Reuters: Shanghai/WashingtonAfter U.S. Commerce Secretary Gina Raimondo claimed that American companies had informed her that China had become “uninvestible,” China has defended its commercial practises, emphasising a trend of international investors shunning assets in the second-largest economy in the world.
The commerce secretary is the most recent member of the Biden administration to travel to China in an effort to improve relations, notably in the areas of economy and defence, amid worries that tension between the two superpowers could get out of hand.
Despite her insistence that the United States does not wish to separate from China, her remarks on the challenges facing American companies cast a harsh light on trade and investment flows between the two geopolitical foes.
When asked to comment on Raimondo’s remarks in China, Liu Pengyu, the spokeswoman for the Chinese embassy in Washington, said that the majority of the 70,000 U.S. companies operating in China wanted to stay, that nearly 90% of them were profitable, and that Beijing was working to further open up the Chinese market to foreign businesses.
Despite her insistence that the United States does not wish to separate from China, her remarks on the challenges facing American companies cast a harsh light on trade and investment flows between the two geopolitical foes.
When asked to comment on Raimondo’s remarks in China, Liu Pengyu, the spokeswoman for the Chinese embassy in Washington, said that the majority of the 70,000 U.S. companies operating in China wanted to stay, that nearly 90% of them were profitable, and that Beijing was working to further open up the Chinese market to foreign businesses.
A record outflow of 82.9 billion yuan ($11.4 billion) in net foreign selling of Chinese stocks this month. Foreign direct investment (FDI), which is at its lowest level since records have been kept 25 years ago, is also disappearing from corporate investment.
On Wednesday, Raimondo is in Shanghai for his final day of meetings before leaving for the US.
When asked what advice she had for American companies operating in China, Raimondo responded, “The answer is to keep doing what you’re doing. We want you to invest and develop here.
On a high-speed train from Beijing to Shanghai on Tuesday, she, however, revealed to reporters that American businesses had complained to her that China had become “uninvestible,” citing fines, raids, and other acts that had made it risky to conduct business in the second-largest economy in the world.
She is urging China to take steps to enhance the business environment.
Businesses had expressed their worries to the Chinese government in a “very clear” manner, according to Michael Hart, president of the American Chamber of Commerce in China.
According to Hart, “some actions, such as raids on businesses and restricting data flows, are not conducive to attracting more FDI.”
Jens Eskelund, head of the European Union Chamber of Commerce in China, supported that sentiment and stated that “under-invested” is a better way to describe China than “uninvestible.”
When questioned about the “uninvestible” remark during a briefing, a spokesperson for China’s foreign ministry chose to reiterate demands on the United States to take more “practical and beneficial actions” to preserve relations instead of directly responding.
The spokeswoman quoted Premier Li Qiang as saying that the best way for all sides to get along is through mutual respect, peaceful cohabitation, and win-win collaboration.
American businesses, according to Raimondo, are facing new difficulties, including “exorbitant fines without any explanation, revisions to the counterespionage law, which are unclear and sending shockwaves through the U.S. community; raids on businesses – a whole new level of challenge and we need that to be addressed.”
She disputed any similarities to export restrictions in the United States and claimed that China’s measures against chipmaker Micron Technology, whose goods were limited by Beijing this year, had “no justification given.”
This week, Raimondo claimed that when she met with Chinese authorities to discuss the worries of American businesses, she did not mince words and brought up Micron’s treatment in particular.
In her opening remarks, Raimondo set a constructive tone for her meeting with Shanghai Party Secretary Chen Jining, saying she wanted to discuss “concrete ways that we can work together to accomplish business goals and to bring about a more predictable business environment, a predictable regulatory environment, and a level playing field for American businesses.”
According to Chen, the world needs China and the United States to have a stable relationship. He said that Shanghai has the greatest concentration of American companies.
“The economic and business links act as a stabilising ballast for bilateral relations. But the modern world is really confusing. The economic recovery is a little underwhelming. Therefore, solid bilateral relations in the areas of commerce and business are in the interests of two nations as well as the international community.
She will conduct a press conference at a Boeing Shanghai factory before leaving on Wednesday after visiting the Shanghai campuses of New York University and Shanghai Disneyland, a joint venture of Walt Disney and the Chinese state-owned Shendi Group.
Raimondo said that China is preventing tens of billions of dollars’ worth of Boeing aircraft deliveries to Chinese airlines. She claimed that she brought up the airlines’ refusal to accept Boeing 737 MAX aircraft but received no commitments.
(Editing by Sandra Maler and Robert Birsel; reporting by David Shepardson in Shanghai and Andrea Shalal in Washington; additional reporting by Nicoco Chan and Jason Xue in Shanghai and Joe Cash, Martin Quin Polland, Yew Lun Tian, and Laurie Chen in Beijing.)