Biden’s Commerce Secretary Raimondo Says Trade Can Stabilize US-China Ties

US Commerce Secretary Gina Raimondo said in Beijing that trade and transparency can serve as the foundation for better ties between the world’s top two economies.

(Bloomberg) — US Commerce Secretary Gina Raimondo said in Beijing that trade and transparency can serve as the foundation for better ties between the world’s top two economies.

As one of the key architects of US economic tools to restrain Beijing, including efforts to deny it access to advanced technologies, Raimondo’s trip to China this week is a key test of the Biden administration’s effort to ease tensions while holding firm on what it considers national security interests.

“The plan and the hope is that the commercial relationship, done right, can stabilize the political relationship,” she said Monday at an event showcasing American health and beauty businesses.

She added that that the majority of US-China trade has nothing to do with national security, and that it’s possible to promote and protect US exports and security at the same time.

Her comments come shortly before the US announced it was setting up a commercial-issues working group with officials and businesses from both countries — “to seek solutions on trade and investment issues and to advance U.S. commercial interests in China” — as well as a mechanism to exchange information on US export controls. The group discussing export controls will have its first meeting Tuesday in Beijing. 

Raimondo’s message amplifies a shift in tone within the Biden administration toward emphasizing the narrow scope of export controls and investment restrictions that the Chinese government has decried as a new containment strategy.

‘Strategic Asset’

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 also said she agreed to speak regularly and meet at least once a year with the minister. 

“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

Raimondo and Wang met for more than four hours on Monday, she 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,” the commerce department said in the announcement. 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.” 

China’s Commerce Ministry said in a separate statement that Wang had “rational, candid and constructive” communications with Raimondo, and that both agreed to meet at least once a year, in addition to the vice-ministerial meetings within the newly established working group.

The ministry said Wang also raised concerns with Raimondo over US tariffs, semiconductor policies, two-way investment restrictions, and sanctions on Chinese companies, among other issues.

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. 

US Visits

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, Nasreen Seria and Jacob Gu.

(Updates with details on working group, export control information meeting in fifth paragraph.)

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