The U.S. and China launched a new commercial trade working group and a new pathway to exchange information on export control enforcement, two initiatives to allow the countries to better communicate around sensitive trade issues, the Commerce Department announced during meetings between Washington and Beijing officials this week. The export enforcement information sharing initiative, which will meet for the first time this week, is aimed at reducing “misunderstanding” surrounding U.S. policies toward China, Commerce said, including export restrictions on critical and sensitive technologies.
Exports to China
A bill was introduced in the House that could lead to new export controls on genetic mapping technology and sanction entities in China and elsewhere involved in certain genetic mapping efforts. The bill would specifically direct the Commerce Department to deny licenses for those exporting these items to certain countries unless the exporter can submit documentation to the government "to demonstrate by clear and convincing evidence that, if the license is approved, the technology will not be used for human rights abuses or by an entity that has engaged in human rights abuses."
American chipmaker Nvidia continued to raise alarms this week about the potential of additional export restrictions on the U.S. semiconductor industry, saying new rules will hurt its long-term sales to China.
Commerce Secretary Gina Raimondo will visit Beijing and Shanghai Aug. 27-30 to meet with senior Chinese officials and business leaders, the agency announced Aug. 22. Raimondo looks “forward to constructive discussions on issues relating to the U.S.-China commercial relationship, challenges faced by U.S. businesses, and areas for potential cooperation.” China's Ministry of Commerce, according to an unofficial translation, said Raimondo's planned visit is "at the invitation of Chinese Minister of Commerce Wang Wentao." Ahead of the trip, the U.S. Commerce Department said, Raimondo met with Chinese ambassador Xie Feng and had a "productive discussion."
British semiconductor company Arm, in its initial U.S. public offering this week, said it’s facing uncertainty from U.S. and U.K. export controls and doesn’t expect to receive an export license to ship certain high performance processor cores to China. The company also said it’s expecting to see slower growth in its China sales revenue due to several factors, including various government-imposed “trade and national security policies.”
China is planning “countermeasures” to respond to the Biden administration's recent executive order on outbound investment, a Chinese Ministry of Commerce spokesperson told reporters this week. The spokesperson said China has “serious concerns” about the restrictions -- which will eventually lead to prohibitions and notification requirements for U.S. investment in three advanced technology sectors in China -- and said the U.S. is “harming others and harming itself.”
China’s recently imposed export controls on gallium and germanium (see 2307050018) -- two metals used to produce semiconductors -- were for legitimate national security reasons, Beijing said this week, rebuking comments from U.S. officials and lawmakers who have said the restrictions have no justification (see 2307060053). In an Aug. 9 post on Chinese social media site Weixin, the National Security Ministry said the country's national security concerns stem from an incident in 2009, when an employee working for a global mining company in China tried to access “detailed technical analysis of dozens of Chinese iron and steel enterprises and accurate parameters of each production process.”
China is not convinced that the U.S. is only trying to derisk, not decouple, from China’s economy, said Ryan Hass, a former National Security Council official. He said Beijing is wary of the growing number of U.S. sanctions and trade restrictions and doesn’t believe the Biden administration is acting in “good faith,” which risks further worsening tensions.
Congress needs to enact stronger export controls legislation to complement the Biden administration’s outbound investment restrictions against China unveiled last week (see 2308090066 and 2308100045), said House Foreign Affairs Indo-Pacific Subcommittee Chairwoman Rep. Young Kim, R-Calif. Kim said she’s “glad” the administration is “acting to restrict U.S. investment of critical technologies developed in China,” and she said the measure “should not be treated as a silver bullet.”
China this week criticized the recent U.S. restrictions on outbound investment in three advanced technology sectors in China (see 2308090066).