US, China agree to discuss export controls as commerce secretary visits to warm up chilly ties

By JOE McDONALD
AP Business Writer

BEIJING (AP) — Commerce Secretary Gina Raimondo said she and her Chinese counterpart agreed Monday to exchange information on U.S. export controls that frustrate Beijing and set up a group to discuss other commercial issues, but neither side appeared ready to make concessions on disputes that have plunged relations to their lowest level in decades.

Raimondo joined American officials including Treasury Secretary Janet Yellen in July who have visited China in hopes of reviving chilly relations. They expressed optimism about improving communication but no progress on conflicts over technology, security, human rights and a lingering tariff war.

For its part, Chinese leader Xi Jinping’s government wants to revive foreign investor interest in China as it tries to reverse a deepening economic slump.

Raimondo said she and Commerce Minister Wang Wentao agreed during a four-hour meeting to launch an “information exchange” on export controls. She said they also will set up a “working group” of officials and private sector representatives to “seek solutions on trade and investment issues.”

A key Chinese complaint is limits on access to processor chips and other U.S. technology on security grounds that threaten to hamper the ruling Communist Party’s ambition to develop artificial intelligence and other industries. The curbs crippled the smartphone business of Huawei Technologies Ltd., China’s first global tech brand.

Raimondo said the information exchange will hold its first meeting Tuesday.

“The United States is committed to being transparent about our export control enforcement strategy,” Raimondo told reporters at Ambassador Nicholas Burns’s official residence.

“We are not compromising or negotiating in matters of national security,” she said. “But this is meant to be a dialogue where we increase transparency.”

Earlier, Wang told Raimondo that Beijing is ready to work together to “foster a more favorable policy environment for stronger cooperation” and “bolster bilateral trade and investment.” Wang gave no details of possible initiatives.

Beijing broke off dialogues with Washington on military, climate and other issues in August 2022 in retaliation for a visit to Taiwan by then-Speaker Nancy Pelosi of the House of Representatives. The Communist Party claims the self-ruled island democracy as part of its territory and objects to foreign governments having contact with it.

The visits take place under an agreement made by Xi and President Joe Biden during a meeting last November in Indonesia. The Chinese state press has given them positive coverage, but Beijing has given no indication it might change trade, strategic, market access and other policies that irk Washington and its Asian neighbors.

In June, Secretary of State Antony Blinken met with Xi for 30 minutes during a visit that was postponed from February after a Chinese surveillance balloon entered U.S. airspace. The Chinese leader called on Washington to change policies on Taiwan and other issues and rebuffed a request to resume military-to-military cooperation.

Last week, on the day Raimondo’s visit to Beijing was announced, Washington removed 27 Chinese companies from a blacklist that limits access to U.S. technology.

The decision ”may have helped grease the wheels for Raimondo’s trip,” said Anna Ashton and Kylie Milliken of Eurasia Group in a report.

It suggests Washington “is making modest but measurable progress with Beijing in re-establishing limited government-to-government communication,” Ashton and Milliken wrote. ”Raimondo’s visit could produce additional progress.”

Meting with Wang, Raimondo defended the Biden administration’s “de-risking” strategy of trying to increase domestic U.S. production of semiconductors and other high-tech goods and to create additional sources of supply to reduce chances of disruption. Beijing has criticized that as an attempt to isolate China and hamper its development.

“It is not intended to hinder China’s economic progress. We believe a strong Chinese economy is a good thing,” Raimondo told the Chinese minister. “We seek healthy competition with China. A growing Chinese economy that plays by the rules is in both of our interests.”

Wang visited Washington in May. The U.S. government invited Foreign Minister Wang Yi to Washington, but plans for that have not been announced.

Raimondo also was due to meet China’s No. 2 leader, Premier Li Qiang, and other officials.

The Biden administration also has taken steps that are likely to rankle Beijing.

In June, Biden added 59 Chinese companies including military contractors and semiconductor manufacturers to a list of entities Americans are prohibited from investing in.

Last week, Washington approved a $500 million arms sale to Taiwan including infrared tracking systems for advanced F-16 fighter jets.