China’s commerce minister has told Micron Technology Inc that Beijing would welcome the US semiconductor company deepening its footprint in the Chinese market, signalling a further thaw in relations between the world’s top two economies.
In a meeting on 1 November, Chinese Commerce Minister Wang Wentao told Sanjay Mehrotra, president and CEO of Micron Technology, that China will optimise the environment for foreign investment and provide service guarantees for foreign enterprises, according to a brief statement published on Friday on the commerce ministry’s website.
The announcement came just a day after the Group of Seven (G7) rich nations agreed they would look to “de-risk, not decouple” from China, and as Washington pressured its allies to join it in restricting chip equipment exports to China.
The prospects of all-out trade battles between China and the West might be becoming distant for now, but the “de-risk” phrase means Western countries would continue to loosen economic entanglements with Beijing – putting into history books the decades of foreign factory expansion in China.
In a push to “de-risk China-related risks,” the US and Canada reached a deal on Friday with Latin American countries to strengthen supply chains in areas including clean energy, medical supplies and semiconductors in the inaugural session of a newly launched biannual summit.
And yet, the US de-risk shift from Trump-era’s decoupling push comes down to China’s economic might. China’s pull in having the world’s second-biggest economy — despite disappointment about its growth this year — counts for a whole lot, reports Bloomberg. That fundamental truth will be on display during Australian Prime Minister Anthony Albanese’s visit to the nation, which kicks off Saturday.
Biden himself has told Albanese to “trust, but verify” anything Beijing told him during the visit.
The high-level re-engagement now under way between the West and China underlines the acknowledgement that nobody can do without the world’s biggest manufacturer. As Yellen observed Thursday, “it’s simply not practical” to contemplate a full economic separation.
Since former US President Donald Trump led the charge against China’s economy with tariff hikes, Western nations have taken a much more aggressive posture against China in recent years. What’s now becoming clear is the appetite for that only goes so far.
Retracting Micron snub
“We welcome Micron Technology to continue to take root in the Chinese market and achieve better development under the premise of complying with Chinese laws and regulations,” Chinese Commerce Minister Wang added on a Friday statement.
The detente comes just months after China’s cyberspace regulator said Micron had failed a network security review and barred Chinese operators of key infrastructure from buying from the largest US memory chipmaker.
China’s move against Micron was widely seen as retaliation for Washington’s efforts to restrict Beijing’s access to key technology.
The Wednesday meeting between Wang and Mehrotra is line with a recent thawing in tensions between Washington and Beijing, as officials from both countries work to organise a meeting between US President Joe Biden and his Chinese counterpart Xi Jinping later this month at the Asia-Pacific Economic Cooperation summit in San Francisco.
US, LatAm tighten economic bonds
US President Joe Biden and leaders from Canada, Latin America and the Caribbean on Friday pledged to strengthen the Western Hemisphere’s supply chains as Washington works to counter China and stem regional migration.
Biden hosted leaders from Barbados, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Peru and Uruguay and top officials from Mexico and Panama at the White House.
Leaders at the inaugural Americas Partnership for Economic Prosperity (APEP) Leaders’ Summit agreed to strengthening supply chains in areas including clean energy, medical supplies and semiconductors. The also vowed to expand regional trade links.
Biden started the meetings with a message of hope despite challenges posed by the Israel-Hamas conflict and the Ukraine war.
He said the summit’s goal was to “harness the incredible economic potential of the Americas and make the Western Hemisphere the most economically competitive region in the world,” drawing a sharp contrast to China’s often-criticized lending practices.
“We want to make sure that our closest neighbours know they have a real choice between debt-trap diplomacy and high-quality transparent approaches to infrastructure and inter-development,” Biden said.
The leaders agreed to meet every two years, with Costa Rica to host the next leaders’ summit in 2025.
Senior US officials said they hope to reduce the numbers of migrants arriving at the US-Mexico border by expanding economic opportunities for people at home.
