In One Sentence

• President Biden met virtually with President Xi to discuss the “complex” U.S.-China relationship and the importance of managing competition responsibly. 
• National Security Council Indo-Pacific Coordinator Kurt Campbell noted that China’s application to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) agreement is “deadly serious.” 
• The Bureau of Industry and Security (BIS) added eight China-based technology companies to the Entity List.
• The Commerce Department has rejected an anonymous petition to investigate certain Southeast Asian companies for alleged circumvention of trade remedies against Chinese solar products. 
• The U.S. Court of International Trade reversed the Trump administration’s Section 201 actions on solar products, ordering the tariff rate to be lowered and tariff exclusions to be reinstated. 

Mark the Essentials

• Presidents Biden and Xi discussed bilateral trade and economic ties as well as the Phase One commitments.  
• China has been “assertively” responding to the Biden administration’s “strategic movements” such as Build Back Better investments, vaccine engagement and Quad, as per Indo-Pacific Coordinator, Kurt Campbell.
• BIS said that the companies were sanctioned to prevent Beijing from using U.S. emerging technologies for military-related quantum computing efforts, as part of its military-civil fusion strategy.
• An anonymous industry group had asked Commerce to investigate and impose tariffs on companies allegedly circumventing AD/CVD remedies against Chinese solar products, leading to strong opposition by some industry stakeholders. 
• U.S. solar industry had previously disagreed over whether the Section 201 measures should be extended.

Keeping an Eye On…

• The U.S. and China have hesitatingly begun to talk to each other on the trade and economic policy front, with a view to establish a modus vivendi for engagement going forward. For the most part though, the two sides continue to talk past each other on trade policy than to each other. China’s CPTPP application is an instructive case in point. Of course, it is a “deadly serious” undertaking. Didn’t China complete negotiations with the Europeans on a high-standard investment agreement, which by the way has almost identical provisions in its industrial subsidies chapter as the EU-Japan agreement of 2019? Indeed, if the Biden administration was interested in harvesting these very gains, all it has to do is thumb through the Phase Two provisions of the ‘almost-completed’ negotiations that the Trump administration had engaged in, as part of the U.S.-China Ninety-Day negotiations in Spring 2019. This evidently seems to be either too hard or too politically impolitic for the Biden team at this time. Regardless, a question that the Biden administration will have to answer at the end of the day is whether the inclusion of China into the global trade and economic system is more advantageous than disadvantageous—or vice versa. No part of the answer to this question requires the administration to soften its approach on technology controls, particularly with regard to entities that have linkages to the People’s Liberation Army (PLA). But it must answer this question if the administration wishes its Indo-Pacific economic framework to be taken seriously.     

Expanded Reading

• 12 more Chinese companies are placed on US export blacklist, South China Morning Post, November 25 [Paywall]
• Addressing the ‘Global Challenge’ Posed by China, United States Institute for Peace, November 22
• Readout of President Biden’s Virtual Meeting with President Xi Jinping of the People’s Republic of China, White House, November 16
• Xi calls for sound, steady China-U.S. relationship, Xinhua, November 16
• U.S. Trade Court Reinstates Bifacial Tariff Exclusion, Returns Section 201 Tariff Rate to 15%, Solar Energy Industries Association, November 16
• Commerce Rejects A-SMACC Solar Panel Circumvention Petition, National Law Review, November 11