Blinken Visits China - State Council on Business Environment - NPCSC Session Concludes
I. Blinken’s China Visit
The lead story in the People’s Daily today is about Xi Jinping’s meeting with US Secretary of State Antony Blinken. The Chinese readout says that Xi told Blinken that over the ups and downs of history, the two sides had learned some lessons:
“China and the United States should be partners rather than rivals; help each other succeed rather than hurt each other; seek common ground and reserve differences rather than engage in vicious competition; and honor words with actions rather than say one thing but do another. He proposed mutual respect, peaceful coexistence and win-win cooperation as the three overarching principles for the relationship.”
Referencing his recent call with Biden, Xi reiterated that “the two sides should value peace, prioritize stability, and uphold credibility. ‘The finer details will fall into place when they are aligned with the bigger picture’...”
He added: “We live in an interdependent world and rise and fall together. With their interests deeply intertwined, all countries need to build maximum consensus for win-win and all-win outcomes. This is the basic starting point for China to view the world and the China-U.S. relationship. President Xi underlined his view that major countries should behave in a manner befitting their status and act with broad-mindedness and a sense of responsibility. China and the United States should set an example in this regard, undertake responsibilities for world peace, create opportunities for the development of all countries, provide the world with public goods, and play a positive role in promoting global unity.”
“President Xi Jinping underscored that in his meeting with President Biden in San Francisco, he proposed five pillars for China-U.S. relations, namely, jointly developing a right perception, jointly managing disagreements effectively, jointly advancing mutually beneficial cooperation, jointly shouldering responsibilities as major countries, and jointly promoting people-to-people exchanges. They should serve as the underpinning for the mansion of China-U.S relations. When the overarching principles are established, specific issues will become easier to address. China is willing to cooperate, but cooperation should be a two-way street. China is not afraid of competition, but competition should be about progressing together instead of playing a zero-sum game. China is committed to non-alliance, and the U.S. should not create small blocs. While each side can have its friends and partners, it should not target, oppose or harm the other. China welcomes a confident, open, prosperous and thriving United States, and hopes the United States will also look at China’s development in a positive light.”
Another interesting quote is Xi saying that “no progress means regress” was an idiom that applied to China-US ties. I guess this signals a sense of frustration with US policy.
Prior to meeting Xi, Blinken met with Wang Yi. The Chinese readout calls the talks “candid, substantive and constructive.”
It has Wang telling Blinken that while ties have “generally stabilized”, “negative factors are still growing and accumulating.” He called on both sides to implement the San Francisco Vision “to the letter.” Wang said that the two sides need to answer the “fundamental question on their relationship, which is whether China and the United States should be partners or rivals.” This is the “first button” that “must be put right”. “If the United States constantly regards China as its main rival, China-U.S. relations are bound to remain fraught with troubles and problems”.
“The Taiwan question is the ‘first red line’ that must not be crossed in China-U.S. relations. China demands that the United States should faithfully abide by the one-China principle and the three China-U.S. joint communiques, refrain from sending wrong signals to the ‘Taiwan independence’ separatists in any way, and act on U.S. President Joe Biden's commitment of not supporting ‘Taiwan independence’, not supporting ‘two Chinas’ or ‘one China, one Taiwan’, and not seeking to use the Taiwan question as a tool to contain China. China also demands that the United States should stop arming Taiwan, and support China’s peaceful reunification.” 王毅强调，台湾问题是中美关系第一条不可逾越的红线。中方要求美方不折不扣恪守一个中国原则和中美三个联合公报，不得以任何方式向“台独”分裂势力发出错误信号，切实兑现拜登总统不支持“台独”、不支持“两个中国”“一中一台”、不将台湾作为工具遏制中国等承诺，停止武装台湾，支持中国和平统一.
