China Extends Invitation to US Commerce Secretary for Visit Following Implementation of Investment Controls

17 Aug, 2023

China Extends Invitation to US Commerce Secretary for Visit Following Implementation of Investment Controls

China has expressed its openness to hosting a visit from U.S. Commerce Secretary Gina Raimondo, following the implementation of foreign investment controls by her agency, which have impacted several Chinese companies. Shu Jueting, the spokesperson for China's Commerce Ministry, mentioned that while no specific date was provided, the two nations are engaged in "close communication on arrangements," as reported on Thursday.

Speculation has arisen that this visit could potentially take place later this month. Raimondo's last interaction with her Chinese counterpart, Wang Wentao, took place in Washington in May, focusing on trade discussions.

The recent move by President Joe Biden, who signed an executive order on August 9 to regulate and block U.S. high-tech investment in China, underscores the escalating competition between the world's largest economies. The order encompasses areas such as advanced computer chips, microelectronics, quantum information technologies, and artificial intelligence.

Officials in senior administration positions have emphasized that this effort is motivated by national security objectives rather than economic interests. They have intentionally limited the scope of the categories covered by the order. The overarching goal is to curtail China's potential to leverage U.S. investments in its technology firms for military advancements, while simultaneously preserving essential trade relationships that contribute significantly to both nations' economies.

Shu explained that China is conducting a thorough evaluation of the impact of the U.S. executive order on foreign investment and will take appropriate responsive actions based on the assessment's findings.

In the backdrop of an evolving geopolitical rivalry marked by differing sets of values, including in relation to Russia's actions in Ukraine, China's willingness to engage with Raimondo stands out. With China's economic growth slowing to 0.8% for the quarter ending in June, it appears more inclined to cooperate with economic officials like Raimondo compared to defense personnel and diplomats, with whom its interactions have been more limited.

Officials within the Biden administration have maintained that they do not aim for economic "decoupling" from China. However, they have implemented measures such as restricting the export of advanced computer chips and retaining the tariffs introduced during the tenure of former President Donald Trump.

In response, China has accused the U.S. of employing the pretext of "risk reduction" to advance the agenda of "decoupling and chain-breaking."

Meanwhile, China has undertaken crackdowns on foreign companies, leading to waning confidence and prompting global firms to reconsider their investment strategies and divert their plans toward other nations.

Amid calls from Chinese leader Xi Jinping and others for greater economic self-reliance, investors have expressed uncertainty about their future prospects within the state-driven economy.