US-China relations: slow but key progress made after high-level visits, say American entrepreneurs

While recent official meetings have yet to yield tangible deals, renewed diplomacy could mean friendlier commercial conditions, they say
Business owners reeling after pandemic are anxious about dialogue as many in Congress hold firm against engaging Beijing

US-China relations

Ralph Jenningsin San Francisco

Published: 3:20am, 18 Jul 2023

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High-level exchanges between China and the US have laid a foundation for mending relations between the rival powers and reopening business channels, American entrepreneurs say.

While official visits this summer have yet to produce tangible agreements that would signal a halt in fraying ties, the renewed diplomacy could lead to lower import tariffs and create a friendlier commercial climate on both sides, they contend.

“I think any direct engagement is better than rhetoric given to the media for political purposes,” said George Chen, an acclaimed chef and owner of a four-floor restaurant complex in San Francisco’s Chinatown.

“It’s really important to understand that both superpowers will suffer if China and the US don’t cooperate.”

After months of impasse, Washington and Beijing have resumed high-level dialogue. US Secretary of State Antony Blinken spoke last week in Jakarta with top Chinese diplomat Wang Yi on bilateral, regional, and global issues. Earlier this month US Treasury Secretary Janet Yellen visited Beijing, following on a visit Blinken made to the Chinese capital in June to meet President Xi Jinping.

This week, US President Joe Biden’s special climate envoy John Kerry arrived in Beijing for talks focused on environmental issues.

Yellen expressed confidence that her trip had helped put relations on a “surer footing” after disputes over trade, technology transfers, security and geopolitical issues.

The Yellen visit could build relations over an extended period, said Jeff Bowman, CEO of Colorado-based materials science firm Cocona. His company makes a sweat-drying masterbatch additive for yarn, and Chinese buyers are expressing more interest in it this year.

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“Relationships are not events,” Bowman said. “They are a long-term process.”

In the midwestern state of Wisconsin, 14-year ginseng farmer Jiang Mingtao voiced hoped that the US commerce secretary could follow up Yellen’s visit by reducing trade tariffs.

A US-China trade war launched in 2018 by ex-president Donald Trump has prompted import tariffs on US$550 billion worth of goods. China’s ginseng tariffs have forced Jiang to cut production in half.

US curbs on transfers of advanced technology to China have further strained relations, aside from the two sides continuing to spar over human rights, the future of Taiwan, and territorial disputes in the South China Sea.

Many retailers in Chinatown districts in the US like San Francisco’s want improved Sino-American relations. Photo: AP

Beijing for its part seeks to boost post-pandemic economic growth rates and sustain its global appeal as a place for investment.

Retailers across US Chinatowns want Yellen’s visit to result in improved Sino-American relations overall, said Brian Pang, co-lead organiser of the Chinatown Solidarity movement comprising Chinese business hubs in 18 North American cities.

Racial divides and the impact of Covid-19 have hurt business owners, he said, adding that “we’re all anxious about the geopolitical state” coming out of the dialogue.

But some in business spanning the two countries cautioned that the recent high-level visits have produced no tangible agreements. They note that Yellen and Blinken have mentioned a possible new ban by Washington against US investments in China that are linked to the country’s military.

George Chen, owner of Eight Tables restaurant in San Francisco, believes both China and the US will suffer if they do not cooperate better. Photo: Ralph Jennings

“American companies with China operations are pleased and relieved that high-level officials have begun meeting again,” said Douglas Barry, a Washington-based consultant who follows US-China trade trends.

“But there’s a sense that planks are being put over quicksand,” Barry added. “Much heavy lifting remains before the contours of a new normal become visible.”

The new investment curbs, were they to take effect, would at least be narrowed to apply to a specific issue with no intent to throw off unrelated business across the Pacific, said Ker Gibbs, a former American Chamber of Commerce Shanghai president and current executive-in-residence at the University of San Francisco.

“As Secretary Yellen said, the challenge here is to make sure the restrictions are targeted correctly without unintended consequences,” Gibbs said.

‘Valuable window of opportunity’ for US-China to deepen industrial ties

Many members of the US Congress, however, remain opposed to resuming engagement with China.

A House committee that monitors China’s Communist Party sounded off last week against what its members viewed as economic practices harmful to American business, while a number of bills targeting Beijing have moved towards a vote.

Meanwhile, the Senate’s pending Hong Kong Economic and Trade Office Certification Act could close or restrict Hong Kong’s economic offices in Washington, New York and San Francisco over US perceptions that they serve as Chinese mouthpieces.