In the next paragraph, Wang told Blinken that the US “has taken endless measures to suppress China’s economy, trade as well as science and technology.” He said that “this is not fair competition but containment, not de-risking but creating risks.” “The United States should implement its statement that it does not seek to contain China's economic development, does not seek to ‘decouple’ from China, and does not intend to halt China's scientific and technological progress.” To this end, Wang wants the “false narrative of ‘overcapacity’” to not be “hyped up”; he wants removal of the “illegal sanctions on Chinese companies” and an end to “301 tariffs that violate WTO rules”. 王毅指出，中国人民的发展权利不可剥夺。美国针对中国的经贸科技打压措施层出不穷，这不是公平竞争，而是遏制围堵，不是去风险，而是制造风险。美方应该将不寻求遏制中国经济发展，不寻求同中国“脱钩”，无意阻止中国科技进步的表态落到实处，停止炒作“中国产能过剩论”的虚假叙事，撤销对中国企业的非法制裁，停止加征违反世贸组织规则的301关税.
On the Asia-Pacific, Wang called on the US to not establish “exclusive small groupings, refrain from pressuring regional countries to take sides, stop deploying land-based intermediate-range missiles, stop undermining China's strategic security interests and stop undermining the hard-won peace and stability in the region.” 王毅强调，亚太地区不应该成为大国角斗场。希望美方作出正确抉择，与中方相向而行，在亚太实现良性互动，放弃搞排斥对方的小圈子，不要胁迫地区国家选边站队，停止部署陆基中导，停止损害中国战略安全利益，停止破坏地区来之不易的和平稳定.
Another report from MoFA says that following the talks, the two sides reached a five-point consensus. Xinhua reports:
First, both to speed up the implementation of the important consensus reached by the two heads of state in San Francisco.
Second, both sides agreed to maintain high-level exchanges and contacts at all levels. They will continue to allow the restored and newly established consultation mechanisms to play their role in the fields of diplomacy, economy, finance and commerce, continue to carry out exchanges between the two militaries, and further promote China-U.S. cooperation on drug control, climate change and artificial intelligence.
Third, the two sides announced that they would hold the first meeting of the China-U.S. intergovernmental dialogue on artificial intelligence, continue to advance consultations on the principles guiding China-U.S. relations, hold a new round of China-U.S. consultations on Asia-Pacific affairs and China-U.S. maritime affairs, and continue consular consultations. The anti-drug working group of the two countries will hold a senior officials meeting. The United States welcomes China's special envoy for climate change Liu Zhenmin to visit the United States.
Fourth, the two sides will take measures to expand cultural and people-to-people exchanges.
Fifth, the two sides will maintain consultations on international and regional hotspot issues and strengthen communication between the special envoys of the two sides.
Finally, Blinken also met with Minister of Public Security Wang Xiaohong. The brief Chinese readout says that the “U.S. side should take practical steps to resolve issues including unjustifiable harassment, interrogation and deportation of Chinese students, smearing of China's normal international law enforcement cooperation, and the setting up of barriers hampering people-to-people exchanges.”
The State Department has put all the readouts related to the visit on one page. The readout on the meeting with Wang Yi says:
“The two sides had in-depth, substantive, and constructive discussions about areas of difference as well as areas of cooperation as part of responsibly managing competition between the United States and the PRC. The Secretary discussed concerns about PRC support to the Russian defense industrial base, the importance of maintaining peace and stability in the Taiwan Strait, PRC activities in the South China Sea, and the need to avoid further escalation in the Middle East and on the Korean Peninsula. Following up on the Woodside Summit between President Biden and President Xi last November, the Secretary and Director Wang discussed next steps on a range of commitments made by the two leaders on advancing cooperation on counternarcotics, military-to-military communication, talks on artificial intelligence risks and safety, and facilitating people-to-people exchanges. The Secretary emphasized that the U.S. will continue to stand up for our interests and values and those of our allies and partners, including on human rights and economic issues.”
The readout on the meeting with Wang Xiaohong says:
“They reviewed implementation of commitments made by the two leaders at the Woodside Summit in November 2023, including progress on bilateral cooperation to combat global illicit drug manufacturing and trafficking. The Secretary stressed the need for continued, sustained, and increased progress on counternarcotics cooperation. The Secretary raised a range of concerns regarding PRC human rights issues, both within and beyond the PRC’s borders. The two sides reaffirmed the importance of maintaining open channels of communication to responsibly manage competition and to discuss key issues in the relationship.”
