December 4, 2023

Business International

Business International For Your Health

US and China signal trade relations improvement amid diplomatic talks

In a bid to mend frosty ties between the two economic giants, US Commerce Secretary Gina Raimondo and her Chinese counterpart conveyed their shared commitment to improving trade relations during Raimondo’s visit to Beijing.

Raimondo’s visit follows a series of diplomatic exchanges, including a visit by Treasury Secretary Janet Yellen in July, as both nations strive to overcome existing challenges. Despite the expressions of optimism and willingness to communicate, substantive progress on matters such as technology disputes, security concerns, human rights, and other contentious issues that have contributed to strained relations remains elusive.

The Chinese government, led by President Xi Jinping, aims to revitalise foreign investor confidence in the wake of an ongoing economic slowdown.

Better cooperation between American and Chinese enterprises

Commerce Minister Wang Wentao conveyed Beijing’s readiness to collaboratively create a more conducive policy environment that supports enhanced cooperation between American and Chinese enterprises. This initiative is expected to fortify bilateral trade and investment ties. However, no specific details of potential measures were provided.

Raimondo highlighted ongoing efforts to establish improved channels of communication, which would enable more consistent and productive engagement between the two sides. She emphasised the significance of fostering a stable economic relationship and expressed optimism about making progress through direct, open, and practical discussions.

Dialogue between Beijing and Washington was suspended in August 2022 after then-Speaker Nancy Pelosi of the US House of Representatives visited Taiwan. China’s ruling Communist Party views Taiwan as part of its territory and opposes foreign governments engaging with the island’s democracy.

While the Chinese media has portrayed the recent American visits to Beijing in a positive light, there is no indication that China intends to alter its trade, strategic, or market access policies that have caused friction with the US and its regional neighbours.

Limitations on US security concerns 

A major point of contention for China lies in the limitations imposed on access to US technology, particularly processor chips, due to security concerns. These restrictions pose a challenge to China’s ambitions in industries such as smartphones and artificial intelligence.

Wang’s visit to Washington in May and the invitation extended to Chinese Foreign Minister Wang Yi for a visit to the US demonstrate some willingness for engagement, but concrete plans for such visits have yet to be announced.

Raimondo’s itinerary also includes meetings with China’s second-ranking official, Premier Li Qiang, and other dignitaries during her two-day sojourn in Beijing and Shanghai.

(With PTI inputs)