China’s Ministry of Commerce emphasized the importance of restoring stability in U.S.-China trade relations as a way to “de-risk” the situation. This term has been used by U.S. and EU officials to indicate that they are not completely severing ties with China but rather diversifying their trade relationships to decrease reliance on China. The Ministry of Commerce spokesperson, Shu Jueting, stated that returning to the consensus reached by the two heads of state at the Bali meeting and maintaining a healthy and stable development path for China-U.S. trade relations would be the best way to achieve this. This approach would provide stability, increase business confidence, and allow for the optimal utilization of bilateral economic trade relations.
Last year, President Joe Biden and President Xi Jinping met in Bali, Indonesia, marking their first in-person meeting since Biden took office. This meeting set the stage for formal plans for U.S. Secretary of State Antony Blinken and other senior officials to visit China this year.
Contrary to declarations of full or partial decoupling, Scott Kennedy, a senior advisor and trustee chair in Chinese business and economics at the Center for Strategic and International Studies, believes that substantial trade and investment ties between the U.S. and China will continue as long as they are not in open military conflict. This perspective aligns with the belief that maintaining ties with China is not only commercially beneficial, but also strategically important for national security reasons.
Shu highlighted that U.S. direct investment in China has increased by 25.5% in the first seven months of this year. The Ministry of Commerce is actively working with local authorities to implement plans aimed at improving the investment environment for foreign entities.
The Chinese side, during a meeting between Chinese Commerce Minister Wang Wentao and U.S. Commerce Secretary Gina Raimondo, expressed concerns about the generalization of national security measures impacting normal economic trade exchanges. They argued that such measures would disrupt global supply chains, damage economic and trade collaboration, and hinder cooperation between the two countries.
During her trip to Beijing and Shanghai, Raimondo emphasized the need for predictability, due process, and a level playing field while acknowledging a desire to do business with China. She clarified that the U.S. is not seeking to decouple from China or hinder its economic growth.
China’s Ambassador to the U.S. Xie Feng attributed the 14.5% decline in bilateral trade in the first half of the year to U.S. tariffs and export controls. Analysts at Eurasia Group stated that the U.S.-China relationship remains fundamentally competitive and, in some aspects, bordering on adversarial. However, the Biden administration is pursuing a strategy of targeted escalation and moderated concessions to manage the adversarial elements. They also noted that the upcoming U.S. presidential election cycle will introduce additional volatility in the coming months.
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