Let’s look at Blinken’s press engagement after the meetings. Some key points:
He talked about the counter-narcotics working group and said: “Thanks in large part to the working group’s efforts, China is providing information to international law enforcement that can be used to track and intercept illicit drugs and their precursors, and our two governments recently agreed to share best practices on closing loopholes in our financial systems that the drug traffickers and other criminal enterprises use to launder money…In my discussions, I underscored the importance of the PRC taking additional action, in particular by prosecuting those who are selling chemicals and equipment used to make fentanyl, meeting its international commitments to regulate all of the precursors that are controlled by the UN Commission on Narcotic Drugs, and disrupting illicit financing networks.”
“There are fewer than 900 Americans studying here in China, and that’s a significant drop from a decade ago when we had about 15,000 Americans studying here. President Xi said that he wants to significantly increase the number of Americans studying here in the coming years, and that’s something that we support…What I told my PRC counterparts on this visit is if they want to attract more Americans here to China, particularly students, the best way to do that is to create the conditions that allow learning to flourish anywhere – a free and open discussion of ideas, access to a wide range of information, ease of travel, confidence in the safety, security, and privacy of the participants.”
“In my discussions today, I reiterated our serious concern about the PRC providing components that are powering Russia’s brutal war of aggression against Ukraine. China is the top supplier of machine tools, microelectronics, nitrocellulose – which is critical to making munitions and rocket propellants, and other dual-use items that Moscow is using to ramp up its defense industrial base, a defense industrial base that is churning out rockets, drones, tanks, and other weapons that President Putin is using to invade a sovereign country, to demolish its power grid and other civilian infrastructure, to kill innocent children, women, and men. Russia would struggle to sustain its assault on Ukraine without China’s support. In my meetings with NATO Allies earlier this month and with our G7 partners just last week, I heard that same message: fueling Russia’s defense industrial base not only threatens Ukrainian security; it threatens European security. Beijing cannot achieve better relations with Europe while supporting the greatest threat to European security since the end of the Cold War. As we’ve told China for some time, ensuring transatlantic security is a core U.S. interest. In our discussions today, I made clear that if China does not address this problem, we will.”
“I also expressed our concern about the PRC’s unfair trade practices and the potential consequences of industrial overcapacity to global and U.S. markets, especially in a number of key industries that will drive the 21st century economy, like solar panels, electric vehicles, and the batteries that power them. China alone is producing more than 100 percent of global demand for these products, flooding markets, undermining competition, putting at risk livelihoods and businesses around the world. Now, this is a movie that we’ve seen before, and we know how it ends – with American businesses shuttered and American jobs lost. President Biden will not let this happen on his watch. We’ll do what’s necessary to ensure that American workers can compete on a level playing field. America’s actions are not aimed at holding back China’s development, nor are we decoupling our economies…We want China’s economy to grow. So do the American businesses and investors here, several of whom I had an opportunity to speak to in Shanghai. But the way China grows matters. As I told my counterpart, that means fostering a healthy economic relationship where American workers and firms are treated equally and fairly.” (Comment: I am certain many in Beijing will listen to all of this and agree that “this is a movie that we’ve seen before” with Japan on the receiving end. The economic logic of the overcapacity argument throughout this briefing makes very little sense to me. I understand that one decides to take protectionist steps to protect jobs and local manufacturing. That’s a political decision, but it is protectionist. Likewise, if one wants to impose restrictions to ensure domestic capacity and competitiveness in strategic domains, I get that. But that’s also not driven by the economic logic of trade. That’s the logic of strategic competition, and I see value in that. But it’s still using protectionist tools.)
On tensions with the Philippines regarding Second Thomas Shoal, he said that “I made clear that while the U.S. will continue to work to de-escalate tensions, our defense commitments to the Philippines remain ironclad”.
“I also raised concerns about the erosion of Hong Kong’s autonomy and democratic institutions as well as transnational repression, ongoing human rights abuses in Xinjiang and Tibet, and a number of individual human rights cases.”
“I encouraged China to use its influence to discourage Iran and its proxies from expanding the conflict in the Middle East, and to press Pyongyang to end its dangerous behavior and engage in dialogue. Going forward, we’ll continue our high-level discussions on these and other issues.”
