BANGKOK — Chinese officials warned a delegation of top U.S. executives visiting Beijing this week that higher tariffs on imports from China would hurt their businesses in the country.
A delegation of influential businessmen from the U.S.-China Business Council, including the CEOs of FedEx and Micron, attended a high-level meeting last week where leaders of the ruling Communist Party endorsed a policy blueprint that included promises to improve the business environment for foreign investors. But they also vowed to be more vigilant in protecting state secrets, a potential minefield for foreign businesses facing heightened scrutiny of their operations in China by authorities.
Both the US and China have cited national security concerns in imposing restrictions on trade and investment, and American businesses have sometimes been caught in the middle. Beijing has balked at Washington’s moves to raise tariffs on Chinese-made goods and limit China’s access to advanced technology, including advanced computer chips used in artificial intelligence.
President Joe Biden’s administration has sought to improve relations with China, including several meetings between Biden and Chinese President Xi Jinping, but has largely kept in place sanctions ordered by former President Donald Trump, who imposed punitive tariffs on Beijing.
The Treasury Department has also proposed rules that would limit and monitor U.S. investment in China for artificial intelligence, computer chips and quantum computing.
In his meeting with the group, Chinese Commerce Minister Wang Wentao stressed that U.S. investment restrictions on China would “severely affect the investment and operations of American companies in China,” the ministry said in a statement. It did not provide further details.
The U.S.-China Business Council is a nonpartisan private group of more than 270 American companies doing business in China. It said the visit to Beijing, days after a four-day Communist Party planning meeting, was intended to advance economic and policy priorities and support dialogue between U.S. and Chinese governments and business leaders.
“We appreciate the opportunity to engage with Chinese leaders to promote commercial relationships and advocate for our priorities for the benefit of our company and our employees,” FedEx chairman and CEO Raj Subramaniam said in a statement.
Others present at the meeting were Craig Allen, board president; Brendan Nelson, president of Boeing Global; Amit Sevak, president and CEO of Educational Testing Services; and Roberta Lipson, CEO of health care company Chindex International, which operates private hospitals in China and Mongolia.
Allen said the group hoped to build on past opportunities to “create a more stable, fair and predictable business environment in China, address old and new barriers to the Chinese market” and to enhance ties between the two largest economies.
Foreign Minister Wang Yi told the group he hoped they would use their influence and connections to paint an “accurate” picture of China and provide an objective and positive voice to advocate “a correct understanding of China,” the official Xinhua News Agency said.
As the first US business group to visit after the party planning meeting, “you can feel the new atmosphere of China’s reform deepening in an all-round way,” the news agency quoted Wang as saying.
At a Communist Party meeting last week, officials approved more than 300 reform measures in line with leader Xi Jinping’s vision to strengthen China’s role as an economic power and a leader in advanced technology.
That includes broad promises to foster a “first-class business environment,” remove market restrictions and promote trade. But leaders also pledged to expand the party’s role in business and strengthen protections for national security.
A decree approved Monday lays out regulations to implement a revised state secrets law that took effect on Sept. 1. Among other things, the law tightens vetting of people working with state secrets and bars them from traveling abroad without prior approval, even after they leave their jobs, state media reported.
The Chinese government says such laws target only a small number of people who endanger national security. But foreign business groups have expressed concern about authorities’ crackdown on foreign businesses in China and tightening restrictions on data handling.
The new regulations have created uncertainty and concern among businesses that need to know where the “red lines” are, Sean Stein of the American Chamber of Commerce in China told reporters at a recent briefing.
“Companies don’t want to jeopardize China’s national security, but they need to know whether they’re investing, who they’re investing with,” Stein said. So, “without the ability to collect that information, not knowing whether it’s not going to violate China’s state secrets laws is a real problem.”
