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China Officials Warn on Higher Tariffs 07/24 06:12


   BANGKOK (AP) -- Chinese officials warned a delegation of top U.S. executives 
visiting Beijing this week that higher tariffs on imports from China will harm 
their businesses inside the country.

   The delegation of influential business people belonging to the U.S. China 
Business Council, including the CEOs of FedEx and Micron, followed a top-level 
meeting last week where ruling Communist Party leaders endorsed a blueprint for 
policies that included numerous pledges to improve the business environment for 
foreign investors. But they also vowed greater vigilance in protecting state 
secrets, a potential minefield for foreign businesses that face intense 
scrutiny of their China operations by authorities.

   Both the U.S. and China have cited national security concerns in imposing 
restrictions on trade and investment, and American businesses have at times 
been caught in the middle. Beijing has objected strenuously to Washington's 
moves to hike tariffs on Chinese-made products and limit Chinese access to 
advanced technologies, including leading-edge computer chips used for 
artificial intelligence.

   The administration of President Joe Biden has sought to improve ties with 
China, including several meetings between Biden and Chinese President Xi 
Jinping, but has largely left in place sanctions ordered by former President 
Donald Trump, who imposed punitive tariffs on Beijing.

   The Treasury Department also has proposed a rule that would restrict and 
monitor U.S. investments in China for artificial intelligence, computer chips 
and quantum computing.

   In his meeting with the group, Chinese Commerce Minister Wang Wentao 
emphasized that U.S. investment restrictions on China will "seriously affect 
the investments and operations of American companies in China," the ministry 
said in a statement. It provided no details.

   The U.S. China Business Council is a private, nonpartisan group of more than 
270 American companies that do business in China. It said the visit to Beijing, 
just days after the Communist Party's four-day planning meeting, was intended 
to advance economic and policy priorities and support dialogue between U.S. and 
Chinese government and business leaders.

   "We appreciate the opportunity to engage with Chinese leaders to promote 
commercial relations and advocate our priorities for the benefit of our 
companies and employees," the council's chairman and FedEx CEO Raj Subramaniam 
said in a statement.

   Among others attending the meeting were Craig Allen, president of the 
council; Brendan Nelson, president of Boeing Global, Amit Sevak, president and 
CEO of Educational Testing Service, and Roberta Lipson, CEO of healthcare 
company Chindex International, which operates private hospitals in China and 

   Allen said the group hoped to build on past opportunities to "realize a more 
stable, fair and predictable business environment in China, address 
longstanding and new barriers to China's market" and to improve the 
relationship between the two largest economies.

   Foreign Minister Wang Yi told the group he hoped they would use their 
influence and connections to provide an "accurate" picture of China and provide 
objective and positive voices to advocate for a "correct understanding of 
China," the official Xinhua News Agency said.

   As the first U.S. business group to visit after the party's planning 
meetings, "you can feel the new atmosphere of China's further deepening reform 
in an all-round way," the agency cited Wang as saying.

   At the Communist Party meetings last week, officials endorsed more than 300 
reform measures in line with leader Xi Jinping's vision for strengthening 
China's role as an economic power and leader in advanced technologies.

   That included broad pledges to foster a "first-rate business environment," 
remove market restrictions and promote trade. But the leaders also vowed to 
expand the party's role in business and to strengthen safeguards for national 

   A decree was approved Monday that provides regulations to implement a 
revised state secrets law that takes effect on Sept. 1. Among other things, it 
toughens screening of people working with state secrets and bans them from 
traveling outside the country without approval in advance, even after they 
leave their jobs, state media reported.

   The Chinese government has said such laws only target a small number of 
people who endanger national security. But foreign business groups have 
expressed unease over raids by authorities on foreign businesses in China and 
tightening restrictions on the handling of data.

   Various new regulations have generated 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 in a recent briefing.

   "Companies don't want to endanger China's national security, but they need 
to know if they're making an investment, who they're investing with," Stein 
said. So "without the ability to collect that information, not knowing if it's 
not going to run afoul of China's state secrets laws is a real problem."

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