Global Courant
At a rally in Beijing on Friday, China’s leader Xi Jinping exchanged a warm smile with Bill Gates and praised Gates as “the first American friend” he had met this year.
The meetings in Beijing between Secretary of State Antony J. Blinken and his Chinese colleagues, which begin Sunday, are likely to feel noticeably cooler.
The high-level meetings aim to get the US-China relationship back on track, and many US business leaders have urged the Biden administration to restore some stability to one of the world’s most important bilateral relationships.
But for business leaders and officials on both sides, expectations for the meetings seem modest, with two main goals for the talks. One is restoring communications between governments, which fell this year after a Chinese surveillance balloon flew into US airspace and Mr Blinken canceled a visit scheduled for February. The other is to halt any further deterioration in the relationship between the countries.
There is already evidence of the impact of the fraying tires. Foreign direct investment in China has fallen to an 18-year low. A 2023 study by the US Chamber of Commerce in China found that companies still see the Chinese market as a priority, but their willingness to invest there is declining.
“The economic relationship has become so bad that any sign of progress is welcome, although expectations for a breakthrough are low,” said Jake Colvin, president of the National Foreign Trade Council, which represents multinational corporations.
“The hope is that such high-level dialogues can begin to inject some certainty for business into an increasingly fraught and unpredictable trading relationship,” he said.
Still, as one of the world’s largest consumer markets and home to many factories that supply international companies, China has a strong pull. This year, as it eased travel restrictions after three years of pandemic lockdowns, a parade of chief executives made trips to China, including Mary Barra of General Motors, Jamie Dimon of JPMorgan Chase And Stephen Schwarzman of Blackstone.
During a visit to China this month, Elon Musk, the CEO of Tesla and owner of Twitter, described the US and Chinese economies as “Siamese twins” and said he opposes efforts to split them. Apple’s CEO, Tim Cook, traveled to China in March praised the company’s “symbiotic” relationship with the nation.
Sam Altman, the leader of OpenAI, who creates the ChatGPT chatbot, appeared virtually at a conference in Beijing this month, saying US and Chinese researchers must continue to work together to counter the risks posed by artificial intelligence.
The tech industry, which has forged lucrative relationships with Chinese manufacturers and consumers, has viewed Washington’s aggressive approach to China with suspicion. While industry groups recognize the importance of taking steps to ensure national security, they have urged the Biden administration to carefully tailor its actions.
Wendy Cutler, a former diplomat and trade negotiator who is now vice president of the Asia Society Policy Institute, said the United States and China may announce some small steps forward at the end of the meetings. Governments could agree, she said, to increase the meager number of flights between their countries or the visas they issue to foreign visitors.
But both sides will have plenty of grievances to air, Ms. Cutler said. Chinese officials are likely to complain about US tariffs on goods made in China and restrictions on US companies selling coveted chip technology to China. US officials may be pointing to the deteriorating business climate in China and the recent move to ban companies that process critical information from buying microchips made by US company Micron.
“I don’t expect any breakthroughs, especially on the economic front,” Ms Cutler said, adding: “Neither side is going to want to smile.”
US officials hope Mr Blinken’s visit will pave the way for greater cooperation, including on climate change and restructuring developing country debt. Other officials, including Treasury Secretary Janet L. Yellen, are considering visits to China this year, and Mr Xi and President Biden could meet face-to-face at the Group of 20 meetings in Delhi in September or an Asia-Pacific economic meeting. Pacific Ocean in San Francisco in November.
In recent months, Biden officials have tried to bridge the gap between the countries by advocating for a more “constructive” relationship. They have echoed European officials in saying they are longing for “reduce risk and diversify” their economic relations with China.
But trust between governments has been eroded and Chinese officials seem skeptical about how much the Biden administration can do to restore ties.
Extensive US restrictions on semiconductor technology that can be shared with China, issued in October, continue to baffle Beijing officials. The United States has added dozens of Chinese companies to sanctions lists for aiding China’s military and surveillance state, or circumventing US trade restrictions with Iran and Russia.
Biden administration officials are considering further restrictions on China, including a long-delayed order for certain U.S. venture capital investments. And the White House is under intense pressure from Congress to do more to address national security threats emanating from Beijing.
Not all companies push for improved tyres. Some with less exposure to China have sought political advantages in Washington from growing competition with the country. Meta, the parent company of Facebook and Instagram, has repeatedly expressed concern about TikTok, the Chinese-owned video app that has proven to be a formidable competitor to Instagram.
“It’s really a degree dispute,” said James Lewis, a senior vice president at the Center for Strategic and International Studies. “How accommodating are you? How confrontational are you?”
How aggressively companies are resisting tensions with China, Mr. Lewis, correlates with their exposure to the Chinese market.
“I think a lot of this has to do with your presence in China,” he said.
