Commerce Secretary Says Arbitrary Business Environment in China Needs to Change

Commerce Secretary Gina Raimondo told reporters in China that she didn't solve any specific business problems during her visit -- nor did she expect to -- and defended the new working group she announced.

"I don't want to return to the days of dialogue for dialogue's sake. That being said, nothing good comes from shutting down communication. What comes from lack of communication is misassessment, miscalculation and increased risk. Nothing good comes from decoupling," she said Aug. 30. "It doesn't serve our economic goals and it doesn't serve our national security goals."

Raimondo, whose agency also manages export controls, said, "Now, I want to also be clear, I didn't pull any punches.... I explained very clearly, that as the commerce secretary, it's my job to both protect what we must, protect our technology, and to promote where we can. And I explained that it is possible to do both and to do both at the same time.

"What it means is that when it comes to matters of national security, there's no negotiation. There is no room to negotiate when it comes to protecting Americans' national security, including protecting emerging technology. But at the same time, there's business we can do and there's business to be done."

Raimondo said she raised issues such as subsidization and intellectual property theft -- issues that led to 25% tariffs and 7.5% tariffs on the vast majority of Chinese imports.

She also raised new issues, such as counter-espionage raids on international firms that do due diligence.

She said when she speaks to businesses with operations in China, "I hear about unfairness, arbitrary decisions, a lack of due process, raids on their businesses that go unexplained. Tens of millions of dollars in fines for reasons that aren’t clear. And so my point is that actions speak louder than words, and as long as that is happening on the ground, that makes it very risky for U.S. businesses to do business here."

The U.S.-China Business Council issued a statement that said they agree that the U.S. can have "robust trade with China while protecting national security."

They approved of the working group, adding: "There is more work to be done in other areas, such as market access and protecting intellectual property in China, and USCBC will continue to support these efforts."