have to protect what we owe and be very open to threats and strategic competition,” Raimondo said in July.
Tensions are high as the United States works with allies to block China’s access to vital equipment needed to keep its chip industry competitive and Beijing restricts shipments from major US firms including plane maker Boeing BA.N and chip company Micron Technology MU.O.
Before Raimondo’s arrival in Beijing on Sunday, several recent US announcements were likely to have pleased Chinese officials. On Tuesday, China welcomed the US decision to lift export control restrictions on 27 Chinese entities, saying it favors normal trade between Chinese and US companies.
And on Wednesday, the United States said it is seeking a six-month extension to a decades-old science and technology deal with China, an agreement that Chinese officials have expressed a desire to extend.
The world’s two largest economies used to be each other’s biggest trading partners, but Washington now trades more with neighbors Canada and Mexico, while Beijing trades more with Southeast Asia.
The visit comes after an intense diplomatic campaign over several months by top advisers to US President Joe Biden aimed at easing tensions between Washington and Beijing.
Officials hope to see concrete signs of progress in the relationship, in potential areas ranging from trade to climate, in time for a potential face-to-face meeting between Biden and his Chinese counterpart Xi Jinping before the end of the year.
The semiconductor chip industry is eager to protect its profits in China as the Biden administration considers another round of restrictions on chip exports to China. Last year, China accounted for $180 billion in semiconductor purchases, more than a third of the global total of $555.9 billion and the largest single market, according to the Semiconductor Industry Association.
Raimondo said in May that the United States “will not tolerate” China’s effective ban on purchases of Micron memory chips and is working closely with allies to address that “economic coercion.”
Raimondo said in July that the Biden administration is trying to carefully target US controls on exports to China, but the rules will cost companies some revenue.
The restrictions should not be so broad “that they deny revenue to US companies and China can get the product elsewhere, or China can get the product from other countries,” Raimondo said. The rules “will deny some revenue to US companies, but we think it’s worth it.”
A big open question is when China will resume deliveries of Boeing 737 MAX airliners. Raimondo, who has spoken with Boeing executives on numerous occasions, said in 2021 that the Chinese government was preventing its national airlines from buying American-made Boeing planes.
“There are tens of billions of dollars worth of planes that Chinese airlines want to buy, but the Chinese government is standing in the way,” he said.
Raimondo’s trip may be the last face-to-face interaction between top US officials and their Chinese counterparts before Vice President Kamala Harris’ September 4-7 trip to ASEAN meetings of Southeast Asian countries, Biden from September 7-10 to India for the Group of 20 meetings and the annual meeting of world leaders at the United Nations in late September.
On the sidelines of those meetings, Biden and Harris are expected to spend time courting neighboring countries concerned about China’s assertive stance in the Indo-Pacific and its declining economy.
(Reuters)
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