China vice-president urges US firms to find new areas to team up

China’s vice-president urged businesses from the world’s two largest economies to boost cooperation and safeguard global supply chains, as Beijing and Washington try to work through their differences.

Chinese and American enterprises should “maintain the stability and smooth flow of global industrial and supply chains”, Han Zheng said at a dinner on Friday (Mar 1) hosted by the American Chamber of Commerce (AmCham) in China. 

He told business representatives and officials from the two countries to explore new areas of cooperation in digital, artificial intelligence and green fields to “increase the size of the cake”.

The US and China have been working to stabilise ties after President Joe Biden met Chinese counterpart Xi Jinping in November, leading to a resumption of communications between the two militaries and the launch of working groups on economic and financial issues.

Even as relations improve, the two sides are pursuing strategies to increase self-reliance.

“Both of us are derisking,” Nicholas Burns, US ambassador to China, said in a speech at the AmCham event, pointing to US efforts to diversify supply chains and Beijing’s limits on exports of core technology. 

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Burns also highlighted China’s manufacturing overcapacity, US sanctions on Chinese firms, and cybersecurity risks posed by some types of Chinese cars as among difficult issues the two countries will need to confront.  

There have been attempts to increase engagement at various levels. US Chamber of Commerce chief executive Suzanne Clark this week led a group of former US government officials to Beijing for meetings with business executives and officials, including Chinese Premier Li Qiang. The last visit by a US Chamber chief executive was nearly six years ago in 2018, according to the business lobby group. 

Chinese ministries have been increasing their outreach to the overseas business community, especially after foreign direct investment flows hit record lows last year on concerns over China’s long-term growth prospects and as geopolitical tensions rise. 

China’s Ministry of Commerce pledged to hold a roundtable meeting with foreign companies every month to hear and address their concerns, and said earlier this year that nearly two-thirds of the government’s 24-point plan to improve the foreign business environment had been implemented or seen progress. 

Sean Stein, chairman of AmCham China, said several firms have seen major issues resolved in recent months. 

“The Chinese side are really trying to demonstrate their commitment to reform and addressing concerns,” he told Bloomberg on Friday. “However, there are many important areas where companies are still waiting for more progress such as the data security law.” BLOOMBERG