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Boston Herald
Boston Herald
30 Aug 2023
Associated Press


NextImg:Raimondo: China ‘uninvestable’ without change 

SHANGHAI — Commerce Secretary Gina Raimondo  said she warned Chinese leaders that U.S. businesses might stop investing in their country without prompt action to address complaints about worsening conditions due to raids on firms, unexplained fines and unpredictable official behavior.

Raimondo’s comments Wednesday add to pressure on Chinese leader Xi Jinping’s government, which is trying to revive investor interest and reverse an economic slump. Business groups say confidence among foreign companies is at an all-time low. Official figures show foreign investment plunged in the latest quarter.

Raimondo visited Beijing as part of U.S. efforts to restore relations that plummeted to their lowest level in decades due to disputes about technology, security, Taiwan and other issues.

She called her meetings with China’s No. 2 leader, Premier Li Qiang, and other officials “very productive” but said she “didn’t pull any punches” in conveying business complaints.

Raimondo said CEOs ahead of her trip told her they face increased pressure from Beijing’s expansion of an anti-spying law this year, raids on some firms, tighter controls on data and lack of information about rule changes.

“My point was U.S. business needs to see some action taken to address these issues. Otherwise, they will deem it as just too risky and, as I said, uninvestable,” Raimondo told reporters at a Boeing Co. joint venture in Shanghai’s eastern district of Pudong.

Foreign direct investment in China fell 89% from a year earlier in the three months ending in June, according to official data. Most investment is believed to be brought into the country by Chinese companies disguised as foreign money to get tax breaks and other incentives, but business groups have warned foreign companies are withholding new spending until their status is clearer.

“Patience is wearing thin,” Raimondo said. She said conditions for companies that have complained for years about technology theft and official favoritism toward Chinese competitors are “becoming in some ways even tougher.”

Economic growth slid to 0.8% compared with the previous quarter in the three months ending in June from the January-March period’s 2.2%. That is equal to an annual rate of 3.2%, which would be among China’s weakest in decades.

Despite that, Li, the premier, has expressed confidence the economy can hit the ruling party’s annual growth target of “about 5%.”

Raimondo said she welcomed moves such as the ruling party’s announcement of a 24-point plan to improve conditions for entrepreneurs. She said the party secretary for Shanghai, Chen Jining, told her Wednesday the city was considering creating a hotline to receive business complaints.

“We have to see the situation on the ground match the rhetoric,” Raimondo said.