Page 56 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
China, the China-US relationship has run into it has an advantage; and resorting to conflict
serious difficulty", and that the relationship "is and confrontation at all costs. Douglas Paal,
not a multiple-answer question of whether we distinguished fellow of the Asia Program at the
should have good relations, but a compulsory Carnegie Endowment for International Peace,
question of how", according to a Chinese said, "I am hoping that someone on the US side
readout of the conversation. The White House realized that recent high-level interactions were
said in a statement that during the 90-minute going nowhere, or, more likely, downhill, and it
call made at the request of the US side, the two was time to get the top leaders engaged." The
leaders "discussed the responsibility of both phone call may have been the best event in the
nations to ensure competition does not veer past five years and could signal a gradual de-
into conflict". More regular calls leading to face- escalation of tension (Zhao, Fixing Ties).
to-face discussions are needed on possible
topics, such as what happens with the Phase While the overall relationship remains tense,
One trade agreement expired at the end of the bilateral trade flow has been growing in a
2021; what's required of both countries to lift completely different direction. The China customs
or reduce punitive tariffs; and what the plan is data shows that, during the first eight months of
for cooperating on existential threats such as 2021, China-US two-way trade in goods soared
global warming and pandemics. The status quo to an all-time high of US$470.32 billion, or a
will remain or deteriorate further unless the two growth of 36.6% year-over-year, 2.4 percentage
presidents become more engaged and with a points higher than China's global trade growth.
greater sense of urgency. The latest presidential By October 2021, while Chinese exports to the US
phone call, following one in early February 2021, rose by 33.3% to US$354.16 billion, its imports
was a culmination of interaction between China from the US rose by 48% to US$110.81 billion. It
and the US since Biden took office in late January. was expected the whole year 2021 final reports
A senior Biden administration official said Biden would show total two-way trade would break
initiated the call with Xi "to really have a broad the US$700 billion barrier, with Chinese exports
and strategic discussion about how to manage exceeding US$550 billion and imports above
the competition between the United States and US$170 billion, all historic records and apparently
China". It's quite likely that engagement at the higher than the pre-trade war level in 2018. China
leader level is really what's needed to move the also enjoyed a good momentum in FDI inflows
ball forward. In March, China's top diplomat Yang in 2021. During the first seven months, FDI
Jiechi and US Secretary of State Antony Blinken inflows broke the US$100 billion barrier for the
led teams for talks in Anchorage, Alaska, in which first time in history, at US$100.74 billion, a year-
Yang rejected Washington assuming a "position over-year growth of 30.3%. A striking contrast
of strength" in its approach to China. At their is that the government relations, including
Tianjin meeting in late July, State Councilor and the trade policies, are lagging far behind the
Foreign Minister Wang Yi marked out China's pace and needs of day-to-day operations by
"three bottom lines" to US Deputy Secretary business communities, local governments, and
of State Wendy Sherman. The first bottom citizens of the two countries. The commerce
line is that the US must not challenge, slander departments of both China and the US should
or attempt to subvert the path and system of immediately start dialogue and consultations on
socialism with Chinese characteristics. The second all issues of concerns. The industrial policy and
is that the US must not attempt to obstruct or subsidies issues could well be on the agenda. It
interrupt China's development process. The third is recommended that both sides set up a joint
is that the US must not infringe upon China's ad hoc group of trade experts for a fact-finding
sovereignty or damage its territorial integrity. In survey of the issue. At the end of its task, a
his talks with Sherman, Vice-Minister of Foreign mission report, consisting of, among others, hard
Affairs Xie Feng said that US policy seems to be facts and verified evidence, not merely opinions,
demanding cooperation when it wants something should be forwarded to the Chinese and US
from China; decoupling, cutting off supplies, governments for assessment and consultations
blockading or sanctioning China when it believes for appropriate solutions (He, No Time).
56
China, the China-US relationship has run into it has an advantage; and resorting to conflict
serious difficulty", and that the relationship "is and confrontation at all costs. Douglas Paal,
not a multiple-answer question of whether we distinguished fellow of the Asia Program at the
should have good relations, but a compulsory Carnegie Endowment for International Peace,
question of how", according to a Chinese said, "I am hoping that someone on the US side
readout of the conversation. The White House realized that recent high-level interactions were
said in a statement that during the 90-minute going nowhere, or, more likely, downhill, and it
call made at the request of the US side, the two was time to get the top leaders engaged." The
leaders "discussed the responsibility of both phone call may have been the best event in the
nations to ensure competition does not veer past five years and could signal a gradual de-
into conflict". More regular calls leading to face- escalation of tension (Zhao, Fixing Ties).
to-face discussions are needed on possible
topics, such as what happens with the Phase While the overall relationship remains tense,
One trade agreement expired at the end of the bilateral trade flow has been growing in a
2021; what's required of both countries to lift completely different direction. The China customs
or reduce punitive tariffs; and what the plan is data shows that, during the first eight months of
for cooperating on existential threats such as 2021, China-US two-way trade in goods soared
global warming and pandemics. The status quo to an all-time high of US$470.32 billion, or a
will remain or deteriorate further unless the two growth of 36.6% year-over-year, 2.4 percentage
presidents become more engaged and with a points higher than China's global trade growth.
greater sense of urgency. The latest presidential By October 2021, while Chinese exports to the US
phone call, following one in early February 2021, rose by 33.3% to US$354.16 billion, its imports
was a culmination of interaction between China from the US rose by 48% to US$110.81 billion. It
and the US since Biden took office in late January. was expected the whole year 2021 final reports
A senior Biden administration official said Biden would show total two-way trade would break
initiated the call with Xi "to really have a broad the US$700 billion barrier, with Chinese exports
and strategic discussion about how to manage exceeding US$550 billion and imports above
the competition between the United States and US$170 billion, all historic records and apparently
China". It's quite likely that engagement at the higher than the pre-trade war level in 2018. China
leader level is really what's needed to move the also enjoyed a good momentum in FDI inflows
ball forward. In March, China's top diplomat Yang in 2021. During the first seven months, FDI
Jiechi and US Secretary of State Antony Blinken inflows broke the US$100 billion barrier for the
led teams for talks in Anchorage, Alaska, in which first time in history, at US$100.74 billion, a year-
Yang rejected Washington assuming a "position over-year growth of 30.3%. A striking contrast
of strength" in its approach to China. At their is that the government relations, including
Tianjin meeting in late July, State Councilor and the trade policies, are lagging far behind the
Foreign Minister Wang Yi marked out China's pace and needs of day-to-day operations by
"three bottom lines" to US Deputy Secretary business communities, local governments, and
of State Wendy Sherman. The first bottom citizens of the two countries. The commerce
line is that the US must not challenge, slander departments of both China and the US should
or attempt to subvert the path and system of immediately start dialogue and consultations on
socialism with Chinese characteristics. The second all issues of concerns. The industrial policy and
is that the US must not attempt to obstruct or subsidies issues could well be on the agenda. It
interrupt China's development process. The third is recommended that both sides set up a joint
is that the US must not infringe upon China's ad hoc group of trade experts for a fact-finding
sovereignty or damage its territorial integrity. In survey of the issue. At the end of its task, a
his talks with Sherman, Vice-Minister of Foreign mission report, consisting of, among others, hard
Affairs Xie Feng said that US policy seems to be facts and verified evidence, not merely opinions,
demanding cooperation when it wants something should be forwarded to the Chinese and US
from China; decoupling, cutting off supplies, governments for assessment and consultations
blockading or sanctioning China when it believes for appropriate solutions (He, No Time).
56
