‘Candid talks’: China and US trade officials vow to step up communication to manage tensions

China and the US exchanged barbs over their differences on trade but nevertheless agreed to step up communication to manage heightening conflicts after top trade officials from both sides met in Washington on Thursday.

Chinese Commerce Minister Wang Wentao and his United States counterpart Gina Raimondo had “candid, professional and constructive” exchanges on bilateral trade relations and concerns, China’s Ministry of Commerce said in a statement on Friday.

“China emphasised its concerns on the US’ China trade policy, semiconductor policy, export control and overseas investment scrutiny. Both sides agreed to set up communication channels to maintain and step up exchanges on concrete trade concerns and cooperation,” the ministry said.

A statement issued by the US Department of Commerce said the discussions were “candid and substantive” and the two officials talked about “the overall environment in both countries for trade and investment and areas for potential cooperation”.

“Secretary Raimondo also raised concerns about the recent spate of PRC actions taken against US companies operating in the PRC,” the US statement said, referring to the People’s Republic.

“This meeting was part of ongoing efforts to maintain open lines of communication and responsibly manage the relationship. Secretary Raimondo expressed her commitment to continuing to build on the engagement between President Biden and President Xi in Bali, Indonesia, in November 2022.”

The meeting – Wang’s first face-to-face talks with Raimondo since the latter took office in 2021 – came after Beijing banned semiconductors from the US-owned Micron in key infrastructure projects and US consultancy firms in China were subjected to national security raids. The US Commerce Department said the ban on Micron was not based on facts.

China also came in for criticism at the Group of Seven meeting in Hiroshima last week, with leaders accusing China of “economic coercion” and saying they would “de-risk” without “decoupling” from the world’s second-largest economy in everything from chips to minerals.

Beijing responded to the communique by saying the G7 countries should not abuse trade and investment restrictions.

“We hope that the G7 members will put into practice their statement that they are not seeking to ‘decouple’ from China, instead of saying that they are not seeking to ‘decouple’ while abusing trade and investment restrictions to suppress and curb China’s development,” Commerce Ministry spokeswoman Shu Jueting said on Thursday.

Beijing also expressed opposition to Washington’s move towards a new trade pact with Taiwan.

At Apec, top US official urges ‘worker-centric’ approach to trade policy

The China-US meeting and subsequent pledge for greater communication were positive moves, according to He Weiwen, a senior fellow with the Beijing-based think tank Centre for China and Globalisation.

“The most pressing issue for China and the United States is to establish a dialogue mechanism to clearly state their differences, and then discuss how to solve or ease them,” he said.

He said that such a mechanism should be restored to discuss not only commerce issues, but also culture, agriculture, energy management and technology to show willingness in Beijing and Washington to cooperate and manage differences.

“This is in the interests of the companies of both countries.”

Pang Zhongying, chair professor of international political economy at Sichuan University, said the meeting was a good start for the two countries to manage their ties, but it remained too early to tell whether it would lead to a wider thawing of relations.

“The engagement of senior officials in charge of trade shows the will not to decouple from both sides, but it can’t be interpreted as improving relations in trade, or the overall ties between the two countries,” Pang said.

Wang Wentao, who is attending the Apec trade ministers meeting in Detroit this week, will meet US trade representative Katherine Tai, according to Shu. Wang last met Tai at an Apec meeting in Thailand in November.

US lawmaker demands action against Chinese chip firm CXMT after Micron

The meetings will be a further attempt by the world’s top two economies to re-engage after stalemates as bilateral ties soured in recent years.

US exports to China expanded last year to an all-time high of US$151.3 billion, from US$149.5 billion in 2021, according to an annual report released on Thursday by the US-China Business Council advocacy group. The report says China-bound exports last year “supported” 1.06 million jobs.

But inflation “largely boosted” the 2022 dollar figure, according to the report. China’s demand for oil, gas and semiconductors “saw significant declines” last year, it said, while oilseeds and grains were the biggest export category.

“The US-China trade relationship has grown steadily for decades, but those ties appeared to weaken slightly, according to data covered in the report,” the council said.

Additional reporting by Ralph Jennings and Zhuang Pinghui