US' decoupling biggest risk, ambassador says

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

Chinese Ambassador to the US Xie Feng, speaking on China-US 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 continuing practice of decoupling.

In the first half of this year, 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, the ambassador said.

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

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

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

The order is a violation of the principle of free trade, Xie said. Instead of containing China, it will only curtail the right of US businesses to develop in China, he said.

Equally confusing is that the US 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, Xie said.

"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.

In the past five years, the rate of returns on foreign direct investment in China has reached 9.1 percent, Xie said. In the first half of this year, 24,000 foreign-invested companies were established in China, and investment from France, the United Kingdom 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.

Over the past few years, China-US relations have run into serious difficulties, Xie said, and this situation does not serve the fundamental interests of the two peoples, nor does it meet the common expectations of the international community.

Path in the new era

"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 a four-day trip to China by US Commerce Secretary Gina Raimondo, which concluded on Wednesday.

The two sides have agreed to return to the agenda set by Chinese President Xi Jinping and President Biden during their meeting in Bali, Indonesia, in November, and jointly sent a signal for enhancing dialogue, exchanges and cooperation to stabilize bilateral ties, 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.

Spreading doom and gloom about others will not make oneself any better, Xie said, adding that when China fares well, the world will also be better off. He did not specify what the gloomy outlook looks like.

Recently, narratives and analyses from Western media have emerged, suggesting that the Chinese economy is struggling.

Xie said the post-pandemic economic recovery will be characterized by progress with twists and turns sometimes, but it is important to see both the trees and the wood, both in the present and in 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, faster than last year's 3-percent rate 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 tool kit," Xie said. "The fundamentals sustaining China's long-term growth remain unchanged."

There has been "heartening progress" in facilitating travel and people-to-people exchanges in recent months, the ambassador noted. 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. We can explore more tangible cooperation outcomes and inject more positive energy into bilateral relations," he said.