Secretary Raimondo Goes to China

Commerce Secretary Gina Raimondo’s trip to China last week was the fourth one by a senior Biden administration official this year. She followed Secretaries of State and Treasury Antony Blinken and Janet Yellen and Special Climate Envoy John Kerry. The fact that these trips happened at all is noteworthy, given the sour state of bilateral relations, and many observers would say that the most important thing about them was simply the fact that they took place with no apparent screaming or yelling or throwing of shoes.

In some ways, the Raimondo trip was the most interesting and may ultimately prove to be the most important. Tangible accomplishments were few and far between on all the visits, but the Raimondo list is a bit longer than the others. It was also clear that the Chinese wanted her to show up, making clear publicly shortly after the president issued his executive order on outbound investment that she would nonetheless be welcome. I had thought the trip might be postponed in light of the executive order, but it became apparent that Raimondo had more leverage than her counterparts in the administration because her portfolio includes things the Chinese actually wanted to talk about—U.S. companies doing more business in China, increasing U.S. investment in China, and export controls.

So, while she no doubt spent a good bit of time playing defense—explaining the new U.S. outbound investment policy and defending the export controls announced last October—she also had a rare opportunity to speak directly to senior Chinese officials, including Premier Li Qiang, on the issues that are holding back more U.S. trade and investment. It seems clear she took advantage of the opportunity and didn’t mince words, although she did use the familiar politicians’ tactic of blaming others for the bad news she was imparting. In this case, she reported what she was hearing from the U.S. business community about the difficulties of investing in China and the discriminatory treatment their facilities there have received. This is the classic “don’t shoot the messenger” strategy.

In essence, the Chinese government is sending two different messages. The officials with commerce and trade portfolios are busy saying Americans are welcome in China, along with their money. Meanwhile, the Ministry of State Security is busy enforcing China’s new ambiguous national security law, raiding foreign companies’ offices and refusing to let their executives leave the country. U.S. business executives learned a long time ago, however, to watch what they do and not what they say, and Secretary Raimondo made that point very clearly.

The secretary has a well-earned reputation for focusing on deliverables. In that regard, it does not appear she got very much, but she did better than her counterparts, who mostly settled for happy talk. A major tangible accomplishment she wanted was restarting shipments of the Boeing 737 MAX, but that apparently didn’t happen—yet. She did, however, get what was at the top of her list—an agreement to hold a continuing dialogue on commercial issues which would meet twice a year at the vice-ministerial level. She paid for that by agreeing to a second dialogue, on export controls, also to be held twice a year at a lower level. She promptly made clear the latter process would not be a negotiation but simply an opportunity for the United States to explain its export controls and clear up any misunderstandings.

These dialogues, particularly the second, will be criticized by the China hawks who seem to regard any conversation as tantamount to surrender. In fact, this is classic diplomacy—using talk to increase mutual understanding and perhaps to find areas of agreement. Maybe we will find some; maybe we won’t, but talking is always better than fighting. In the case of the commercial dialogue, it is also not new. Most recent presidents established a similar procedure, each of them giving it a new name—the Joint Commission on Commerce and Trade (JCCT), the Strategic Economic Dialogue, and the Strategic and Economic Dialogue.

I took part in JCCT meetings during the Clinton administration and watched them evolve over time into something quite useful on a micro level. They became essentially a Festivus-like “airing of grievances,” where companies—in both countries—could bring complaints about the other’s behavior, and sometimes something would actually happen. For China, if the complaint was about a local or provincial official’s action, it would not be hard for the national government to step in and set things right, reaffirming its control over the provinces in the process. The meetings did not produce major changes in macroeconomic policy by either country, but they did succeed in solving some micro problems while maintaining an open dialogue on the larger issues that divide the two countries.

Secretary Raimondo characterized the new dialogue as a beginning. Strictly speaking, it’s more of a restart, but her basic point was correct. It’s a baby step but an important one in reestablishing a more civil relationship and a feather in her cap for accomplishing what her colleagues could not. If it is managed adroitly with sustained high-level attention, it may lead to restarting more of our previous dialogues, including one between our two militaries. The United States has been particularly anxious to resurrect that in order to diminish the risk of an incident in the air or on sea escalating into a serious conflict. Even if it does not lead to that, however, the commercial dialogue can be an important step in keeping the bilateral relationship open and civil. Its critics should think twice before complaining about something that has no downside and some potential, albeit small, upsides.

William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.