US businesses face ‘uninvestable’ risks in China, Commerce Secretary warns

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Raimondo raises concerns over China’s actions against American firms

US Commerce Secretary Gina Raimondo said on Tuesday that she heard from American businesses that China is becoming “uninvestable” due to the Chinese government’s fines, raids and other actions that have made it too risky to do business in the world’s second-largest economy.

Raimondo made the remarks during her visit to China, which was aimed at boosting trade and tourism ties between the two countries amid heightened geopolitical tensions and economic competition. She met with Chinese Vice Premier He Lifeng, who is in charge of economic relations with Washington, and Chinese Premier Li Qiang, the No. 2 leader of the Communist Party.

Raimondo said she raised the challenges faced by American firms in China, including “exorbitant fines without any explanation, revisions to the counterespionage law, which are unclear and sending shockwaves through the US community; raids on businesses – a whole new level of challenge and we need that to be addressed.”

She cited the example of China’s move to restrict imports from chipmaker Micron Technology in May, saying there was “no rationale given” by the Chinese government for the move. She also defended the US export controls on sensitive technologies that could be used for military or human rights purposes by China, saying they were necessary for national security and had “limited due process”.

He Lifeng expresses willingness to improve cooperation with US

He Lifeng, who heads the National Development and Reform Commission, China’s top economic planning agency, sounded an optimistic note during his meeting with Raimondo. He said he was ready to “make new positive efforts” to deepen consensus and extend cooperation with the US based on their previous “in-depth exchanges” in July with Treasury Secretary Janet Yellen.

US businesses face ‘uninvestable’ risks in China

He said he hoped the two sides could “respect each other’s core interests and major concerns” and “properly handle differences and sensitive issues”. He also said he welcomed more American investment and tourists in China and hoped to expand bilateral trade in goods and services.

The two governments agreed to launch an “information exchange” on US export controls and China’s import restrictions, as well as other commercial disputes. They also agreed to resume talks on a bilateral investment treaty that has been stalled since 2017.

China tries to revive investor confidence amid regulatory crackdown

China has been facing a backlash from foreign investors and companies after launching a series of regulatory crackdowns on various sectors, including technology, education, entertainment, gaming and property. The moves have wiped out billions of dollars in market value and raised concerns over the unpredictability and arbitrariness of China’s policies.

China’s President Xi Jinping has said the crackdowns are part of his vision to achieve “common prosperity” and social stability in the country. He has also vowed to pursue “self-reliance” in key technologies and industries amid growing pressure from the US and its allies.

However, some analysts have warned that China’s actions could hurt its own economic growth and innovation potential, as well as alienate foreign partners and customers. They have urged China to adopt a more transparent and consistent approach to regulation and market opening.

Raimondo’s visit to China was the latest in a series of high-level contacts between the two countries since President Joe Biden took office in January. The two sides have expressed their willingness to cooperate on areas of mutual interest, such as climate change, trade and COVID-19, while managing their differences on issues such as human rights, Taiwan and cybersecurity.

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