Gina Raimondo praises the frankness of the negotiations but warns that China can no longer invest
Despite all the smiles from the public on both sides – including a surprisingly long meeting with the Chinese premier – one word loomed over Raimondo’s four-day trip: “non-investable.”
Speaking to reporters after her second day of meetings, Raimondo said on Tuesday evening that US companies were complaining to her that China had created an ever more difficult environment for them.
“Increasingly, American companies are telling me that China can’t invest because it’s become too risky,” she said. “Companies are therefore looking for other opportunities; they are looking for other countries; they are looking for other places to go.
Three years of Covid-related lockdowns have strained supply chains. Then came an unpredictable mix of raids on American companies and opaque sanctions – including the increasing use of exit bans against foreign business executives. Overall, this has made foreign — and not just American — companies wary of continuing their operations in China.
China is in dire need of foreign investment as its economy struggles to rebound from years of pandemic restrictions, amid a growing housing debt crisis, record youth unemployment and slowing consumer spending.
“China needs to recognize that it can no longer rely on the mass of its market to attract this kind of foreign investment,” said Naomi Wilson, vice president of policy for Asia and global trade at the China Council. information technology industry. “Even among Chinese companies, there have been efforts to relocate out of China. »
The Biden administration’s hawkish approach, a continuation of the Trump era, has allowed Beijing and Washington to continue their growing rivalries over supply chains of technologies both sides claim are critical to national security.
Last year, the Biden administration tightened controls on exports of U.S. semiconductor chips to China, particularly advanced chips needed to power artificial intelligence systems. And just two weeks before Raimondo’s departure for China, the White House issued an executive order prohibiting US companies from investing in Chinese technologies that may have military or surveillance applications.
As if to emphasize that US export controls couldn’t hold back Chinese companies, Huawei Technologies has launched a new 5G phone that experts say relies entirely on chips made in China.
“American companies want to do business here, but they need a predictable regulatory environment,” Raimondo said Wednesday in the Boeing hangar at Shanghai Pudong Airport.
She has previously criticized China’s Aviation Authority for blocking Chinese airlines from finalizing purchases of Boeing’s 737 Max after two fatal crashes in 2019 led to its global grounding, which has since been lifted. No progress on the issue resulted from Raimondo’s visit.
Raimondo nevertheless met with US leaders and a number of senior Chinese officials during his trip, including Premier Li Qiang and Vice Premier He Lifeng, in a bid to stabilize relations between the world’s two largest economies. .
The secretary spent more than an hour with the prime minister, who oversees the economy.
She also met dozens of American businessmen at a reception in Beijing and spoke in an economics class on the New York University campus in Shanghai, where she spoke with students from the United States, China, and beyond about export controls, career development, and learning from each other. the differences of others.
Raimondo also took a trip to Shanghai Disneyland – where she was stopped for a hug by a talkative 7-year-old girl dressed as Disney’s clever pink fox LinaBell.
Both sides described the visit as open and convenient, a notable positive in an otherwise strained relationship plagued by disagreements over trade, technology and Taiwan.
Raimondo said she had a lot of “candid dialogue” during the trip. “We have a moment in this relationship now, and we’ll see if there’s action,” she told reporters.
Raimondo and Chinese Commerce Minister Wang Wentao agreed to establish a formal communication channel on trade issues, which Blinken proposed for military issues but Beijing rejected.
The two sides also had the first “exchange of information” meeting on export controls, carefully named to emphasize transparency – but not negotiation – on the increasing measures taken by Beijing and Washington to protect a growing set of technologies they consider important. to national security.
Chinese state media said the visit represented “practical progress”.
Sun Xingjie, a professor at the School of International Relations at Sun Yat-sen University, said in a TV interview: with Shenzhen Direct News that the relationship between the United States and China has entered a new stage and that the establishment of the task force would allow the two sides to separate matters of mutual interest from hostility.
“The deeply intertwined China-US economic and trade relationship is not a zero-sum game,” Sun said.
Pei-Lin Wu from Taipei, Taiwan contributed to this report.
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