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Tuesday, June 25, 2024

U.S. and China Expand Discussions in Effort to Alleviate Strain

As part of ongoing efforts this summer to ease tensions between the world’s two biggest economies, the United States and China agreed Monday to continue frequent consultations about commercial concerns and limits on access to sophisticated technology.

The news was made when U.S. Commerce Secretary Gina Raimondo was in Beijing for meetings with high-ranking Chinese officials.

Regular talks are the latest step towards mending strained ties between the two countries, a process that has already been kicked off by the visits of three high-ranking American officials in the past 10 weeks: Secretary of State Antony J. Blinken, Treasury Secretary Janet L. Yellen, and President Obama’s special envoy on climate change, John Kerry.

She added that two different lines of communication will be set up. One such organisation would consist of company owners and executives and would deal only with business concerns. The second option is for governments to share data on how strictly the United States follows its export laws.

The United States and China used to regularly have bilateral talks on trade, technology, and other economic matters, but these talks have waned in recent years. In response for then-House Minority Leader Nancy Pelosi (D-CA)’s trip to Taiwan a year ago, China suspended eight bilateral discussion groups.

Mr. Blinken first cancelled a trip to Beijing after the voyage of a Chinese surveillance balloon across the United States last winter, which ended with the balloon being shot down over the Atlantic Ocean.

However, the two countries’ economies are so intertwined that they have began to warm relations and opened the possibility to renewing diplomatic ties.

According to a statement released by China’s Ministry of Commerce after the meeting, Mr. Wang voiced severe concerns about U.S. tariffs on Chinese imports and the Biden administration’s attempts to strengthen the U.S. semiconductor sector via government subsidies. Mr. Wang has voiced his displeasure with the new U.S. government subsidy programmes that aim to attract Chinese manufacturing to the country, calling them “discriminatory,” and has also voiced his worry about U.S. penalties on Chinese businesses.

According to the summary, he assured the American side that China was ready to collaborate in order to establish a stable policy climate for bilateral commercial ties.

Ms. Raimondo had already been criticised by Republican senators before her trip to China for her plans to form a “working group” of U.S. and Chinese officials to address U.S. export regulations.

Instead of a formal working group, Ms. Raimondo described the new conversation as a “information exchange.” She clarified that the foundation of the committee would not indicate any kind of U.S. concession on national security matters, but rather that more information concerning U.S. export limits on sophisticated technology would be shared. The export enforcement group’s first meeting was planned for this coming Tuesday in Beijing.

American export enforcement personnel will discuss with their Chinese colleagues how restrictions are implemented, but not which items are covered or how the policies are developed, according to a senior Commerce Department official who was not authorised to talk publicly. Because it requires American officials to undertake inspections in China, enforcement has been a thorny problem for the two nations.

According to the official, China froze such inspections for around two years but has permitted over one hundred to continue in the previous eight months. Facilities in China are being inspected to make sure cutting-edge American gear isn’t being stolen and used by the Chinese military or police. The United States Department of Commerce revealed last week that 27 Chinese firms had been approved to re-import cutting-edge technology after undergoing similar inspections.

Ms. Raimondo said that she and the Chinese trade minister will be meeting yearly.

The decision to continue talking shows a shared commitment to realism, according to He Weiwen, a former official in the Chinese Ministry of Commerce who is now a trade expert at the Centre.

Plans for a formal discussion mechanism between the two nations have drawn criticism from some China specialists in the United States, an indication of how politically tense ties with China remain.

Former Trump administration official and current Hoover Institution visiting fellow Matt Turpin called the decision a “real head scratcher.” He said China did not deserve such outreach since it had done nothing to stem the flow of fentanyl into the United States, was in an alliance with Russia, and had hacked Ms. Raimondo’s email account before the trip.

The United States has sent a message to China that it is concerned about the lack of openness in the country’s economic data and the discriminatory conditions encountered by international enterprises. After reaching a record high this summer, China temporarily halted the reporting of young unemployment statistics this month.

Ms. Raimondo said that in preparation for her trip, she had talked with almost one hundred and fifty business executives, all of whom had the same message for her: We need additional lines of communication.

Chinese authorities have started to soften their attitude on several topics as the Chinese economy has weakened this summer. The newest change was revealed by the foreign ministry on Monday; beginning on Wednesday, visitors visiting China would no longer be required to undergo a pre-arrival Covid test.

According to Michael Hart, president of the American Chamber of Commerce in China, Chinese authorities have shown more openness to dialogue as of late.

David Faber
David Faber
I am a Business Journalist of The National Era
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