By Ana Swanson and Keith Bradsher
The United States and China agreed on Monday to hold regular conversations about commercial issues and restrictions on access to advanced technology, the latest step this summer toward reducing tensions between the world’s two largest economies.
The announcement came during a visit to Beijing by Gina Raimondo, the U.S. commerce secretary, who is meeting with senior Chinese officials in Beijing and Shanghai this week.
The agreement to hold regular discussions is the latest move toward rebuilding frayed links between the two countries, a process that had already begun during three trips in the past 10 weeks by senior U.S. officials: Secretary of State Antony Blinken, Treasury Secretary Janet Yellen and John Kerry, the president’s climate envoy.
“I think it’s a very good sign that we agreed to concrete dialogue and I would say, more than just kind of nebulous commitments to continue to talk, this is an official channel,” Raimondo said in an interview after four hours of negotiations with China’s commerce minister, Wang Wentao.
Raimondo said Monday night in Beijing that she had an “open” and “pragmatic” discussion with Wang, and that she had raised the American business community’s concerns about China’s recent actions against Intel and Micron Technology, two semiconductor companies in the United States. The Chinese government has scuttled a large acquisition planned by Intel and has blocked some sales in China by Micron this year.
She said two separate dialogues would be established: One would be a working group that included business representatives and would focus on commercial issues. The other would be a governmental information exchange on U.S. enforcement of its export controls.
Bilateral talks about trade, technology and other economic issues were once the norm between the United States and China, but those discussions have atrophied in recent years. China halted eight bilateral discussion groups a year ago in retaliation for a visit to Taiwan by Rep. Nancy Pelosi, D-Calif., who was House speaker at the time.
The flight of a Chinese spy balloon that traveled across the United States last winter and was then shot down over the Atlantic Ocean only deepened divisions between China and the United States, and resulted in Blinken‘s initially canceling a trip to Beijing.
But relations have begun to thaw as both nations, whose economies are tied to each other, have opened the door to resuming diplomatic ties.
After the meeting, the Chinese Commerce Ministry said in a statement that Wang had expressed serious concerns about U.S. tariffs on Chinese imports, as well as the Biden administration’s efforts to bolster the U.S. semiconductor industry by providing government subsidies. Wang criticized those new subsidy programs, which are designed to lure manufacturing to the United States, as “discriminatory,” and he expressed concerns about U.S. sanctions on Chinese companies.
China is willing to work with the United States to create a sound policy environment for business cooperation between the countries, he told the U.S. side, according to the readout.
Even before Raimondo traveled to China, Republican lawmakers criticized her for planning a “working group” of U.S. and Chinese officials to discuss U.S. export controls. Four senior Republicans contended in a letter last week that it was “deeply inappropriate for our foremost adversary to have any influence over controls on sensitive U.S. national security technologies that the American people charged her to protect.”
Raimondo announced the new dialogue not as a working group, but as an “information exchange.” She said that it had been set up to share more information about U.S. export restrictions on advanced technology, but that the group’s creation did not mean the United States would be compromising on issues of national security. The first meeting of the export enforcement group was scheduled to take place in Beijing on Tuesday.
A senior Commerce Department official who was not authorized to speak publicly said that U.S. officials in the export enforcement group would discuss with their Chinese counterparts how regulations are enforced, but not which products are covered or how the policies are made. Enforcement has been a difficult issue for the two countries, partly because it involves having U.S. officials conduct inspections in China.
China had halted such inspections for roughly two years, but in the past eight months has allowed more than 100 such checks to proceed, the official said. The inspections of facilities in China are aimed at ensuring that the most advanced American technologies aren’t being diverted to the Chinese military or security services. Last week, the Commerce Department announced that 27 Chinese companies had passed such checks and were again allowed to import advanced technology.
Raimondo also said she and the Chinese commerce minister had agreed to meet with each other at least annually.
He Weiwen, a former Chinese Commerce Ministry official who is now a trade specialist at the Center for China and Globalization, a Beijing research group, said the bilateral agreement to have more discussions showed a mutual commitment to pragmatism.
“It means that both sides share the approach to solve practical issues,” he said.
But in a sign of how politically fraught relations with China remain, plans for a formal dialogue structure between the two countries drew criticism from some China hawks in the United States.
Matt Turpin, a visiting fellow at the Hoover Institution who was China director of the National Security Council during the Trump administration, described the move as a “real head scratcher.” He pointed to China’s unwillingness to take action to stop the flow of fentanyl into the United States, its alliance with Russia and its hacking of Raimondo’s email account before the trip as reasons China did not deserve such outreach.
“It seems that Raimondo gave a significant concession to Beijing and got nothing in return,” Turpin said.
U.S. officials conveyed the concerns of American businesses and investors, including unfair requirements faced by foreign businesses and a declining transparency in China’s economic statistics. China suspended the release of youth unemployment data this month after the figure reached a record high this summer.
Raimondo said she had spoken to nearly 150 business leaders in preparation for her trip and that they had given her a common message: We need more channels of communication.
“A growing Chinese economy that plays by the rules is in all of our interests,” she said.
As the Chinese economy has faltered this summer, Chinese officials have begun softening their stance on some issues. In the latest measure, the Foreign Ministry announced Monday that starting Wednesday, travelers to China would no longer need to test themselves first for COVID.
Michael Hart, the president of the American Chamber of Commerce in China, said there had been a change in direction from Chinese officials this summer, with an increased willingness to hold discussions.
“It used to be at every meeting I went to, the first five minutes were ‘Everything is America’s fault,’” Hart said. “It’s definitely toned down now. Government officials understand the importance of U.S.-China trade.”