US Firms Torn Between Business Interests and Risks in China

By Lily Hackett August 30, 2023

US Commerce Secretary urges companies to stay committed to China, despite comments that the Asian nation is becoming “uninvestable”.

US Commerce Secretary Gina Raimondo has advised American firms to remain committed to their business ventures in China, a message conveyed at an American Chamber of Commerce event in Shanghai. This directive comes in light of Raimondo's acknowledgment of claims from US firms describing the Asian giant as “uninvestable”.

Raimondo acknowledged the potentially off-putting conditions for American corporations in China, telling executives, “US businesses need to see some action taken to address these issues, otherwise, they will deem it as too risky and, as I said, uninvestable”. Despite ongoing uncertainties and tensions, Raimondo urged companies to continue their operations in China, noting that many American businesses still consider China to be an important and strategic market for growth.

China's response to allegations of being uninvestable was articulated by foreign ministry spokesperson Wang Wenbin, who remarked, “China remains one of the world’s important investment destinations.” This response echoes sentiments shared by Chinese Premier Li Qiang, who called for the United States to take notable steps to maintain and uphold bilateral ties.

Raimondo’s urging of continued investment in China follows recent tours by key Biden administration officials—including Secretary of State Antony Blinken, Treasury Secretary Janet Yellen, and Climate Envoy John Kerry. Meanwhile, Eric Zheng, president of AmCham Shanghai, noted a prevailing lack of confidence among American firms but maintained that, “most of our members continue to see China as a very important market for them.”

Raimondo is the first US commerce secretary to visit China in half a decade, with part of her agenda focusing on mending communication ties with her Chinese counterparts. Certain steps towards improved cooperation include the formation of a working group for discussions on trade and investment matters and annual in-person meetings with China’s commerce secretary, Wang Wentao.

Even with initiatives to foster cooperation, substantial differences between China and the United States persist. Raimondo attempted to reassure Chinese officials that the United States is not seeking to economically disconnect from China, but progress has been slow regarding resolution of complex trade issues.

Amidst the uncertainty, Raimondo insisted on the need for a predictable regulatory environment for US firms in China, referencing instances of raids on American companies. Nazak Nikakhtar, a former assistant secretary for industry and analysis, cautioned that while promoting US exports to China and protecting US interests might work with other countries, it may not be successful with China.

Ultimately, the road to ameliorating economic relations between China and the United States appears a long one. As Zheng observed, “We will still need to deal with other challenges, so it’s going to take time. I think we’re realistic about that.”