The Biden administration criticized Beijing for measures it took against American and other foreign companies in China, with a US official saying the actions are worrisome and inconsistent with pledges from Chinese officials to maintain an open business environment.
(Bloomberg) — The Biden administration criticized Beijing for measures it took against American and other foreign companies in China, with a US official saying the actions are worrisome and inconsistent with pledges from Chinese officials to maintain an open business environment.
The official, who asked not to be identified to discuss sensitive information, said the White House is concerned about what appears to be an emerging pattern of Chinese actions targeting US and other foreign companies, which undercuts Beijing’s message that it’s committed to a welcoming environment for overseas investment, an open trading system and rules-based market activity.
The moves just in the past month against foreign firms operating in China are in stark contrast to comments by China’s premier, Li Qiang, who has underscored that the country welcomes foreign investment.
“China will unswervingly stick to opening up, regardless of changes to the global environment,” Li told foreign attendees of the China Development Forum last week. A number of American CEOs, including Apple Inc.’s Tim Cook, traveled to China for the event and celebrated their ties to the second largest economy.
It’s not clear if the Biden administration has raised the issue with its Chinese counterparts. The US official didn’t mention specific Chinese actions or whether the Biden administration has plans to respond with its own measures, but the official said there were a number of recent examples of Chinese behavior that fit the pattern.
Chinese President Xi Jinping last month reiterated the country needs to move away from reliance on other nations for advanced technology, saying the nation was grappling with “comprehensive containment and suppression by western countries led by the US over the past few years.” The US has sought to use export controls in particular to maintain its technological edge over China, with National Security Adviser Jake Sullivan last year saying it was essential to “maintain as large of a lead as possible.”
China similarly sees the US export controls and sanctions against its companies as unfair suppression and inconsistent with open trading systems.
Last week, Beijing opened a new front in the escalating semiconductor battle between the world’s two largest economies when Chinese authorities announced a cybersecurity probe into imports from Micron Technology Inc., the US’s largest memory-chip maker, citing national security reasons.
The Chinese government said in a statement it’s conducting the review to ensure the integrity of its information infrastructure supply chain, prevent network security risks and maintain national security. Micron said in a statement it was in communication with the Cyberspace Administration of China concerning the inquiry and the company is “cooperating fully.”
Last month, China raided New York-based due diligence firm Mintz Group’s office in Beijing and detained five of its Chinese employees. China said that Mintz was “suspected of engaging in unlawful business operations,” without elaborating.
Days later, Chinese authorities detained a staffer of Japanese drugmaker Astellas Pharma Inc. on spying charges.
The Biden administration has long said it needs new tools to address China’s economic coercion. US officials and lawmakers have been developing ideas but have not announced specifics. The US has also discussed the matter with allies and partners.
Japan, which is chairing the Group of Seven this year, has put an emphasis on the issue and is aiming for outcomes by the leaders summit next month, people familiar with the deliberations said.
“Coercion is core to China’s economic model,” said Representative Michael McCaul, the Texas Republican who chairs the House Foreign Affairs Committee. “The US and its allies must stand together against these mafia-like tactics.”
McCaul this week is leading a bipartisan delegation to Asia. The group arrived in Taiwan on Thursday and held meetings with officials in Tokyo and Seoul before that.
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