On Tuesday, October 8th, US Secretary of Commerce Raymond conducted a phone call with Chinese Minister of Commerce Wang Wentao, discussing topics such as US restrictions on chip exports to China and China’s policy on importing internet-connected vehicles. While both sides announced their agreement to continue communication, they still had differing views on the issue of “national security.”
The US side stated that they discussed the second meeting of the US-China Economic and Trade Working Group, which concluded in September.
Secretary Raymond pointed out, “The US business sector remains concerned about the decreasing transparency of China’s regulations, non-market policies and practices, and a series of structural overcapacity issues in various industrial sectors.”
Furthermore, she reiterated that US national security is non-negotiable and emphasized once again that the US government’s policy of “high walls around a small yard” aims to proactively safeguard national security as well as create space for healthy trade and investment.
The Chinese side’s announcement stated that Minister Wang Wentao expressed serious concerns regarding the US policies on semiconductors and restricting internet-connected vehicles from China.
“Minister Wang emphasized the necessity of clarifying national security boundaries in the economic and trade arena,” the announcement said. He also urged the US to lift sanctions on Chinese companies promptly.
On September 5th, the US Department of Commerce’s Bureau of Industry and Security (BIS) issued an Interim Final Rule (IFR), working with international partners to control areas related to quantum computing, semiconductor manufacturing, and other advanced technologies.
For years, the US has been combating China and other adversaries from acquiring the cutting-edge technological capabilities needed for artificial intelligence to prevent China from utilizing advanced chips and components for military purposes.
The measures announced in September build upon the extensive restrictions introduced in 2022. The 2022 regulations prohibited US companies from providing certain grades of advanced chip equipment to any Chinese customers without a license, and also restricted US persons (citizens, residents, and certain entities) from supporting the development or production of chips in China.
Additionally, for national security reasons, the US Department of Commerce proposed on September 23 to prohibit the use of Chinese software and hardware in internet-connected vehicles on US roads. This move effectively bans almost all Chinese cars and trucks from entering the US market.
The proposal will implement the software ban on vehicle models starting in 2027, while the hardware ban will take effect on vehicle models in 2030 or by January 2029.
The public has been given 30 days to comment on the proposal, with the aim of completing all procedures by January 20, 2025.
The annual report of the US-China Economic and Security Review Commission (USCC) stated that for the majority of 2023, US-China relations fluctuated between tense escalation and de-escalation, describing this as a “new normal of ongoing, long-term strategic and systemic competition.”
“Both domestically and internationally, the Chinese Communist regime has shown no signs of changing its policies. Beijing continues to refuse cooperation with the US on basic issues such as national security, economy, or trade,” the report said.
“At present, China (CCP) appears to primarily view its diplomacy with the US as a tool to prevent and delay US pressure for a period of time, while advancing its own economic, military, and technological capabilities. Beijing continues its efforts to challenge the existing international order, seeking to establish a new order and counter the alliances between the US and its democratic allies in Europe, Asia, and other regions,” the report stated.
Both the US and Chinese announcements stated an agreement to maintain open communication channels in the coming months.