One of the key architects of US measures to deny China advanced technology came to Beijing with an optimistic message: Trade can serve as the foundation for better ties between the world’s biggest economies.
US Commerce Secretary Gina Raimondo said Monday that the majority of US-China trade has nothing to do with national security, and that it’s possible to promote and protect exports at the same time.
“The plan and the hope is that our commercial relationship, if done right, can stabilize the political relationship,” she said at an event showcasing American health and beauty businesses. “And this is one small example of that.”
Raimondo’s message is more evidence of a shift in tone within the Biden administration, which has recently tried to emphasize the narrow scope of export controls and investment restrictions that the Chinese government has decried as a new containment strategy.
It’s been almost a year since National Security Advisor Jake Sullivan called export controls “a new strategic asset” and said it was important to maintain “as large of a lead as possible” in foundational technologies like advanced logic and memory chips.
On Monday, however, Raimondo told her Chinese counterpart Wang Wentao that the US had no intention to hinder China’s economic progress. She and Wang also established US-China working groups on commercial issues and export controls.
These are formalized dialogues intended to go beyond more nebulous commitments to further conversation that resulted from earlier visits to China by Biden cabinet members. Raimondo also agreed to speak regularly and meet at least once a year with Commerce Minister Wang.
“It is profoundly important that we have a stable economic relationship, which is to the benefit of both of our countries and in fact what the world expects of us,” Raimondo said. “It’s a complicated relationship, it’s a challenging relationship. We will of course disagree on certain issues, but I believe that we can make progress if we are direct, open and practical.”
While saying that the US won’t bend on national security concerns, Raimondo said that much of the trade between the two countries shouldn’t be affected and there are many areas for cooperation. At the same meeting, Wang said China was ready to work with the US to boost trade and “foster a more favorable policy environment” for US and Chinese businesses.
‘Desperate’ CEOs
The two met for more than four hours on Monday, Raimondo told a gathering of US industry representatives at an event that evening in Beijing. Before the trip, she said, she met with almost 150 US business leaders who gave her an overwhelming message that “we need more channels of communication — a few CEOs said to me that they were desperate for more communication.”
The new commercial issues working group, she said, is a direct response to concerns raised by American industry. It will have official and private sector representatives from both China and the US, with the US hosting the first meeting in early 2024, according to the Commerce Department.
On export controls, the two sides established an “information exchange” to “reduce misunderstanding of US national security policies,” with a first meeting set for Tuesday in Beijing. Before her trip, Raimondo had been criticized by Republicans in Congress for even considering letting the Chinese weigh in on the US export control regime. She has said repeatedly that the US goal is to explain its actions.
“The United States is committed to being transparent about our export enforcement control strategy,” she said. “I want to be clear. We are not compromising or negotiating in matters of national security — period.”
Raimondo arrived in Beijing on Sunday, becoming the fourth high-profile US official to visit the world’s second-largest economy in the past three months. Her visit is seen as one that may have a better chance of improving ties because the Commerce Department’s mandate is to promote US trade abroad as well as to combat practices the US considers unfair or dangerous to national security.
Despite the multiple visits from major US officials to China this year, no high-level Chinese officials have visited the US. “That gives Secretary Raimondo a lot of pressure in terms of what she can achieve during her trip,” said Zongyuan Zoe Liu, a fellow for China studies at the Council on Foreign Relations, in an interview on Bloomberg Television.
“The incentives and priorities on both sides are different,” Liu said. “China probably is very much interested in further relaxing of export controls and letting tariffs expire, but none of those things can be decided by Secretary Raimondo.”
For all the strife in relations, China remains among the US’s biggest trade partners. Trade in goods between the US and China climbed to a record $690.6 billion in 2022. US imports from China have dropped this year, though, as it purchases more from Mexico and Canada.
Raimondo’s visit may also help Boeing Co. resume shipping its 737 Max jets to China for the first time since 2019. The jetliner is the planemaker’s main source of cash as it rebuilds finances devastated by Covid and a global grounding of its Max plane. Rival Airbus SE has built a commanding lead in China, and around the globe, while Boeing’s workhorse jet has been shut out of its largest overseas market.
--With assistance from Lucille Liu, Dan Murtaugh and Nasreen Seria.
