China, U.S. commerce chiefs trade complaints, plan more talks

Top commerce officials from the U.S. and China agreed to strengthen communications even as they traded complaints about each other’s policies, with the meeting a sign that Beijing and Washington are trying to prevent their relations from worsening further.

U.S. Commerce Secretary Gina Raimondo spoke about “the recent spate” of actions taken against U.S. companies in China during a meeting with her Chinese counterpart, Wang Wentao, the Commerce Department said in a statement.

In turn, Wang expressed concerns about U.S. restrictions on the chip sector, export controls, reviews of outbound investment, as well as America’s overall economic and trade policy with China, the Chinese Ministry of Commerce said in a statement released Friday Beijing time.

Wang’s trip to the United States is the highest-level visit by a Chinese official in more than two years.

It coincides with a push by the Biden administration to halt relations between the countries from worsening after a series of problems, ranging from the furor over an alleged spy balloon that traversed the U.S. in February to tit-for-tat sanctions and export controls on semiconductors.

The pair had “candid and substantive” talks about issues relating to the U.S.-China commercial relationship, including the overall environment in both countries for trade and investment and areas for potential cooperation, according to the Commerce Department statement released Thursday after the meeting in Washington.

China’s Commerce Ministry said the meeting was candid and constructive, and that the two sides agreed to “build communication channels” to “maintain and strengthen exchanges” on trade concerns and cooperation.

Raimondo didn’t mention any company by name, but China on Sunday said it was banning some critical firms from buying products from Idaho-based Micron Technology for national security reasons, a step that has triggered calls for retaliation in Washington.

Wang also met U.S. Trade Representative Katherine Tai on the sidelines of the an Asia-Pacific Economic Cooperation forum in Detroit on Friday.

While echoing Raimondo’s message about the treatment of U.S. firms in China and keeping open lines of communication, Tai “highlighted the need to address the critical imbalances caused by China’s state-led, nonmarket approach to the economy and trade policy,” according to a statement from her office.

Speaking at the end of the Group of Seven summit in Japan on Sunday, President Joe Biden expressed optimism that relations with China would “thaw very shortly.”

New ambassador to the U.S., Xie Feng, later said the relationship is facing “serious difficulties and challenges” as he arrived in the U.S. to take up his post.

Trade and commercial relations are some of the most difficult areas of contention.

Raimondo’s department has taken the lead in restricting exports of chips and chipmaking technology to China, accelerating the strategic competition between the two superpowers and setting off dueling accusations of “economic coercion.”

In response to U.S. actions, Beijing has created a legal tool kit that would allow it to retaliate, including setting up an “unreliable entity” list which it used to sanction some U.S. defense companies earlier this year in response to U.S. arms sales to Taiwan.

While those actions were largely symbolic and didn’t lead to actual financial damages to U.S. firms, the action against Micron this week has real teeth as it will actually ban some of the company’s sales.

Micron gets 11% of its revenue from China, according to data compiled by Bloomberg, and the partial ban on it’s sales appears to mark a shift in Beijing’s strategy.

The last time Chinese dignitaries came to the U.S. on a formal visit was in March 2021, when then-Foreign Minister Wang Yi and then-Politburo member Yang Jiechi met Secretary of State Antony Blinken, national security adviser Jake Sullivan and other administration officials.

The discussions quickly descended into bickering, with an extraordinary back and forth that saw the sides trading accusations over the state of democracy in their countries and accuse each other of grandstanding.

Sullivan and Wang Yi met in Europe earlier this month for two days of talks, with that conversation setting the stage for a possible call between Biden and Chinese President Xi Jinping, something that Chinese leaders have resisted for weeks.