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U.S.-China News Brief
May 6, 2022

U.S. China Policy

Secretary of State Antony Blinken was set to make a speech about the Biden administration’s China strategy on May 5. However, due to a positive covid test, Blinken had to postpone his remarks. The speech, while not expected to hold any major surprises, was likely going to offer more clarity regarding China policy. It was also meant to help set the stage for next week’s U.S.-ASEAN Special Summit and President Biden’s visit to South Korea and Japan later this month.

During a trip to Canada, U.S. Trade Representative Katherine Tai said that the upcoming review of tariffs on Chinese goods would include “robust” industry expert consultations. The start of the statutory four-year Section 301 review was announced on May 4.

On May 4, the U.S. Security and Exchange Commission listed an additional 80 companies for “possible expulsion” from the U.S. stock market, including, China Petroleum & Chemical Corp, and other large Chinese firms. U.S. regulators are currently in Beijing in hopes of coming to an agreement on auditing compliance for Chinese firms listed in the U.S.

On May 3, President Biden delivered remarks at Lockheed Martin. During his speech, he discussed the Bipartisan Innovation Act and the CHIPS Act currently being considered by Congress. Biden said the manufacturing of semiconductors is “a national security issue.” He continued, “This is one of the reasons why the Chinese Communist Party is lobbying folks to oppose this bill.” On May 4, the U.S. Senate took steps to move the bill forward.

Biden also reiterated statements he has made in the past that “there’s an ongoing battle in the world between autocracy and democracy.” He elaborated, “Xi Jinping…is straightforward about it. He says that democracies cannot be sustained in the 21st century… But that’s not going to be the case. If that happens, the whole world changes.” [Full text of Biden remarks]

On May 4, the Armed Services Committee held a hearing on the Nuclear Weapons Council. During the testimonies, both China and Russia’s nuclear programs were discussed. Admiral Charles Richard, head of U.S. Strategic Command, said, “We are facing a crisis deterrence dynamic right now that we have only seen a few times in our nation’s history.” [Joint Statement]

Covid-19 in China

China has increased its closures, lockdowns, testing, and other containment methods in an effort to prevent major cities from experiencing the higher case numbers and extreme measures seen in Shanghai. This week, Beijing has shut dozens of subway stations and bus routes, Beijing’s Chaoyang district conducted three additional rounds of mass testing and closures, and the Olympic Council of Asia postponed the Asian Games set to be held in China.

The manufacturing city of Zhengzhou and the port city of Dalian both announced new mass testing measures. Mass testing is expected to increase further, with China is in the process of preparing thousands of covid testing sites that will be in permanent use after lockdowns end. According to macro analyst Tao Chuan, if regular mass testing expands to all of China’s largest cities (first and second tier), it could cost more than 257 billion USD.

China’s five-day Labour Day holiday, which ended Wednesday, saw a 43 percent drop in tourist spending and a 33 percent drop in travel over last year. About a third of the usual tourist spots were closed due to covid restrictions. Quarantines, lockdowns, and closures have also left millions of Chinese out of work, with migrant workers and recent graduates hit the hardest. Global shipping delays have also returned in light of increased lockdowns in China.

During a May 5 Politburo standing committee meeting, Xi Jinping reiterated his continued support for their “dynamic zero-Covid” measures. Some experts suggest that the low vaccination rate among China’s most vulnerable population, the elderly, has exacerbated China’s covid problem and covid lockdowns. Vaccination, unlike the lockdowns, are not mandatory.

Additional News

An interview with Chinese Ambassador Qin Gang was published in Forbes on May 5. He discussed the recent Pew survey on U.S. perception on China, tariffs, the global economy, and more.

Week-long rescue efforts have ended after a building collapsed suddenly in Changshao. Rescuers were able to find ten survivors in the rubble, with the last pulled out more than five days later. Overall, 53 people were killed.