U.S. corporations have complained to Gina Raimondo, the secretary of commerce for the United States, the fact that China has turned “uninvestible,” citing fines, raids, and other steps that have made conducting business in the world’s second-largest economy risky.
The remarks were the bluntest Raimondo and colleagues has made on her trip, and they painted a grim image of how American businesses regard China as her party of U.S. officials traveled from Beijing to Shanghai.
She stated that it was becoming increasingly common for American companies to warn against investing in China. Raimondo claimed that new challenges are being faced by American corporations including “exorbitant penalties with no explanation; modifications to the counterespionage legislation, which are not clear and sending waves of shock by means of the U.S. community as a whole raids on businesses – an entirely novel kind of opposition and we require that to be addressed.”
She disputed any similarities to U.S. export restrictions, claiming that “no rationale given” had been provided for Chinese steps targeting chipmaker Micron Technology, Inc. (MU.O), whose exports were blocked by Beijing early this year. An inquiry for comment was not immediately answered by the Chinese consulate in Washington.
Prior to Raimondo’s remarks, John Ramig, a partner at the law firm Buchalter with decades of experience in international commercial transactions, including the structure of worldwide procurement and manufacturing operations, stated that many companies do not intend to expand in China.
“I have no clients who want to make investments in China. Not even one customer. Everyone is trying to either sell off their Chinese business or, if they are getting goods from China, to find an other location to do so. That has changed significantly from just five years ago.
Earlier that day, during the conversation in the Great Hall of the People, Raimondo said to Chinese Premier Li Qiang: “There are other areas that are of international concern, such as the effects of climate change, machine learning, and the fentanyl crisis, in which we want to work with you as two world leaders to do what’s best for all of humanity.”
For many years, businesses have stood at the core of the power struggle between the two nations. While the United States claims that export restrictions are necessary to protect its national security, China has challenged U.S. efforts to restrict China’s access to sophisticated semiconductors through export controls.
The US is also encouraging automakers to relocate their manufacturing facilities out of China by leveraging electric vehicle tax laws, committing billions in incentives to increase American semiconductor manufacture, and adopting other steps, such as a new executive order, to do so.
Beijing is also limiting the shipments of well-known chipmaker Micron, delaying Intel Corp.’s (INTC.O) acquisition of another chipmaker, effectively killing the deal, and raiding and fining American company Mintz Group $1.5 million for performing “unapproved statistical work.” She previously blamed the Chinese government for Boeing’s (BA.N) inability to deliver and collect payment for 85 737 MAX jets bought by Chinese clients years ago.
Formerly the two countries’ main trading partners, Washington now conducts more business with neighbours Mexico and Canada, while Beijing conducts more business with Southeast Asia.