How the US is dealing with China’s economic hardships

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U.S. Commerce Secretary Gina Raimondo focused on managing trade issues between the two countries during …
  • U.S. Commerce Secretary Gina Raimondo focused on managing trade issues between the two countries during her four-day visit to China. Following her meeting with her Chinese counterpart Wang Wentao, Raimondo announced the creation of a joint forum to reduce tension. She emphasized that the Biden administration would not compromise on national security by advocating for restrictions on chip exports. Raimondo's visit marked the first by a U.S. Commerce Secretary to China in five years and followed visits by Secretary of State Blinken in June and Treasury Secretary Janet Yellen in July. It is clear that the Biden administration is continuing its economic struggle with China while attempting to reduce rising tensions to safeguard American economic interests and capital in the country.
  • The intense global economic rivalry between the US and China is leading to a fierce competition, particularly in the advanced technology sector. While Washington imposes measures to limit the export of high-tech products to China, Beijing is not sitting idle. A recent example is Intel, the giant US computer chip producer, retracting its decision to acquire Israel's semiconductor chip manufacturer, Tower Semiconductor. Intel had initially planned to acquire Tower to remain competitive in chip manufacturing and had obtained approval from American authorities. However, after waiting for 18 months without approval from Chinese authorities, Intel was forced to announce the cancellation of the acquisition. Intel, which generates 27% of its global revenues from China, avoiding jeopardizing this relationship, demonstrates how complex the economic battle between the US and China has become.
  • The Biden administration is struggling to formulate a comprehensive and effective China policy. While the Trump era saw constant pressure on China, attempting to limit its sphere of influence, the Biden administration embarked on a path of both competition and cooperation. Despite a general consensus across both parties about the need for the United States to contend with China, it is evident that crafting a concrete and effective China policy remains challenging. The planned visit of Secretary of State Blinken to China in February, expected to ease the escalating tensions and establish a "constructive" framework, was postponed due to the strain caused by the "spy balloon" incident, further highlighting the fragility and lack of trust in the relationship. However, there is no indication of any tangible outcome achieved during Blinken's visit.

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