US and China to begin dialogue on export controls

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US and Chinese officials are set to begin a new dialogue on export controls on Tuesday, agreed during a visit by Washington’s secretary of commerce Gina Raimondo to Beijing to restore relations between the world’s biggest economies.

Washington described the talks between government officials on the “export control enforcement information exchange” as “a platform to reduce misunderstanding of US national security policies”.

China’s Ministry of Commerce said the talks would serve to “exchange information related to export control, in accordance with their respective laws”.

The talks come with Raimondo set to hold further high-level meetings with Chinese government officials in Beijing on Tuesday. The US secretary of commerce is on a four-day trip that follows China visits by secretary of state Antony Blinken and Treasury secretary Janet Yellen.

US officials said their Chinese counterparts had been receptive to the talks with Raimondo. China, which is struggling to revive its economy after pandemic lockdowns last year, is seeking to reinvigorate foreign investment amid a deep property market downturn and falling exports. 

A senior US commerce official said their country viewed the export control enforcement information exchange as a forum to increase transparency on its new rules restricting trade and investment with sensitive areas of China’s economy, and not one for negotiating policy. 

The aim was to encourage compliance with the new rules by providing more information about their implementation, thereby reducing the need for punitive action and enforcement, the official said.

President Joe Biden this month announced an executive order banning some US investment into China’s quantum computing, advanced chip and artificial intelligence sectors to stop the Chinese military from accessing American technology and capital. 

The new executive order will come into force next year and require companies to notify the US government of other investments in the three Chinese sectors.

China, for its part, has announced restrictions on the export of gallium and germanium — two metals used in chipmaking — and the use of Micron Technology products in its critical infrastructure.

Beijing has also announced restrictions on the export of drones and drone components, citing their potential military use. The restrictions could affect both sides in the Ukraine war.

The talks under the export control information exchange would be for government officials, the senior US commerce official said. 

China’s ministry of commerce in Beijing said commerce minister Wang Wentao had expressed concern to Raimondo during their meeting over US tariffs, semiconductor policies, investment restrictions, “discriminatory subsidies” and sanctions targeting Chinese companies.

“Over-generalisation of national security is not conducive to normal trade and economic exchanges,” it quoted Wang as saying.

The export control information exchange was one of several new mechanisms agreed for dialogue between the two sides. Others included a commercial issues working group, which will hold its first session next year in the US, and technical discussions on protecting trade secrets and business information during licensing procedures.

On Tuesday morning, Raimondo met Hu Heping, China’s minister of culture and tourism. One of her aims on the trip is to rebuild personal ties that became frayed after China restricted visa access in recent years to limit the spread of Covid-19. 

Raimondo also agreed to meet China’s minister of commerce in person at least once a year. “We need more channels of communication. A few CEOs said to me that they were desperate for more communication,” Raimondo told a gathering of US business leaders on Monday night in Beijing, explaining why she was establishing the new mechanisms.