The US and China have agreed to set up a new working group to establish clearer communication on trade issues, but it is unlikely to ease further US sanctions against Chinese tech, warns GlobalData consultant Michael Orme.
The announcement of the group came during the US Secretary of Commerce Gina Raimondo’s state visit to Beijing on the 28 August 2023.
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In her address to China’s Minister of Commerce Wang Wentao, Raimondo acknowledged the economic relationship between the US and China as the most “significant in the world” with over $700bn of trade between the countries.
Despite referring to the major changes in investment and infrastructure within the US economy, such as the recent ban on all US investment towards Chinese tech companies, Raimondo reinforced that these changes were not “intended to hinder China’s economic progress.”
Both government officials as well as industry representatives will take part in discussions within the new working group. Discussions over sensitive technologies such as semiconductors and chip sanctions will take place separate to the main group.
Raimondo made it clear in her address that the Biden administration seeks “healthy competition” with China.
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By GlobalDataDespite this, GlobalData consultant Michael Orme believes it is “baying at the moon” to expect Raimondo’s trip to Beijing to soften US Chip sanctions.
Describing the sanctions as the US government’s “strongest weapon” against China’s technology sector, Orme instead alleges that Raimondo’s trip was an effort to build transparency and improve predictability within US-China relations.
However, Orme was optimistic that the meetings between Raimondo and Wentao would have been constructive in terms of the US and China collaborating on guardrails for sensible AI.
Reuters also reported that discussions on China’s export curbs on gallium and germanium, two key semiconductor metals, were also brought up in the discussions.
The working group will meet twice annually with the US expected to host the first in-person meeting early next year.
