Space for talks too narrow on high-tech issues: Expert

Amid US unease over China's advances, San Francisco summit gives ties a push

Despite its claims to the contrary, the United States is still choosing to decouple with China in high-technology sectors and frontier industries, a US expert said in an interview with China Daily.

"There is space for negotiation in this area, but the space is a very narrow, small one," said Sourabh Gupta, a senior fellow at the Institute for China-America Studies in Washington.

One reason is that the US is not feeling "that degree of vulnerability like it was on the fentanyl issue in the economic and trade issue", he said.

On Nov 16, the US removed the Chinese Ministry of Public Security's Evidence Identification Center from the trade sanctions list, which was widely interpreted as an important step to promote cooperation with China on the fentanyl issue.

"Regardless of whether there has been any change in what the Chinese side used to do, it is in their own interest to take the Chinese entity off their entity's list," Gupta said. "And they did that so that they could get cooperation on fentanyl.

"But because I don't see that degree of vulnerability like it was on the fentanyl issue ... That's why I see, at this point, there's really not so much that the US side is willing to negotiate. At most, they are willing to be more transparent about how they do some of their sanctions, export controls and tech denials."

The second reason, he said, is the US is uneasy about how fast China advances in technology.

Since 2019, the US has been blocking the sale of some cutting-edge technology to Huawei, a Chinese technology giant. It has also imposed sweeping export controls on Huawei and other Chinese technology companies for advanced chips and chip manufacturing equipment.

In August, Huawei launched the Mate 60 series cellphones using the 7-nanometer chip Kirin 9000S processor, which shocked the US and triggered an investigation by the US Department of Commerce.

Earlier this month, Huawei released a new laptop equipped with the Kirin 9006C processor, which is said to have a more advanced 5-nanometer chip.

US Commerce Secretary Gina Raimondo said Huawei's advanced processor is "deeply concerning "and vowed to take the "strongest action possible" in response to this kind of semiconductor chipmaking breakthrough in China.

"China is making technological progress at a very fast pace," Gupta said. "And we saw that with the Huawei phone.

"Part of the reason Raimondo has got very flustered by this is that she's seeing the pace at which technological breakthroughs are happening in China. And therefore, the US just needs to keep doing more and more and more in terms of denials. And that's why that conversation is going off the rails in that direction.

"So, the US feels a certain degree of vulnerability and needs to not shift from its game. It needs to double down in that game of tech denials."

There are certain areas where the US and China "disagree and disagree very strongly" with each other, Gupta said, including the export controls targeting China and the strong tone in Raimondo's statements on the tariffs.

"There's been no communication frankly, between USTR (The United States Trade Representative) and the Chinese side, because the US doesn't want to move on that front."

'A good year'

Gupta characterized the past year as "a good year" for the US-China relationship.

"We have to look at the year as the year which started literally from the Bali meeting in November 2022, where the two sides had the consensus that they need to stabilize relationships and have guardrails," he said, referencing the face-to-face meeting between Chinese President Xi Jinping and his US counterpart Joe Biden in Indonesia, on the sidelines of the G20 Summit.

The balloon incident earlier this year sent the bilateral relations backward for about three months, Gupta said, but the consensus in Bali was strong enough for the two sides to continue working toward stabilizing the relationship.

And the Biden-Xi summit in San Francisco in November 2023 has "small but real" outcomes, he said.

"The value of that is that it has created a certain momentum in the bilateral relationship going forward with the working groups. So that momentum right now is pushing the relationship forward."

The relationship in certain areas moved faster than in other areas, he said. For example, the US and China worked on bilateral issues and even global multilateral issues on the financial track, and the people-to-people track continues to move forward.

In the meantime, the military track was comparatively slow. On Thursday, top military officials of the two countries spoke for the first time in more than a year, and much more needs to be discussed between the two sides in the future.

"US-China relations will remain conflicted in that way for quite a long period of time," Gupta said. "Going forward, we'll see good elements to it; we'll see negative elements to it."

The US government frames the bilateral relationship in competitive terms while China believes the framework must be cooperative, within which the two sides can compete, he said, adding that the two framings are "irreconcilable".

"But because the relationship has moved so far forward in the past 12 months, the hope and the expectations are that even if it doesn't move forward, it can be in a holding pattern and that it can troubleshoot any difficulties that might arise in 2024," Gupta said.

"And I think that should be good enough for the relationship going forward at this point of time."