US Commerce Secretary to visit China to strengthen trade ties

Amerikaanse minister van Handel op weg naar China om zakelijke banden aan te halen

US Commerce Secretary Gina Raimondo is on a four-day visit to China starting Sunday, aimed at strengthening trade ties between the world’s two largest economies. Raimondo has repeatedly said that the United States does not want to “disconnect” from China, but he has actively put Chinese companies on export control lists.

“There are many benefits to doing business (with China) whenever possible. That is, we need to protect what we need to protect and keep our eyes wide open for threats and strategic competition,” Raimondo said in July.

Tensions are high as the U.S. joins allies in blocking China’s access to key equipment needed to keep China’s chip industry competitive. Ahead of Raimondo’s arrival in Beijing on Sunday, several recent U.S. announcements may have cheered Chinese officials. On Tuesday, China welcomed the US decision to lift export restrictions on 27 Chinese companies, saying it was conducive to normal trade between Chinese and US companies. On Wednesday, the United States said it wanted a six-month extension to a decades-old science and technology agreement with China, which Chinese officials are eager to extend. The world’s two largest economies used to be each other’s largest trading partners, but Washington now trades more with neighbors Canada and Mexico, while Beijing trades more with Southeast Asia.

The visit comes after months of intense diplomacy by top aides to US President Joe Biden to ease tensions between Washington and Beijing.

By the time Biden and his Chinese counterpart Xi Jinping meet face-to-face before the end of the year, officials hope to see concrete signs of progress in the relationship, in potential areas ranging from trade to climate. The semiconductor chip industry is eager to protect its profits in China as the Biden administration considers a new round of restrictions on chip exports to China. Last year, according to the Semiconductor Industry Association, China accounted for $180 billion in semiconductor purchases, a third of the global total of $555.9 billion and the largest single market.

Raimondo said in May that the United States “will not tolerate” an effective ban on China’s purchases of Micron memory chips and is working closely with allies to address such “economic coercion.”

In July, Raimondo said the Biden administration wanted to carefully handle U.S. restrictions on exports to China, but said the rules would cost companies revenue.

“You’re denying U.S. companies revenue, China can get the product elsewhere, or China can get the product from other countries,” Raimondo said. The rules “will deny some revenue to American companies, but we think it’s worth it.” A big open question is when China will resume deliveries of Boeing 737 Max passenger jets. Raimondo, who has spoken to Boeing executives on several occasions, said that by 2021, the Chinese government is barring its domestic airlines from buying U.S.-made Boeing planes.

“Chinese airlines want to buy planes worth tens of thousands of dollars, but the Chinese government is standing in the way,” he said.

Raimondo’s visit could be the last face-to-face interaction between top US officials and their Chinese counterparts, ahead of Vice President Kamala Harris’ Sept. 4-7 trip to Southeast Asian nations’ ASEAN meetings and Biden’s Sept. 7-10 trip to India. The Group of 20 meetings and the annual meeting of world leaders at the UN later in September.

On the sidelines of these meetings, Biden and Harris are expected to spend time with neighbors concerned about China’s assertiveness in the Indo-Pacific region and its declining economy.

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