U.S. Commerce Secretary Gina Raimondo has called on China to improve the predictability of the business environment for American companies in the country. In an exclusive interview with CNBC’s Eunice Yoon, Raimondo stated that while there is a desire to do business with China, there is a need for predictability, due process, and a level playing field. She emphasized the importance of concrete actions to create a more predictable business environment.
Raimondo, who recently visited China and met with government officials in Beijing and Shanghai, highlighted the challenges faced by foreign companies in China, such as forced tech transfers and preferential treatment for local companies, particularly state-owned enterprises. These issues, along with China’s longstanding trade surplus with the U.S., have contributed to tensions between the two countries.
The U.S. government’s focus on national security has also played a role in shaping its policies towards China. Raimondo stressed the need to prevent advanced technology from America from advancing China’s military capabilities, indicating the U.S.’s commitment to ensuring national security.
In response to concerns about national security and market access challenges, both the U.S. and China have taken measures to regulate trade and investment. The U.S. Department of Commerce’s Bureau of Industry and Security has implemented export controls on advanced semiconductors, while the Biden administration proposed restrictions on U.S. investment in high-end Chinese tech.
China has also taken steps to address national security concerns, including updating its counter-espionage law and conducting raids on international consulting firms. However, Raimondo emphasized the importance of clarifying the new parts of the counter-espionage law to provide more clarity for U.S. companies operating in China.
While acknowledging some improvements in China’s protection of intellectual property and efforts to improve its court system, Raimondo believes that concrete actions are needed to create a more predictable business environment.
During her visit to China, Raimondo met with Vice Premier He Lifeng, who stated that China wants to maintain communication and support practical cooperation between businesses from both countries. The U.S. and China have agreed to establish regular communication channels on commerce, export controls, and protecting trade secrets.
However, analysts caution against expecting real breakthroughs from increased communication alone. Stephen Olson, senior research fellow at the Hinrich Foundation, highlights the fundamental contradiction in the Biden administration’s China strategy, which seeks to restrict China’s access to critical technologies while maintaining trade and investment opportunities in other areas.
In the conclusion of her China trip, Raimondo visited Boeing executives at a company facility in Shanghai. The U.S. aircraft giant is preparing to resume 737 Max deliveries to China after a four-year hiatus. Raimondo called it “an example of an action” and expressed hope that the Chinese government would take possession of the planes soon.
The outcome of Raimondo’s visit and the ongoing trade tensions between the U.S. and China will continue to shape the future of business relations between the two countries. Concrete actions aimed at creating a more predictable business environment will be key in building confidence and fostering greater cooperation between American and Chinese companies.