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Room seen for China, US to seek commerce negotiations_Focus News

Foreign policy experts see room for China-United States negotiations
on the bilateral commercial relationship, which was described as
complicated but crucial.

“This is good, as long as both sides are willing to behave positively
and focus on solutions rather than on blame,” Jack Midgley, principal
of global consultancy Midgley & Co, told China Daily.

US Commerce Secretary Gina Raimondo was the latest high-level
official from the administration of US President Joe Biden to visit
China. Her trip came amid worries that the growing tensions between the
two major global powers could escalate uncontrollably.

During her trip to Beijing and Shanghai, which began on Aug 27 and
concluded on Wednesday, Raimondo met with a number of senior Chinese
officials.

The two sides reached important consensus on increasing
communication, and they exchanged positions and demands on various
issues.

They also agreed to hold annual meetings between US and Chinese
commerce chiefs, to establish a mechanism for exchanging export control
enforcement information, and to set up a commercial issues working group
and a high-level dialogue between the two countries’ tourism
industries.

Midgley said that both the US and China were “obviously interested in a good outcome” for the trip.

“That’s a matter of hard economic interest,” he said, adding: “So the
real question is a pragmatic question. Are the two sides going to
continue to do the hard daily work of negotiating trade agreements and
advancing the economic development of both countries?”

Export controls are always “a stumbling block” in a bilateral
relationship, so the export control information mechanism “will provide
both sides with the information they need to reduce export controls step
by step, transaction by transaction”, and this will be “a good thing
for both sides”, Midgley said.

He added that since the US and China represent more than 40 percent
of total global GDP, and the relationship is the most important
bilateral economic relationship in the world, “removing obstacles to
that relationship is a very important step for the world and for the two
countries”.

“This was a good accomplishment and a testimony to the willingness of
both sides to work patiently and pragmatically on the relationship,”
said Midgely.

Raimondo said at a media briefing on Wednesday in Shanghai that she
was hopeful about holding regular, direct talks with Chinese officials,
but added that she did not expect that every issue between the US and
China could be resolved “overnight”.

According to Midgley, some advanced technologies, such as software,
advanced microprocessors, communications equipment and robotics, are key
to China’s development.

China must develop these technologies, while the US wants to maintain
an edge, Midgley said.”So this is where the US-China trade relationship
becomes complicated and where it has to be managed one piece at a
time.”

He added that Raimondo’s “national security” reference meant
artificial intelligence, advanced computing capabilities and advanced
materials, among other things.

“They are also the key drivers of economic development for the United
States and for China,” Midgley said. “Of course, we are going to
negotiate these technologies. These dual-use technologies are the main
challenge in the US-China trade relations today…. We have to negotiate
to reach solutions that are acceptable to both sides.”

Sourabh Gupta, a senior fellow at the Washington-based Institute for
China-America Studies, told China Daily that “the room for negotiations
on the US’ dual-use technology controls regime is a narrow one”.

“Fundamentally, the ‘room for negotiations’ in the US’ view is
primarily to improve market access and the business environment for US
companies doing or seeking to do business in China,” Gupta said.

He added that the area “most amenable” to a bilateral conversation on
improving the business environment relates to foreign companies in
China, because there is mutual desire on this front.

“The Chinese government would like to ramp up private sector
investment, including by foreign businesses, and to this end, it
recently put out a State Council opinion that was well-received by the
foreign business community,” Gupta said.

The US “would of course like its businesses to make greater inroads
in the Chinese market and fatten its profits – although I think there is
an overestimation at the US government end as to what it can achieve
for American businesses in China, given that the Biden administration
itself has been willfully creating an inhospitable business environment
for Chinese businesses in America”.

Nonetheless, “this is one of the few areas where the two sides can
provide mutually beneficial assurances to each other”, he added.

Midgley said:”The idea that China is ‘uninvestable’ is just nonsense.
Money is pouring into China. Foreign investment continues to pour into
China. It’s in China’s interest to make sure that it’s an attractive
place to invest.”

The two experts were not optimistic about shortening the blacklists
of Chinese companies for either US export or investment restrictions.

“At best, there is hope for only a marginal few to be delisted, and
that,too, only if a core US interest is involved. For example, the Biden
administration is considering removing a Chinese state entity -not a
Chinese commercial entity -from its Entity List as part of bilateral
give-and-take on the fentanyl issue,” said Gupta.

Midgley said it is not a US objective to shorten the lists. “It’s in
the US’ interest to favor domestic investment, particularly around the
blacklist areas. … I don’t think that’s going to change until the two
sides can think through how to deal with technologies like artificial
intelligence.”

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