U.S. Commerce Secretary discusses trip to China amid military and economic tensions

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• Geoff Bennett:

  This week, Commerce Secretary Gina Raimondo became the latest high-ranking U.S. official to visit China and engage with top Chinese leadership over a four-day visit.

  She went during a time of security and trade tensions between the two global giants and China's ongoing economic slowdown.

  Nick Schifrin reports.

• Nick Schifrin:

  Across four days, two cities and a half-dozen meetings, Commerce Secretary Gina Raimondo visited China with a message of boosting U.S.-China business.

  But Raimondo also visited American businesses and said she raised their concerns that Chinese policies could make China — quote — "uninvestable."

  Gina Raimondo, U.S. Secretary of Commerce: 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.

• Nick Schifrin:

  The two sides agreed to formal dialogues, including about American export controls, tourism and trade and investment challenges.

  The challenge that China faces is its own economy. Consumer consumption and private sector investment are dropping, as are exports and imports. The real estate market is tanking. The population is shrinking, and youth unemployment is so high, reportedly over 20 percent, Beijing stopped publishing the number.

  Raimondo's trip is the fourth Cabinet member to visit China in four months, CIA Director Bill Burns in May, Secretary of State Antony Blinken in June, and Treasury Secretary Janet Yellen in July.

• Gina Raimondo:

  We're going past just generalized commitments to talk. We have opened clear working groups and information exchanges and opportunity to put the toughest issues on the table and try over time to resolve them.

• Nick Schifrin:

  And with me now is Gina Raimondo, secretary of commerce.

  Madam Secretary, thank you very much. Welcome to the "NewsHour."

  During your visit to China, you warned that American businesses could consider China — quote — "uninvestable" because China's making it harder for them to operate, including raids and fines on consulting firms, travel restrictions, the passage of a counterespionage law.

  Did China commit to stop taking any of the steps that you have cited?

• Gina Raimondo:

  They did not.

  But, to be clear, I don't — I never would have expected that they would have. To put this in perspective, I'm the first commerce secretary in more than five years to be on the ground in China conducting meetings of this kind.

  So I don't think it would be reasonable to expect that, in these first meetings, they would make any kind of commitments or concessions. That being said, I was crystal clear that patience is wearing thin on behalf of us business and that China's recent rhetoric, which has been saying they want more foreign direct investment, has to be backed up by action.

• Nick Schifrin:

  You call it rhetoric.

  Recently, the State Council released a plan in China designed to improve the business environment. It includes promises that U.S. businesses have been asking for. But Beijing has made these promises, as you know, in the past. Do you get the sense today that Beijing is interested in any of these reforms?

• Gina Raimondo:

  It's very hard to say.

  If I were to take them at their word from the meetings that I had, I would say yes. But, again, putting on a 24-point plan is one thing. Actually backing that up with changes on the ground is another.

• Nick Schifrin:

  Fundamentally, doesn't change Xi Jinping's emphasis on national security over boosting growth mean that American businesses could continue to face a hostile work environment?

• Gina Raimondo:

  Yes, that is certainly a risk.

  And, as you say, that does seem to be the way things are going. But it's also true that there are many U.S. companies, even iconic brands, that have been operating in China for decades. And so we hope that they will be able to continue to do that. And we hope that they can look forward to a more predictable, transparent, fair, level playing field in terms of doing business in China.

• Nick Schifrin:

  But, if that is the risk, what U.S. national security benefit is there to continue to advocate for U.S. investment in China?

• Gina Raimondo:

  Well, our economies are deeply intertwined. And decoupling is certainly not in America's interest.

  We do about $700 billion of trade with China every year, which underpins hundreds of thousands of jobs in America. So, anything that we can do in trade with China that creates jobs in America or helps U.S. businesses to grow and innovate is a good thing.

  So, that, I think, is clearly in our interest. There's also the benefit of people-to-people exchange. When I was in Shanghai, I had the opportunity to visit the Disney park. And, frankly, there's benefit to Chinese kids being exposed to U.S. brands and U.S. culture and U.S. brand names.

  There's a certain soft power benefit of that, a certain exchange of culture and people-to-people exchange.

• Nick Schifrin:

  As we highlighted earlier, the Chinese economy is slowing and faces considerable headwinds. You have argued that Chinese economic stability is good for the United States.

  But would it in some ways help U.S. national security, for Chinese economic model to be seen by the U.S.' Asian partners and allies as failing?

• Gina Raimondo:

  I don't think so.

  We are not rooting in any way for China's economy to fail. People in China deserve to have a prosperous economy. We can compete. We can outcompete. Our workers are the best in the world. And we're ready to do that.

• Nick Schifrin:

  One of the most contentious aspects right now in the relationship with China are U.S. export controls on sensitive technology.

  And you in Beijing announced that you would agree to establish a dialogue where — quote — "export control enforcement information is exchanged."

  Do you believe that giving China more information about export controls could change their behavior?

• Gina Raimondo:

  I do.

  I think that, the more transparent we can be about our policy and our rules and regulations. first of all, we have more credibility. Nobody can say that it's done in secret or unfair or not clear, I think. So we want to lean into the transparency.

  But, secondly, I think it could increase compliance, if they know exactly what we expect, for example, allowing my team to go into Chinese businesses to do inspections. I think the more they know, it would give them a chance to comply. You could hope and expect increased compliance.

  The thing that's very important, it's actually not a dialogue, and that's conscience. This isn't an area to negotiate or to have dialogue. We're not negotiating. We're just explaining what it is that we're doing and explaining our expectations for how they comply.

• Nick Schifrin:

  Did they promise increased compliance?

• Gina Raimondo:

  No. Certainly, there were no promises made.

• Nick Schifrin:

  There are today export bans on semiconductor chips produced with U.S. technology.

  But there are exceptions to that ban that allows some of the largest chipmakers in the world from Taiwan, Samsung to make chips inside China. Will you extend that exception?

• Gina Raimondo:

  Case-by-case basis. Everything that we do is to protect America's national security.

  You know, even — even in the case of chips, it's important to say that, of the $700 billion in trade, only 1 percent is subject to export control.

• Nick Schifrin:

  But it sounds like you are considering extending the exception that allow these foreign companies to make advanced chips inside China.

  What good are export controls that prevent American companies from doing that, if you're going to allow three specific foreign companies to do that?

• Gina Raimondo:

  We would never allow anything to be made in China or done in China that we think would hurt our national security.

• Nick Schifrin:

  Secretary of Commerce Gina Raimondo, thank you very much.

• Gina Raimondo:

  Thank you, Nick.