“When it comes to China’s support for Russia’s defense industrial base, all I can tell you is I was extremely clear about our concerns in some detail, but we’ll have to see what actions follow from that. Now, I think China has demonstrated in the past when it comes to Russia and Ukraine that it can take positive action. You’ll recall that well over a year ago we had concerns that Russia was considering the possible use of a nuclear weapon, and I believe that China’s voice was important in, at least at that time, moving Russia away from that possible course of action. But now it is absolutely critical that the support that it’s providing – not in terms of weapons but components for the defense industrial base – again, things like machine tools, microelectronics, where it is overwhelmingly the number-one supplier to Russia. That’s having a material effect in Ukraine and against Ukraine, but it’s also having a material effect in creating a growing that Russia poses to countries in Europe and something that has captured their attention in a very intense way.”
Tiktok did not come up in the talks, as per Blinken.
On the Middle East: “I think I’ve talked to the Foreign Minister Wang Yi at least half a dozen times on this since October 7th, including of course today but also in previous meetings we had, phone conversations, et cetera. And yes, I think this is an area where China can use the relationships it has, the influence it has, to try, for example, to prevent the conflict from escalating, from spreading. And we had a good conversation when tensions were particularly acute follow – preceding and then immediately following Iran’s unprecedented attack on Israel 10 days or so ago. And I think the relationships, again, that China has can be positive in trying to calm tensions, prevent escalation, avoid the spread of the conflict. And we agreed that we remain in regular touch on this, and that’s certainly my intention.”
II. State Council Executive Meeting
Li Qiang chaired the meeting and heard an inspection and research report by the General Office of the State Council on optimizing the business environment. The report says that it is necessary to “focus on the overall development situation, continue to work hard to create a market-oriented, law-based, and internationalized first-class business environment”.
“All localities and departments must attach great importance to the problems identified in inspections and research, focus on addressing the pain points and difficulties in promoting fair competition, protecting the legitimate rights and interests of enterprises, removing market barriers, expanding opening-up, and optimizing government services, and identify and implement practical and effective measures to address them. It is essential to strengthen follow-up supervision, conduct timely ‘return visits’, and ensure that all problems are rectified. Relevant departments should analyze and study the opinions and suggestions collected from inspections and research one by one according to their division of responsibilities and actively incorporate them into policy formulation and promulgation. Typical experiences and practices should be summarized and promoted in a timely manner.” 要着眼发展大局，在营造市场化、法治化、国际化一流营商环境上持续用力，务必抓出成效。对督查调研发现的问题，有关地方和部门要高度重视，聚焦促进公平竞争、保护企业合法权益、破除市场壁垒、扩大对外开放、优化政务服务等方面存在的痛点难点，拿出务实管用的举措，切实加以解决。要加强跟踪督办，适时开展“回头看”，确保问题全部整改到位。对督查调研收集到的意见建议，有关部门要按照职责分工，逐条分析研究，在制定出台政策时积极予以吸收。对典型经验做法要适时总结推广.
The meeting also deliberated and adopted a draft regulation of disciplinary actions for staff in managerial positions in state-owned enterprises (SoEs), and a decision to adjust and refine the management catalogue of production licenses for industrial products. On the former, the report says:
“It is necessary to strictly enforce accountability, the implementation of regulations must be combined with inspection and rectification work. Illegal activities must be firmly investigated and those responsible held accountable. It is necessary to enhance regular supervision, focus on illegal activities specified by the regulations, closely monitor individuals in key domains, target repeatedly occurring and widespread issues, and take preemptive measures to nip issues in the bud. Adhere to addressing both the symptoms and root causes, further promote the reform and improvement of state-owned enterprises, further improve systems and mechanisms, and plug system loopholes.” 要严格执法问责，将条例落实与巡视整改工作结合起来，对违法行为坚决查处、严肃追责。强化日常监督，对照条例规定的违法行为，紧盯重点领域重点人员，聚焦易发多发问题，抓早抓小、防微杜渐。坚持标本兼治，深入推进国有企业改革深化提升行动，进一步健全体制机制、堵塞制度漏洞.
III. NPCSC Session
The session ended with lawmakers adopting the:
academic degrees law
tariff law
decision to amend the Law on the Popularization of Agricultural Technology
the Law on the Protection of Minors
the Biosecurity Law
They also ratified four treaties with other countries relating to judicial assistance in criminal affairs and extradition, and adopted a deputy qualification report and personnel-related bills.
Finally, next week will have a South American flavour in Beijing, as the foreign ministers of Argentina, Bolivia and Peru will be visiting China.