FX.co ★ US commerce secretary visits China to reboot trade ties

US Commerce Secretary Gina Raimondo has called on China to improve the business environment for American companies in the country. "My message was there's a desire to do business, but we need predictability, due process and a level playing field," she said in an interview. "There's an appetite certainly for U.S. business to continue to do business in China," Raimondo said, adding that "It's an unlevel playing field for U.S. business. It's unpredictable."

This week, Raimondo visited China and met with government officials in Beijing and Shanghai. She is the first US Commerce Secretary to visit the country in five years — a period when bilateral relations have become increasingly tense.

Foreign companies in China have long complained about market access problems, including forced technology transfers and preferential treatment for local companies, especially state-owned enterprises. As experts in this field note, the current issues as well as China's long-standing trade surplus with the US contributed to the Trump administration's decision to impose tariffs on China in 2018, followed by restrictions on some Chinese companies. The US government attributes such actions to safeguarding national security, but many experts argue that it is nothing more than a protectionist policy.

"We just cannot allow sophisticated emerging technology from America to advance China's military," the Commerce Secretary said. This month, the Biden administration unveiled a proposal to restrict US investment in high-tech Chinese sectors and companies.

However, Beijing is also increasingly aggressive in response to US actions, citing national security concerns. This year, the Chinese government updated its counter-espionage law as well as conducted several high-profile raids on international consulting companies — events that raised fears among foreign businesses. Nevertheless, recent high-level statements from Chinese officials included calls to create a more competitive environment and stimulate foreign investment, which slightly eased tensions.

Pre-market

Shares of semiconductor manufacturer Ambarella fell by 14% as soft current-quarter forecasts overshadowed a strong report. Although Ambarella topped economists' expectations in the second quarter, the company stated that it anticipated a revenue decline of $50 million in the third quarter, while analysts polled by Refinitiv expected $67.6 million.

HP stock dropped by 5.6% after revenue underwhelmed economists. The tech giant reported $13.2 billion in revenue, falling short of analysts' estimate of $13.37 billion. Earnings per share matched expectations at 86 cents, excluding items.

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