Blinken seeks level playing field for businesses
US Secretary of State Antony Blinken raised concerns about China’s “non-market practices” on the second day of his visit to the country.
In a meeting with Shanghai party chief Chen Jining yesterday morning, Blinken opened by saying: “It’s important to underscore the value – in fact, the necessity – of direct engagement, of sustained engagement, of speaking to each other, laying out our differences which are real, seeking to work through them, and also looking for ways to build cooperation where we can.
“We have an obligation for our people – indeed an obligation to the world – to manage the relationship between our two countries responsibly.”
Blinken’s visit, his second to China in the space of 12 months, comes as Beijing and Washington are stepping up official contacts in an effort to stop relations deteriorating further due to disputes over issues such as trade and Taiwan.
US State Department spokesperson Matthew Miller said after the meeting that Blinken called for a level playing field for American companies while also raising concerns about China’s “non-market economic practices”.
The US has accused China of undermining the interests of American firms through unfair competition and manufacturing “overcapacity”, floating the possibility of placing further tariffs on goods such as electric vehicles and metals to stop them “flooding” the US market.
The commerce ministry yesterday said accusations about overcapacity were “unreasonable”, and warned they could damage business confidence and global green development.
Chen, who is also a member of the Politburo, told Blinken in the meeting that Shanghai was home to more than 8,000 American companies.
Chen said stable relations between the two countries “have not only advanced our cooperation and exchange in all different aspects” but also “help address global challenges and help promote world peace and development”, according to a transcript of his opening remarks by the State Department. “So whether China and the US choose cooperation or confrontation, it affects the well-being of both peoples, both nations and also the future of humanity,” he added.
In a separate statement released by the Shanghai government, Chen said the city would continue to help foreign investors and support cooperation.
“We will always adhere to the direction of marketisation, rule of law and internationalisation, continue to optimise the business environment, provide efficient and convenient services, and support all types of enterprises to continue to develop in Shanghai and achieve win-win development.”
Speaking to students at New York University’s campus in Shanghai later yesterday, Blinken said the relationship between the countries was one of the world’s most consequential and complicated, and he emphasised the importance of communication.
He said more than 100,000 new visas had been granted to Chinese students last year, and that both countries were working to ensure students felt welcome to study in the other country.
Beijing’s ambassador to the US, Xie Feng, in January said more than a dozen Chinese students with valid visas were being denied entry to the US every month after interrogation by immigration officials.
Blinken also met members of the United States business community at the American Chamber of Commerce in Shanghai yesterday afternoon, including Shanghai chamber chairman Allan Gabor and president Eric Zheng.
“US companies in China appreciate the US government’s efforts to continue engaging with China, which will be of great benefit to both sides,” Gabor said in a statement.
Following that meeting Blinken travelled on to Beijing, where he was due to meet academics later in the day.
Today he is expected to meet his Chinese counterpart Wang Yi, and possibly President Xi Jinping as well.
The talks are expected to cover some of the most challenging issues in the bilateral relations, including trade, Taiwan, Ukraine and the Middle East.
China remains on the United States’ “priority watch list” for intellectual property (IP) infringement amid a “slowdown” in Beijing’s pace of reform, Washington has said.
The latest Special 301 Report – issued each year by the Office of the United States Trade Representative (USTR) to assess the adequacy and effectiveness of the country’s trading partners’ IP rights protection – landed as US Secretary of State Antony Blinken started his three-day trip to China.
“In 2023, the pace of reforms in China remained slow,” a senior USTR official said.
“Stakeholders acknowledge some positive developments but continue to raise concerns about implementation of the amended criminal law, copyright law and patent law.”
Other long-standing concerns raised by rights holders included technology transfer, trade secrets, bad faith trademarks, counterfeiting, online piracy and geographical indications, the official said.
The 93-page report, of which the China section comprises 10 pages, said the USTR had been taking actions to address “unfair and harmful Chinese acts, policies, and practices”.
The priority watch list remained unchanged from last year, with Argentina, Chile, India, Indonesia, Russia and Venezuela also continuing to appear.
In addition, 20 other countries were placed on the USTR’s “watch list”, reducing the number by two from last year, after it removed the Dominican Republic and Uzbekistan.
China has been either listed on the priority watch list or identified as a “priority foreign country” for most of the years since the report was first issued in 1989.
This year’s report noted that “statements by Chinese officials that tie IP rights to Chinese market dominance continue to raise strong concerns”, as did the 2022 report.
These included statements from President Xi Jinping on the need for China to allow no delays in breaking through the “chokehold” of critical core technologies, the latest report said.
“Such statements recall long-standing concerns about requiring or pressuring technology transfer from foreign individuals or companies to Chinese companies, as well as about whether IP protection and enforcement will apply fairly to foreign right holders in China,” it said.
Critical concerns also include “the decrease in transparency and the potential for political intervention” with the judicial system, according to the report.
The Supreme People’s Court said in December that Chinese courts were uploading fewer verdicts to China Judgments Online – an online public database which serves as an important resource for lawyers, academics and the public.
The court cited security and privacy concerns and said 19.2 million court rulings were uploaded to the website in 2020, but dropped to 10.4 million in 2022, and just 5.1 million last year.
The move was “further hampering transparency and making it more difficult for right holders to determine how China protects and enforces foreign IP”, the USTR report said.
Although a new database of verdicts was launched in February, the report said there were still concerns over a deterioration in transparency, as the Supreme People’s Court had not clarified the extent to which case decisions would be accessible to the general public or foreign firms.
The report said China continued to be the world’s leading source of counterfeit and pirated goods, based on US customs seizures in the 2023 financial year.
Counterfeit and pirated goods from the mainland and Hong Kong accounted for more than 83 per cent of the value, measured by manufacturers’ suggested retail prices, during the period, according to US Customs and Border Protection.
The USTR said China’s e-commerce markets – the largest in the world – remained a source of widespread counterfeiting as sales of infringing products had migrated from physical to online marketplaces.
Last week, the USTR announced the launch of another Section 301 investigation into China’s maritime, logistics and shipbuilding sectors. This is on top of the 2017 probe that led to the imposition of tariffs on a variety of imported goods from China over the following two years. In retaliation, China imposed additional tariffs on certain US goods.
In 2020, the two reached the first phase of an economic and trade agreement that included a progressive rollback of tariffs as well as a chapter on strengthening protection and enforcement of IP in China.