Xie Feng, China's ambassador to the U.S., has observed a 14.5% decrease in China-U.S. trade in the first half of the year in comparison to the figure from the previous year, attributing it to the tariffs and export controls imposed by the U.S. During the Forbes' U.S.-China Business Forum, he showed his aspirations for enlarging the synergistic commercial cooperation and trade between both countries. He also criticized the executive order of Biden preventing U.S. investments into Chinese AI and semiconductors, calling that a violation of the concept of free trade.
Xie Feng, China's ambassador to the U.S., indicated during a virtual speech at the Forbes' U.S.-China Business Forum in New York on Tuesday that the recent 14.5% decrease in trade between the two countries is a result of the tariffs and export controls imposed by the U.S. According to the Chinese Embassy in the U.S., Xie asserted that these restrictions are having a direct effect on the lives of many as businesses on both sides are suffering from the burden.
The US stands as China's premier trading partner in terms of single-country associations. Official data from China Customs indicated that US-China trade further diminished in July, noting a dip of 15.4% compared to the same period in 2022.
He warned that the greatest danger is if the U.S. and China become detached and the most severe source of anxiety originates from any clash between the two. In his words, “Turning away from China equates to eliminating chances for cooperation, steadiness and growth.” Although exports are still a central driver of China's economy, their ratio has been going down in recent times. Reuters reported on Wednesday that the U.S. government downgraded their domestic product projection for the second quarter to an annual rate of 2.1%, contrary to predictions that there would not be any adjustment. The report stated that decreasing corporate investments in tools caused the revision.
On Tuesday, Xie urged to seek "a way to widen mutually beneficial commercial cooperation and exchange between China and the United States." He continued by saying, "We should carry on moving ahead with practical actions, even if they might appear insignificant." He then gave illustrations such as facilitating travel between the two countries and reviving a pact for working together on science and technology. In terms of the area, China's head trading partners are the European Union and the Association of Southeast Asian Nations. Trade volume with these two has also gone down this year, though at a more moderate pace, consequent to the fall in worldwide demand.
Xie on Tuesday highlighted China's influence in trade and industries like electric vehicles. He remarked that France, the U.K. and Japan had noticeably increased their investment into China in the beginning of the year. He added that more initiatives would be implemented to secure foreign investments and guarantee fair treatment for foreign-invested businesses.
Xie mentioned U.S. Commerce Secretary Gina Raimondo's visit to China this week in his statements. As a result of her discussions with Chinese government representatives, both countries reached an understanding to initiate regular conversations about commerce, export restrictions and preserving trade secrets. Raimondo reported to journalists that she denied China's requests to reduce export regulations and reverse the executive order concerning outward investment review. She remarked, "We don't negotiate on matters of national security." he asked.
The U.S. government has cited national security reasons for its action of limiting Chinese companies' procurement of enhanced semiconductors from American businesses. In 2018, President Trump's administration set tariffs on Chinese goods, which was then answered by tariffs from Beijing. Xie commented that the tariffs imposed by the U.S. on Chinese commodities averaged 19%, whereas the tariffs China imposed on U.S. products averaged 7.3%. He questioned, "Is this fair? Is this truly advantageous to the United States?"
In May, the ambassador took up his post after a delay of around half a year, where China had no ambassador to the U.S. President Joe Biden signed an executive order in August to constrain U.S. investments into Chinese semiconductor, quantum computing and AI companies due to national security apprehensions. Treasury Secretary Janet Yellen is principally accountable for identifying the specifics, which are at present open for public commentary. Xie named the executive order as a "contravention of the rule of free trade."
CNBC has more information about China. Goldman Sachs has identified two China stocks that it believes are poised for a rebound. Furthermore, Morgan Stanley has specifed six of their top Chinese stocks, in particular a chip manufacturer that is anticipated to jump 80%. Additionally, the publication has also been exploring the types of purchases that the financially resilient citizens of China are making and the corresponding stocks that these decisions are affecting. Lastly, the competition in the chip manufacturing sector has been intensifying and one particular Chinese stock has soared 30% in the last five days.
Goldman Sachs identified China stocks that may experience a jump in value, and two have been included in their list of preferred selections. Morgan Stanley also pointed out six of their favored China stocks, among them a semiconductor manufacturer they predict will increase in worth by 80%. As China's devoted shoppers continue to purchase goods, a number of related stocks have gained from their spending. The competition in the chip-making market is escalating, with one Chinese stock rising 30% in a period of five days.
He commented that it was perplexing that the United States - which had in the past repeatedly urged China to open itself up to foreign investment - was now imposing its own restrictions. He warned that the United States would only deny American businesses the opportunity to grow in China and not limit China itself.
During her visit to China, Raimondo talked to around 100 businesses and said she heard from them that it had become too hazardous to invest in China. She told them that they would like to invest, but they necessitate certainty, legal procedure, and fair competition. She added this in a one-on-one conversation with CNBC's Eunice Yoon on Wednesday.
Comments