Commerce Secretary Gina Raimondo arrived in Beijing late Sunday to kick off a four-day trip that the Biden administration hopes will stabilize trade ties with China as tensions rise amid a geopolitical competition between the world’s two largest economies.
Raimondo spoke with President Biden on Thursday in advance of the trip, and she told reporters that the president’s message centered around the idea that the U.S. and China need to keep lines of communication open to prevent disputes from escalating.
“We want to have a stable commercial relationship – and core to that is regular communication,” Raimondo said. “We need to communicate to avoid conflict.”
The U.S. and its allies have been working to restrict China’s access to advanced semiconductors due to concerns the high-end chips could aid the Chinese military’s modernization and enhance Chinese companies’ competitiveness while also furthering the government’s internal repression and human rights violations.
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Republican lawmakers have criticized reports that Raimondo will establish a working group with China to serve as a forum for discussions about U.S. export controls on semiconductors. Raimondo didn’t confirm plans for a working group on semiconductor issues but said she would tell Chinese officials that “when it comes to national security, we don’t negotiate. We don’t give concessions. We don’t compromise.”
Her visit to China comes a little more than one year after the bipartisan CHIPS Act was signed into law, which provided $52 billion in subsidies and incentives to build semiconductor manufacturing facilities in the U.S. to boost domestic production and reduce reliance on Chinese supply chains.
“Just because we’re investing in America does not mean at all that we want to decouple from China’s economy,” Raimondo said.
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Last spring, China slapped restrictions on Micron, a leading producer of chips used in computer memory and data storage hardware, after the U.S. and Japan announced curbs on Chinese firms’ access to tech used in chip manufacturing. China’s lead cybersecurity regulator cited “serious network risks to China’s critical infrastructure supply chain, affecting China’s national security” as the reason for the restrictions.
Raimondo’s trip comes amid reports that Chinese telecommunications giant Huawei has received roughly $30 billion in government funding and is building semiconductor manufacturing facilities under different business names that could allow it to dodge U.S. sanctions.
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The Commerce Department’s Bureau of Industry and Security told FOX Business in a statement last week, “Given the severe restrictions on Huawei, Fujian Jinhua, PXW and others, it is no surprise that they have sought substantial state support to attempt to develop indigenous technologies. BIS is continually reviewing and updating its export controls based on the evolving threat environment and, as evidenced by the Oct. 7 2022 rules, will not hesitate to take appropriate action to protect U.S. national security.”
Another topic on which Raimondo hopes to make progress during her trip to China is restoring tourism to pre-pandemic levels. Although the U.S. and China agreed this month to double the number of flights permitted between the two countries, it remains a fraction of what it was prior to the COVID pandemic. Raimondo estimated that if China returned to its 2019 level of tourism to the U.S., it would add $30 billion to the economy along with 50,000 jobs.
Chinese airlines have also been blocked from taking deliveries of Boeing 737 MAX jets for the last four years in deals worth “tens of billions of dollars,” Raimondo noted in 2021. Boeing says it’s ready to deliver airplanes to Chinese airlines “when the time comes,” although it’s unclear whether those deliveries will resume after Raimondo’s trip.
Raimondo – who is the fourth high-level official from the Biden administration to visit China in recent months and is the first commerce secretary to go to China in seven years – is set to hold bilateral meetings with Chinese officials on Monday and Tuesday in Beijing before she goes to Shanghai. U.S. Ambassador to China Nicholas Burns will join the secretary on the trip.
Reuters contributed to this report.
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