The US Commerce Secretary warns that China will be “uninvestable” without action on raids and fines

SHANGHAI (AP) — Commerce Minister Gina Raimondo said on Wednesday she had warned Chinese leaders that US companies may stop investing in their country without swift action to address complaints about worsening conditions due to the coronavirus. corporate raids, Unexplained fines and unpredictable official behaviour.

Raimondo’s comments add to the pressure on Chinese President Xi Jinping’s government, which is trying to revive investor interest Reverse economic recession. Business groups say trust among foreign firms is at an all-time low. Official figures show that foreign investment fell in the last quarter.

Raimondo visited Beijing As part of US efforts to restore relations that have fallen to their lowest point in decades over disagreements over technology, security, Taiwan and other issues. She described her meetings with China’s number two, Premier Li Qiang, and other officials as “very productive,” but said she “made no effort” in relaying trade complaints.

Raimondo said the CEOs had told her before her trip that they were facing increasing pressure from the company Beijing expands anti-espionage law This year, raids on some companies, tighter control over data, and a lack of information about rule changes.

“My point was that US companies need to take some action to address these issues. Otherwise, they would consider it too risky and, as I said, uninvestable,” Raimondo told reporters at a Boeing joint venture in Pudong, east Shanghai.

Foreign direct investment into China fell 89% from a year earlier in the three months ending in June, according to official data. Most investment is believed to be brought into the country by Chinese companies disguised as foreign money to gain tax breaks and other incentives, but business groups have warned that foreign companies are withholding new spending until their situation becomes clearer.

“I’m running out of patience,” Raimondo said. It said conditions imposed on companies that have complained for years of technology theft and official favoritism toward Chinese competitors “have become tougher in some ways”.

Economic growth fell to 0.8% quarter-on-quarter in the three months ending in June from 2.2% in the January-March period. That equates to an annual rate of 3.2%, which would be among China’s weakest in decades.

Despite this, Lee, the prime minister, expressed confidence in the economy’s ability to achieve the annual growth target set by the ruling party of “around 5 percent.”

Raimundo said she welcomed moves such as the ruling party’s announcement of a 24-point plan to improve conditions for entrepreneurs. She said Shanghai’s party secretary, Chen Jining, told her on Wednesday that the city was considering setting up a hotline to receive business complaints.

“We have to see that the situation on the ground matches the rhetoric,” Raimondo said.

Raimondo’s visit produced the most important outcome of a series of trips to Beijing over the past three months by US officials, including Secretary of State Antony Blinken in June and Treasury Secretary Janet Yellen last month.

On Monday, the two governments announced that they would form groups to reduce trade tensions by exchanging information about US export controls on technology that angers Beijing and discussing other trade disputes. They also agreed to meet officials to discuss the protection of trade secrets and to hold a “Travel and Tourism Summit”.

Beijing cut off dialogue with Washington on military, climate and other issues in August 2020 in response to then-Speaker of the House Nancy Pelosi’s visit to Taiwan. The ruling party claims the self-governing democratic island as part of its territory and objects to foreign official contacts.

Relations were already strained by a tariff war unleashed by then US President Donald Trump over complaints including that Beijing was stealing technology or pressuring it.

Li Raimondo on Tuesday appealed for Washington to take “concrete measures” to improve relations, referring to Chinese pressure to change US policy on Taiwan, technology and other issues.

Washington has blocked China’s access to processor chips and other technology for security reasons. This threatens to derail the ruling party’s ambitions to create artificial intelligence and other industries. Xi accused Washington in March of trying to block China’s development.

The group held its first meeting on Tuesday. Raimundo said he would meet several times. It said the meetings were intended to provide information and would not lead to changes in US export controls.

“We were able to make clear in the first meeting that we are not targeting China,” Raimondo said. He added, “We target actions and behaviors that undermine US national security, and we have sought to begin to clarify our procedures.”

Raimondo said export controls “will continue to be the biggest point of contention, but communication can only help.”

Conditions for foreign companies have worsened after the expansion of anti-espionage law, which some say makes them unsure of the nature of the consumer and what other information they can collect. Research firm Mintz Group She was fined $1.5 million this month for improperly collecting data. China has ordered makers of some data equipment to stop using products from the largest US maker of memory chips, Micron, for security reasons.

The secretary said she had raised the status of Visa and MasterCard as an example of the need to treat each other’s companies in the same way. Credit card issuers have waited years for approvals to operate in China, while Chinese payment services Alipay and UnionPay operate freely in the United States.

“We haven’t solved anything, but I think it’s important to bring the issue to the table,” Raimundo said. “And I felt heard.”

In a later phone call with reporters, Raimondo said she told Chinese officials that hackers had stolen her emails. She said nothing about the source, but the Washington Post reported in July that she and Blinken were targets of Chinese state-backed hackers.

“I mentioned it as an eroding act of trust,” she said.