Page 58 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
Recoupling has chosen to continue to subject US companies
to these damaging taxes". David French, senior
Trade groups and experts have given a vice-president of government relations with the
cautious welcome to the Biden administration's National Retail Federation, said US businesses
new China trade policy, which includes across the country continue to be severely
"recoupling" with the world's second-largest impacted by the tariffs introduced by the
economy instead of "decoupling", but they said it previous administration. "Today's long-awaited
was "distressing" that US tariffs on Chinese goods announcement proved the Biden administration's
would remain. In a highly anticipated speech in trade strategy on China to be lackluster at most,
September 2021, the Biden administration's top and will further inflict unnecessary damage to the
trade official, Katherine Tai, said that she plans to American economy and retail supply chains," he
hold "frank" talks with Chinese officials, and that said (Zhao, Cautious).
the tariffs are to remain in place and could be
bolstered by additional rounds, but a "targeted The Chinese media's response to what
tariff exclusion process" would be reinstated for appears to be a constructive idea has been
companies hard hit in the trade war. She also put cautiously positive. But the irony is that the Biden
forward a new phrase to frame the future of the administration has made only limited exemptions.
trade relationship—"durable coexistence", and It seems like a conflicting approach: abandoning
called for a "recoupling" of the two economies, the de-coupling policy but maintaining the tariffs
a clear swerving from the calls for "decoupling" which, paradoxically, are aimed at de-coupling
that US trade hawks have advocated for years. the Chinese economy from that of the US. Hence,
The United States retains tariffs imposed by the there is no "de-coupling". According to the US-
Trump administration covering over US$135 China Business Council member survey in July
billion—or 93%—of imports of intermediate 2021, 95% of the responding companies said they
inputs from China. Tariffs on such parts and made profits in the Chinese market in 2020, and
components increase costs for US companies 78% said the Chinese market is better than other
seeking to compete not only for business from US emerging markets. The 2022 Special Report on the
consumers, but also globally and in China through State of Business in South China, released together
exports. The Trump administration granted some with this 2022 White Paper on the Business
product exclusions, but most of the waivers have Environment in China by the American Chamber
expired. New tariff exclusions will be narrow, of Commerce in South China, shows that 76% of
which is "very different" from repealing the Trump the American companies with existing operations
tariffs. In the short term, it is important for the US in China expect to reinvest in China in 2022. And
Trade Representative (USTR) to press ahead with Goldman Sachs and other Wall Street giants have
a robust tariff exclusion mechanism that provides held talks on capital market cooperation directly
some relief to industries buffeted by the effects with the Chinese government, leaving Washington
of the pandemic and supply chain shortages. aside. To ensure "durable coexistence", Tai
Some organizations were quick to point out that called for managing competition and promoting
the trade strategy was "lackluster", and fell far fair competition. Tai's narrative puts China in
short of US businesses' expectations, particularly a rule-breaker's position as a "State-centered
on the tariffs. "Although restarting an exclusion economic system" lacking "adherence to global
process is an important step forward, the far trading norms" that undercuts "the Americans
better course would have been to discontinue and all others around the world". She mentioned
use of these tariffs entirely," American Apparel & cases in which China had "violated" World Trade
Footwear Association President and CEO Steve Organization rules, and claimed the sharp
Lamar said hours after Tai's speech. Lamar noted increase in Chinese steel output had rendered
that at a time when industry is struggling with 40% of US steel workers jobless. The aim of both
an unprecedented supply chain crisis due to Tai and Raimondo was to paint China as a rule-
crumbling infrastructure, economic fallout from a breaker and claim that the US is a rule-defender,
damaging pandemic and unprecedented freight and force China to make fundamental changes
costs, "it is distressing that the administration to its government, industrial and trade policies
58
Recoupling has chosen to continue to subject US companies
to these damaging taxes". David French, senior
Trade groups and experts have given a vice-president of government relations with the
cautious welcome to the Biden administration's National Retail Federation, said US businesses
new China trade policy, which includes across the country continue to be severely
"recoupling" with the world's second-largest impacted by the tariffs introduced by the
economy instead of "decoupling", but they said it previous administration. "Today's long-awaited
was "distressing" that US tariffs on Chinese goods announcement proved the Biden administration's
would remain. In a highly anticipated speech in trade strategy on China to be lackluster at most,
September 2021, the Biden administration's top and will further inflict unnecessary damage to the
trade official, Katherine Tai, said that she plans to American economy and retail supply chains," he
hold "frank" talks with Chinese officials, and that said (Zhao, Cautious).
the tariffs are to remain in place and could be
bolstered by additional rounds, but a "targeted The Chinese media's response to what
tariff exclusion process" would be reinstated for appears to be a constructive idea has been
companies hard hit in the trade war. She also put cautiously positive. But the irony is that the Biden
forward a new phrase to frame the future of the administration has made only limited exemptions.
trade relationship—"durable coexistence", and It seems like a conflicting approach: abandoning
called for a "recoupling" of the two economies, the de-coupling policy but maintaining the tariffs
a clear swerving from the calls for "decoupling" which, paradoxically, are aimed at de-coupling
that US trade hawks have advocated for years. the Chinese economy from that of the US. Hence,
The United States retains tariffs imposed by the there is no "de-coupling". According to the US-
Trump administration covering over US$135 China Business Council member survey in July
billion—or 93%—of imports of intermediate 2021, 95% of the responding companies said they
inputs from China. Tariffs on such parts and made profits in the Chinese market in 2020, and
components increase costs for US companies 78% said the Chinese market is better than other
seeking to compete not only for business from US emerging markets. The 2022 Special Report on the
consumers, but also globally and in China through State of Business in South China, released together
exports. The Trump administration granted some with this 2022 White Paper on the Business
product exclusions, but most of the waivers have Environment in China by the American Chamber
expired. New tariff exclusions will be narrow, of Commerce in South China, shows that 76% of
which is "very different" from repealing the Trump the American companies with existing operations
tariffs. In the short term, it is important for the US in China expect to reinvest in China in 2022. And
Trade Representative (USTR) to press ahead with Goldman Sachs and other Wall Street giants have
a robust tariff exclusion mechanism that provides held talks on capital market cooperation directly
some relief to industries buffeted by the effects with the Chinese government, leaving Washington
of the pandemic and supply chain shortages. aside. To ensure "durable coexistence", Tai
Some organizations were quick to point out that called for managing competition and promoting
the trade strategy was "lackluster", and fell far fair competition. Tai's narrative puts China in
short of US businesses' expectations, particularly a rule-breaker's position as a "State-centered
on the tariffs. "Although restarting an exclusion economic system" lacking "adherence to global
process is an important step forward, the far trading norms" that undercuts "the Americans
better course would have been to discontinue and all others around the world". She mentioned
use of these tariffs entirely," American Apparel & cases in which China had "violated" World Trade
Footwear Association President and CEO Steve Organization rules, and claimed the sharp
Lamar said hours after Tai's speech. Lamar noted increase in Chinese steel output had rendered
that at a time when industry is struggling with 40% of US steel workers jobless. The aim of both
an unprecedented supply chain crisis due to Tai and Raimondo was to paint China as a rule-
crumbling infrastructure, economic fallout from a breaker and claim that the US is a rule-defender,
damaging pandemic and unprecedented freight and force China to make fundamental changes
costs, "it is distressing that the administration to its government, industrial and trade policies
58
