Beijing says US and China are working to make the business environment less volatile

BEIJING – China and the United States are working toward creating a more stable and predictable environment for businesses, Chinese Commerce Minister Wang Wentao said Friday.

Since US Commerce Secretary Gina Raimondo’s visit to China last summer, the two countries have agreed to hold regular meetings at the ministerial level and below. Wang and Raimondo had a call earlier this month.

That communication “seeks to create a good environment for the two countries’ economic and trade cooperation, especially in stabilizing business expectations,” Wang said in Mandarin at a news conference translated by CNBC.

He did not mention US technology sanctions, but said sanctions bring uncertainty to trade and “greatly increase” compliance costs.

Over the past two years, the Biden administration has issued export controls that limit the ability of Chinese companies to buy advanced technology such as high-end semiconductors from American businesses. Washington has said it is a way to prevent China’s military from accessing cutting-edge technology while maintaining areas of cooperation.

“We always believe that China and the United States’ common interests in economy and trade are greater than their differences,” Wang said.

The US and other foreign businesses in China have long complained of challenges in doing business in the Asian country, such as unequal treatment of foreign companies compared to local players. Recently, international businesses have said that Beijing’s vague rules regarding data transfers out of the country make operating difficult.

In the fall, the Cyberspace Administration of China (CAC) released new draft rules stating that no government oversight is required for data export if regulators have not determined that it qualifies as “critical.” The move was widely seen as an improvement for foreign businesses, but no official policy has yet been made.

Asked Friday for an update on the data regulations, Wang said only that “the primary ministry is increasing efforts to release them.”

He said China has acted on a 24-point plan released last summer to support foreign businesses in the country – which includes implementation or progress on “more than 60%” of measures. Wang also said the ministry has set up regular channels for foreign businesses to share feedback.

When Raimondo visited China last year, she called for more action to improve the outlook for American businesses in China. “Any one of them can be addressed as a way to show action,” he said, referring to the 24-point plan.

China’s economic growth has slowed from the double-digit pace of previous decades to 5.2% growth in 2023. The pace of growth is expected to slow down further this year.

Wang told reporters on Friday that this year, the international trade situation will be “even more complex and serious”, pointing to factors such as rising geopolitical tensions.

Foreign direct investment fell 8% to 1.13 trillion yuan ($160 billion) in 2023, the lowest level in three years, according to commerce ministry data. It did not specify how much the US invested in China, while France and Britain saw the largest increases in such investment last year.

China has sought to promote foreign investment in the country.

Earlier this month at the World Economic Forum’s annual conference in Davos, Switzerland, Chinese Premier Li Qiang gave a speech that portrayed China as an opportunity rather than a risk.

“Davos is filled with CEOs who have a penchant for intellectual property misappropriation, cursory changes to agreements, arbitrary legal decisions favoring local competitors, and more,” Ian Bremmer, founder and chairman of Eurasia Group, said in a note Monday. There are stories of.”

“But I was also impressed by the breadth of CEOs across diverse sectors (finance, health care, insurance, manufacturing, technology, luxury goods, transition energy and more) who told me stories of not only increased access over the past months, but new There were also commercial terms, licenses and partnerships, which they were legitimately excited about,” Bremmer said.

He said that “almost every Fortune 500 CEO doing business in China” whom he met there was planning to visit China more this year than last year.

“Even at 2-3% growth, the shift in political impulse from the world’s second largest economy with massive industrial infrastructure and huge consumer base cannot be ignored.”