25-8-2023 (WASHINGTON) U.S. Commerce Secretary Gina Raimondo is set to visit China for four days, starting Sunday, with the aim of boosting business relations between the world’s two largest economies. This visit comes amidst the Biden administration’s efforts to prevent the export of sensitive American technology.
Raimondo has repeatedly emphasized that the United States does not intend to sever ties with China. However, she has taken aggressive measures by placing Chinese companies on an export control list.
“In engaging in business with China, we can derive significant benefits. Nonetheless, we must safeguard our interests and remain fully aware of the threats and strategic competition,” Raimondo stated in July.
Tensions are running high as the United States collaborates with its allies to impede China’s access to crucial equipment required to maintain competitiveness in its chip industry. In turn, Beijing has imposed restrictions on shipments from major U.S. firms such as Boeing and Micron Technology.
In the lead-up to Raimondo’s arrival in Beijing, several recent announcements from the United States have likely pleased Chinese officials. On Tuesday, China welcomed the U.S. decision to lift export control restrictions on 27 Chinese entities, stating that it would facilitate normal trade between Chinese and American companies.
Furthermore, on Wednesday, the United States expressed its desire to extend a decades-old science and technology agreement with China, a deal that Chinese officials have also indicated interest in extending.
While the United States and China were once each other’s largest trading partners, Washington now conducts more trade with neighboring Canada and Mexico, while Beijing increases its trade with Southeast Asia.
Raimondo’s visit follows months of intense diplomatic efforts by top aides of U.S. President Joe Biden aimed at easing tensions between the two nations. Officials are hopeful that concrete signs of progress in various areas, including trade and climate, will emerge in time for a potential face-to-face meeting between Biden and Chinese President Xi Jinping before the end of the year.
The semiconductor chip industry is keen on safeguarding its profits in China as the Biden administration contemplates imposing further restrictions on chip exports to the country. Last year, China accounted for $180 billion in semiconductor purchases, representing over a third of the global total of $555.9 billion and making it the largest single market, according to the Semiconductor Industry Association.
In May, Raimondo asserted that the United States “will not tolerate” China’s effective ban on purchasing Micron memory chips and that they are working closely with allies to address such “economic coercion.”
Raimondo also stated in July that the Biden administration aims to carefully target U.S. export controls on China, recognizing that these rules will result in some loss of revenue for firms. However, she stressed the importance of avoiding overly broad restrictions that would deny American companies revenue while allowing China to obtain the products elsewhere or from other countries.
One significant unresolved issue is when China will resume deliveries of Boeing 737 MAX passenger jets. Raimondo, who has held numerous discussions with Boeing executives, stated in 2021 that the Chinese government was preventing domestic airlines from purchasing Boeing aircraft manufactured in the United States.
She remarked, “Chinese airlines are eager to buy tens of billions of dollars’ worth of planes, but the Chinese government is obstructing these transactions.”
Raimondo’s trip may be the last opportunity for high-ranking U.S. officials to engage face-to-face with their Chinese counterparts before Vice President Kamala Harris embarks on her trip to attend the ASEAN meetings of Southeast Asian countries from September 4 to 7. Subsequently, President Biden will travel to India for the Group of 20 meetings from September 7 to 10, followed by the annual gathering of world leaders at the United Nations later in September.
During these meetings, both Biden and Harris are expected to court neighboring countries that are concerned about China’s assertive stance in the Indo-Pacific region and its declining economy.
