International travelers are returning to China. In Q1 2024, there was a 305 percent year-on-year increase in foreign national inflows—a trend spurred by loosened entry restrictions and efforts to boost the economy since the Chinese government lifted its zero-COVID policy in late 2022.
On June 21, the US Department of the Treasury issued a highly anticipated draft rule aimed at curbing the flow of US capital into sensitive, dual-use technologies in China. The rule, once implemented, will enact novel filing requirements—and, in certain cases, prohibitions—for US corporations and investors that seek to conduct investment activities in a defined range of technologies, which includes semiconductors, quantum computing, and artificial intelligence (AI).
In recent weeks, the Office of the US Trade Representative (USTR) has made a series of announcements related to the package of new Section 301 tariffs targeting $18 billion of Chinese imports. These announcements, taken together with the results of USTR’s review of the original Section 301 actions, suggest tariffs will be an enduring feature of the US-China trade landscape for years to come.
In recent years, the United States and China have expanded their respective trade controls and sanctions systems to cover a broadening segment of bilateral commerce. The rapid pace of expansion, complexity of rules systems, and lack of transparency on both sides have raised compliance costs, injected significant uncertainty into business planning, and disrupted business relationships between both countries.
With carbon capture, utilization, and storage (CCUS) and methane emerging as the two main areas of consensus on climate cooperation between the United States and China, both areas present opportunities for companies operating in these fields. Climate envoys John Podesta and Liu Zhenmin focused on these two areas during a meeting in Washington, DC, in early May.
US-China bilateral trade in goods decreased by 2.9 percent year-on-year in Q1, despite US-worldwide trade increasing by 0.5 percent, the first such increase in US-worldwide trade since Q1 of last year. Bilateral trade has underperformed US-worldwide trade for the last three years due to shifts in trading patterns driven by economic and geopolitical factors.
On May 17, the People’s Bank of China (PBOC) introduced several new incentives for people to buy homes, including scrapping minimum interest rates on mortgages for new and pre-owned homes, and reducing the minimum down payment ratio for first-home buyers from 20 percent to 15 percent and for second homes from 30 percent to 25 percent. These are the lowest ratios since mortgages were introduced in 1992.
China’s National People’s Congress (NPC) and State Council have both released their legislative plans for the rest of 2024, reflecting China’s regulatory priorities in a wide array of economic and civil society matters.
The Biden administration on May 14 announced it would maintain current tariffs on Chinese imports and raise or impose new tariffs on $18 billion worth of Chinese-origin products in “strategic sectors.” The announcement marked the conclusion of the Office of the US Trade Representative’s (USTR) four-year statutory review of the 2018 Section 301 tariffs that were modified over time and ultimately levied upon nearly $550 billion of Chinese imports during the Trump administration.
On April 16, the National Bureau of Statistics (NBS) released first quarter economic data that paints a mixed picture for China’s 2024 economic growth. While the official NBS views the data as portraying good momentum for China’s economic rebound, many independent analysts noted that seasonal demand increases in January and February around the annual Chinese New Year holiday drove up the headline demand figures, and that March data on property investment, retail sales, and overall industrial output show signs of deceleration.
