US Markets
Monday, August 28th, 2023 8:56 am EDT
U.S. Secretary of Commerce Gina Raimondo is set to meet with senior Chinese officials and U.S. business leaders in Beijing as the two countries continue high-level talks.
Her trip is a crucial but also a tough one to tread with U.S.-China economic ties hanging in the balance, according to a former senior U.S. diplomat.
“Gina Raimondo’s trip is going to be a tricky one, because she is going to have to talk to the Chinese about their concerns about the U.S. trying to contain the Chinese economy and throttle their development,” Susan Thornton told CNBC’s “Squawk Box Asia.”
Thornton previously served as acting assistant secretary for East Asian and Pacific Affairs at the State Department. She said Raimondo would want to “get some business done for U.S. businesses,” on top of promoting and stabilizing trade relations with China.
“So it’s a tough visit. But I think it’s one that the Chinese are welcoming and want to see some positive statements come out of,” said Thornton, who is now a senior fellow at the Paul Tsai China Center at Yale Law School.
Raimondo arrived in Beijing on Sunday night, beginning a visit which came at the invitation of her counterpart, Chinese Minister of Commerce Wang Wentao.
In an opening statement, Wang said China is ready to work together to “foster a more favorable policy environment” for U.S. and Chinese businesses.
Items on Raimondo’s agenda likely include improving tourism, export controls and cross-border data flows, Thornton said.
According to the U.S. Travel Association, China was the largest source of overseas travelers to the U.S. in 2019 and outbound travel this year from China to the U.S. has only recovered to 30% of the levels seen in 2019.
When asked whether tariffs imposed by former President Donald Trump could be reversed, Thornton said: “I don’t think that that’s going to be happening as a result of this trip.”
The Chinese economy is in “much more difficulty” than what people this time last year estimated, she said.
“I think the U.S. at the same time also sees dangers from the faltering Chinese economy, which will have global repercussions but certainly also for the U.S. economy,”
China recently reported second-quarter gross domestic product below expectations, as well as record high youth unemployment before suspending the breakdown of the overall figures.
“It’s in our interest as well to try to stabilize the trading relationship between the two biggest economic powers in the world,” said Thornton.
—CNBC’s Evelyn Cheng contributed to this report.
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