Title: US and China Aim to Enhance Trade Relations, but Key Demands Remain Unresolved
In a bid to thaw their frosty relationship, US Commerce Secretary Gina Raimondo and her Chinese counterpart recently expressed their mutual desire to improve trade conditions. Raimondo embarked on a visit to Beijing, joining other American officials, including Treasury Secretary Janet Yellen, who have traveled to China in the past few months. Although the meetings were marked by optimism about enhanced communication, no concessions were made on important demands concerning technology, security, human rights, and other contentious issues that have strained relations between the two countries for decades.
During the discussions, Chinese Commerce Minister Wang Wentao stated that Beijing is prepared to collaborate in order to establish a more favorable policy environment that fosters stronger cooperation while bolstering bilateral trade and investment. However, Wang did not provide specific details about potential initiatives.
Raimondo echoed the sentiment, emphasizing the significance of maintaining a stable economic relationship and expressing belief in progress through direct, open, and practical dialogue. She highlighted ongoing efforts to establish new information channels to ensure more consistent engagement.
The rift between Beijing and Washington deepened in August 2022 when Beijing suspended dialogue on military, climate, and other matters in response to a visit by then-Speaker of the House of Representatives, Nancy Pelosi, to Taiwan. The Chinese Communist Party asserts its territorial claim over the self-ruled democratic island and opposes any foreign government’s engagement with it.
While positive coverage of the American visits to Beijing has been featured in the Chinese state press, there has been no indication that China intends to alter its policies on trade, market access, strategic matters, or other points of contention that have irked the US and its Asian neighbors.
These visits were part of an agreement made by President Joe Biden and Chinese President Xi Jinping during their meeting in November the previous year. However, progress with regards to resuming limited government-to-government communication has been modest, at best.
One major issue of contention for China is limited access to processor chips and other US technology. These restrictions have the potential to hamper the Communist Party’s ambitions in developing industries such as artificial intelligence. In response to security concerns, the US imposed these restrictions, which greatly impacted China’s smartphone giant, Huawei Technologies Ltd. To compound matters, Washington has persuaded the Netherlands and Japan to also limit Chinese access to tools critical for manufacturing advanced chips.
While Raimondo acknowledged that matters of national security allow for no compromise, she emphasized that the majority of US-Chinese trade does not involve such concerns. She expressed her commitment to promoting trade and investment in areas deemed mutually beneficial.
Raimondo defended the Biden administration’s de-risking strategy, which seeks to bolster domestic semiconductor production, ensure a diverse supply chain, and reduce the possibility of disruptions. China has criticized this strategy, contending that it aims to isolate China and restrain its growth. Raimondo clarified that the strategy is not intended to hinder China’s economic progress but rather to encourage healthy competition with a China that plays by the rules.
In May, Wang visited Washington, and although the US government extended an invitation to Chinese Foreign Minister Wang Yi, plans for the meeting have not yet been announced.
Meanwhile, the Biden administration has taken actions that may further strain US-China relations. In June, President Biden prohibited American investments in 59 Chinese companies, including military contractors and semiconductor manufacturers. In addition, the approval of a $500 million arms sale to Taiwan last week, which includes advanced infrared tracking systems for its F-16 fighter jets, is also expected to rankle Beijing.
As talks between the US and China continue, key concessions on significant demands have yet to be made. Both nations are treading cautiously, attempting to balance their respective interests while seeking opportunities for improved trade relations. The future remains uncertain, and it remains to be seen if mutual understanding and compromise can be achieved in the pursuit of a stable and mutually beneficial economic relationship.
