Envoy: Decoupling 'biggest risk' to US-China ties

As China and the United States looked to stabilize their relations recently through a series of high-level exchanges, a top Chinese envoy called for removing disruptive "decoupling" and taking concrete steps to get the relationship back on the right track.

Chinese Ambassador to the US Xie Feng, speaking on US-China relations at the fifth US-China Business Forum held by Forbes on Tuesday, said the biggest risk is any decoupling between the two countries, and the largest source of insecurity comes from any confrontation between them.

Taking trade and investment as examples, Xie expressed both empathy and bewilderment at the ongoing decoupling practice.

In the first half of 2023, China-US trade fell by 14.5 percent over last year, which is a direct consequence of US moves to levy Section 301 tariffs on Chinese imports, "abuse" unilateral sanctions, and further tighten up export controls, according to the ambassador.

"Livelihoods of many families have been affected, and businesses from both countries have borne the brunt," Xie said via video link.

The envoy said it is "simply confusing" that the United States, which repeatedly urged China to expand access for foreign investment in the past, is now imposing restrictions itself.

The latest move was an executive order signed by US President Joe Biden on Aug 9 to restrict critical technology investments in China.

Xie said that order is a violation of the principle of free trade, and instead of containing China, it will only curtail the right of American businesses to develop in China.

Equally confusing is that the United States called on China to level the playing field before, but now it is depriving Chinese businesses of the right to compete.

That includes putting more than 1,300 Chinese entities and personnel on US sanction lists, according to Xie.

"Average US tariffs on Chinese products are at 19 percent, while China's tariffs on American goods are only 7.3 percent on average. Is this fair? Does this truly serve US interests?" Xie said.

The envoy noted that in the past five years, the return rate of FDI in China reached 9.1 percent, and that in the first half of this year, 24,000 foreign-invested firms were established in China, and investment from France, the UK and Japan in the same period went up 173 percent, 135 percent and 53 percent, respectively.

"To shut out China is to close the door on opportunities, cooperation, stability and development," he said.

Xie said that over the past few years, China-US relations ran into serious difficulties, which do not serve the fundamental interests of the two peoples nor meet the common expectation of the international community.

"We need to find a path for China and the United States to get along in the new era," he said. "We need to find a path for expanding mutually beneficial economic cooperation and trade between China and the United States."

There have been a series of high-level interactions between the two countries, including US Commerce Secretary Gina Raimondo's four-day trip to China that ended on Wednesday.

The two sides have agreed to return to the agenda that was set by Chinese President Xi Jinping and the US president during their first meeting in Bali, Indonesia, last November, and jointly sent a signal of enhancing dialogue, exchanges and cooperation to stabilize the bilateral relationship, Xie said.

As the world's two largest economies and permanent members of the United Nations Security Council, any conflict or confrontation between them would produce no winner, but only spell disaster for the world.

"The only right choice for us is to combat global challenges together and provide more peace and development dividends to the world," Xie said.

Xie also said that spreading doom and gloom about others will not make oneself any better, adding that when China fares well, the world will also be better off.

He did not specify what the gloomy outlook looks like. There have recently been Western media reports and analyses that said China's economy is struggling.

Xie said that the post-COVID economic recovery will be characterized by undulating progress with twists and turns sometimes, but it is important to see both the trees and the wood, both the present and the long run.

According to China's National Bureau of Statistics, the country's economy grew by 5.5 percent in the first half of the year, which is faster than the 3 percent growth rate last year and outperforming major developed economies.

China has the most complete industrial system, a market with the most dynamic domestic demand, and high-caliber workers and entrepreneurs, with a middle-income population surpassing 400 million.

"There is ample room in our policy toolkit. The fundamentals sustaining China's long-term growth remain unchanged," he said.

The ambassador noted that there has been "heartening progress" in facilitating travels and people-to-people exchanges in recent months.

For example, China has resumed group tours to the US, and the two sides have agreed to increase passenger flights.

"Going forward, we need to continue taking concrete steps, no matter how small they may look," he said. "We can explore more tangible cooperation outcomes and inject more positive energy into bilateral relations."

Such steps would include the US side adjusting its China travel advisory, and for the two countries to renew the agreement on cooperation in science and technology; hold the Tourism Leadership Summit; and facilitate visa applications and border entry for each other's citizens.