US, China to cover ‘expansive’ range of topics during Gina Raimondo visit, but no immediate solutions expected

US Commerce Secretary Gina Raimondo is expected to raise issues including raids on American consultancy firms and market access during her four-day China visit, according to sources with knowledge of the discussions.

Beijing, meanwhile, will demand further relaxation of US export controls as part of its broad concerns over ongoing containment efforts, they added.

China’s ban on the sale of products from US memory chip firm Micron Technology, data security and Beijing’s anti-espionage law are also set to be discussed, according to one source, with the issues seen as top concerns for American businesses.

“Secretary Raimondo represents both her respective department and the US government as a senior official, hence the topics to be covered could be expansive,” the person said.

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Raimondo will “be accompanied throughout” her trip, which will start on Sunday, by US ambassador Nicholas Burns, the person added.

Chinese authorities raided the Beijing office of American due diligence firm Mintz Group and the Shanghai office of US consulting giant Bain & Company earlier this year on national security reasons, fanning widespread fears among the foreign business community.

Such investigations also generated confusion as the world’s second-largest economy has pledged to create a good business environment and vowed to keep investors onshore amid supply chain upheaval.

What’s more important is that the steady drumbeat of senior meetings between the US and China increases comfort for collaboration at the working levels

Han Shen Lin

A key concern for Beijing ahead of the meeting is whether the US government will make any policy changes and clarifications regarding its export controls and plans to restrict financing to Chinese companies covering semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems, another source said.

“There is scepticism that Secretary Raimondo’s short trip will result in anything substantive for US-China commercial relations,” said Han Shen Lin, China country head at The Asia Group consulting firm.

“What’s more important is that the steady drumbeat of senior meetings between the US and China increases comfort for collaboration at the working levels – where real progress is made.”

China’s Ministry of Commerce and the US embassy in China did not immediately respond to requests for comment.

Commerce ministry spokeswoman Shu Jueting said on Thursday that China will “declare its position” towards Raimondo on certain “imminent” trade issues.

“We simultaneously also hope that the trade disagreement between both countries can be resolved and we’ll push through in-depth discussions on practical cooperation,” she said.

“We’re aware of the recent difficulties and challenges for bilateral trade and investment, which is related to a series of unilateral measures and protectionism actions from the US.

“China will continue to show our concerns and do our best to create a stable and fair business environment.”

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In May, Chinese authorities said Micron had failed to pass a cybersecurity review, and prohibited the sale of its products to China’s critical information infrastructure operators, which include a wide range of entities from telecoms operators to banks and water utilities.

Earlier this month, US tech giant Intel terminated its deal to buy Israeli foundry Tower Semiconductor for US$5.4 billion “due to the inability to obtain in a timely manner the regulatory approvals [from Chinese regulators] required under the merger agreement”, it said.

Mintz, meanwhile, was recently fined around US$1.5 million for conducting “unapproved statistical work”.

[They] are accurately seen as an attempt to dial-down the tension, but this should be seen in light of Chinese perceptions of American aggressiveness

Frank Tsai

Raimondo’s scheduled meetings represent the fourth major meeting between officials from China and the US this summer following recent trips by US Secretary of State Antony Blinken, Treasury Secretary Janet Yellen and climate envoy John Kerry.

Veteran US diplomat Henry Kissinger was also given a red-carpet welcome on his return to Beijing last month.

“[They] are accurately seen as an attempt to dial-down the tension, but this should be seen in light of Chinese perceptions of American aggressiveness, and the possibility of American amends: The Americans are at fault, so they should come to China,” said Frank Tsai, adjunct professor of international studies at Xian Jiaotong-Liverpool University in Suzhou, who played down market expectations ahead of Raimondo’s visit.

South China Morning Post