2023 DC Doorknock Report, AmCham China, June 2, 2023.
By Allison Lapehn
For the first time in three years since the onset of the COVID-19 pandemic, an AmCham China DC Door Knock delegation, led by Chairman Colm Rafferty and President Michael Hart, was on the ground in Washington DC for a week of meetings with think tank representatives, members of Congress, and various departments of the Biden administration. This year’s delegation included 13 representatives from AmCham China’s Chairman’s Circle, Policy+ members, Board of Governors, and Executive Policy Community.
Source: AmCham China
AmCham China presented member concerns drawing from the 2023 Flash Surveys, 2023 China Business Climate Survey Report (BCS) and the 25th Annual American Business in China White Paper (White Paper). The delegations presented consistent talking points in all meetings held with DC-based policymakers, selected takeaways of which can be found below:
Economic involvement with China supports the US economy in critically important ways.[1] China remains an important market for US products and services, including agriculture, civil aviation, healthcare, finance, and education, ensuring the US’s leading position in those sectors. Our trade with China enables US companies to remain global industrial leaders and to invest more in R&D at home. As noted in the USCBC 2022 Export Report, in 2020, 858,486 US jobs were supported by exports to China.
Two-way trade in goods rose from US $658 billion in 2021 to US $690 billion in 2022,[2] despite the COVID-related economic slowdown and ongoing challenges in the bilateral relationship. In view of these and other challenges, American companies are working to diversify sourcing to ensure supply chain resilience. But sudden disruptions in economic relations between our two highly integrated economies would be devastating to both of our countries.
We recognize that there are significant areas of contention in the US-China relationship, many of which offer no easy prospects for resolution. Despite those frictions, the presence of US companies in China serves as a stabilizing force in the bilateral relationship. It also allows us to facilitate positive people-to-people engagement and showcase, both in and out of the workplace, the virtue of American values – including with respect to labor rights, intellectual property, environmental protection, anti-corruption, and reliance on the rule of law. US companies promote compliance programs in line with international best practices and encourage the adoption of US standards in China’s supply chains. For these reasons, US interests are best served by ensuring that American companies remain an active and positive force in China.
The American Chamber of Commerce in China understands that our two governments each have national and economic security concerns related to various aspects of our bilateral economic relations. We seek dialogue and guidance regarding the types of activities that may be problematic, so that we can avoid triggering those concerns, while also maximizing the scope of beneficial trade and investment between our two countries.
[1] US Export Report 2022 | US-China Business Council (uschina.org)
[2] https://www.weforum.org/agenda/2023/03/6-things-to-know-about-international-trade-this-month-february-2023/
Insights from Virtual DC Outreach Engagements
2023 has been a challenging and dynamic time for the US-China bilateral relationship. With ongoing limited in-person government engagement, the relationship has been tested by a breakdown in trust and communication following the balloon incident in February and subsequent struggles to rebuild high level communications channels that would allow for greater in-person engagements.
While some themes were recurring this year, new topics emerged at the core of policymakers’ concerns regarding American business operations in China and the bilateral relationship as a whole. The most prominent new topics are outlined below.
Emerging Issues
Four key topics emerged through discussions with various interest groups and policymakers in Washington DC. These issues are at the center of US-based discourse on China and have picked up steam in the past year, likely securing their place as concerns for years to come.
Taiwan
In August 2022, Speaker Pelosi’s visit to Taiwan thrust the island back into the spotlight of US politics. 2023 continues to see spirited debates about the role the US should have in maintaining the status quo.
Many US-based partners made the point that “neither US nor China sees escalation over Taiwan as beneficial to their interests.” Despite this, concerns over accidental escalation of tensions in the region have led to increased wariness from industry and policymakers regarding any potential reliance on Taiwan-based supply chains for key industries and technology components.
Industrial Policy
After the passage of the CHIPS and Science Act of 2022, there is a general consensus that greater efforts in crafting industrial policies related to core technologies would benefit the United States. Administration officials emphasized that while Congress may frame these policies as related to China as a strategic competitor, investing in the development of education and R&D in the United States is also an attempt to ensure continued strength of the US economy and overall development.
Technology development and national security were core concerns for many experts and members of Congress who met with our delegation. Members of Congress and the Administration noted that ensuring self-reliance in emerging technologies is crucial to the US strategy for economic and overall national security in the medium- to long-term.
Outbound Investment Reviews
Since the Committee on Foreign Investment in the United States (CFIUS) role in reviewing foreign investment from Chinese companies in US was enhanced under the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), many politicians and administration officials alike have called for a similar review process for outbound investment that could undermine national security.
While talking to Congressional offices on Capitol Hill, many raised this issue and noted that “it is not in US interests to allow firms who make money in the US to then invest it in Chinese companies advancing technology, AI, and cloud computing development that could have alternate military uses.” This refrain often included specific mention of firms in the financial sector who are perceived to “ignore the legitimate national security interests of the United States in lieu of high returns.”
Across the capital, talk of the rumored impending Executive Order (EO) on outbound investment reviews was a hot topic. Many mentioned that any EO would allow for greater legislation on the topic to fine tune the scope of the review measures.
Greater Concern on Safety of Business in China
Following the raids on several foreign businesses in China, many experts, Administration, and Congressional leaders in DC questioned the safety of operating an American business in China in 2023. There is concern that broad and ever-changing interpretations of what constitutes national security may lead to greater scrutiny of US business operations on the ground in China.
Congressional offices also expressed a lack of interest in traveling to mainland China in the coming years due to safety and surveillance concerns. Restarting regular people-to-people engagements across various levels of the government remains a core interest of AmCham China following the end of the COVID-19 pandemic.
To read about last year’s Outreach, click here.
DC Doorknock Follow Up Events & Briefings
Since our delegation returned to China, we have held numerous events to brief our membership on key learnings and on-the-ground sentiment from Washington DC. These events provided an overview of the delegation’s week in the American capital and discussed key themes that emerged during their meetings, including the 13th annual China Business Conference. Our goal is to keep our membership informed about the evolving political and economic landscape in the US and to explore potential implications for your organization’s operations in China.
