US Commerce Secretary warns of rising risk for American companies investing in China

Gina Raimondo, the US Secretary of Commerce, has conveyed concerns from American businesses regarding China’s escalating risks, branding the country as “uninvestable.” She cited fines, raids, and ambiguous legal changes that have hindered smooth business operations.

Raimondo’s remarks emerged as her delegation transitioned from Beijing to Shanghai, marking a pivotal visit by a top-ranking US official to China.

During discussions with Chinese Premier Li Qiang and other officials, Raimondo emphasized the growing perception of China as a risky investment destination. This perspective reflects the challenges facing both countries as they attempt to mitigate tensions and balance competition.

Amid souring relations between Beijing and Washington, the issues span a range of areas, from trade disputes and Taiwan’s status to territorial claims in the South China Sea. Raimondo’s visit marks the fourth high-profile trip by a member of President Joe Biden’s administration to China this year.

In her talks with Chinese officials, Raimondo pointed out several issues contributing to the perceived risks for American companies. These include substantial fines with no explanation, revisions to counterespionage laws causing uncertainty, and business raids.

The divergence in perspectives was highlighted during a meeting with Li, where he cautioned against “politicized” trade restrictions imposed by the US administration. He underscored the detrimental effects on bilateral relations, mutual trust, and global economic stability.

While the commercial relationship between the two nations is valued at around $700 billion, tensions have tested their ties. Both sides have expressed a desire to manage competition and avoid a trajectory toward a “new Cold War.” Raimondo reiterated the importance of maintaining the economic relationship with China during her discussions.

To address concerns, the US and China have agreed to establish an “export control enforcement information exchange” platform. Despite efforts to enhance communication, differences persist over market rules, fair competition, and technology trade curbs.

In summary, US Commerce Secretary Gina Raimondo’s visit to China has highlighted concerns from American companies about escalating risks, leading to China being labeled “uninvestable.” Despite both countries seeking to maintain their commercial relationship, challenges remain in navigating their complex interactions.