China Market Intelligence

The US-China Commercial Issues Working Group (CIWG), the first commercial bilateral mechanism between the United States and China in seven years, recently concluded its first meeting, which took place in Washington, DC. The mechanism was created last fall, during talks between Commerce Secretary Gina Raimondo and Commerce Minister Wang Wentao, as a platform for the private sector to raise specific issues with both governments.

China has seen several high-level personnel changes at the central and provincial levels over the last few months. On February 7, Wu Qing (吴清), previously the deputy party chief of Shanghai, assumed the role of chairman of the China Securities Regulatory Commission (CSRC), succeeding Yi Huiman (易会满).

Chinese state planners have long recognized the imperative of transitioning toward a consumption-driven economy for long-term stability. But a deflationary domestic economy, low business and consumer confidence following COVID-19, geopolitical tensions, and supply chain disruptions have stifled spending.

China’s leadership is ramping up engagement with foreign business executives as the country works to increase foreign direct investment, which reached a 30-year low in 2023 amid poor sentiment from the business community driven by concerns over weak demand, overcapacity, geopolitical uncertainty, and long-standing regulatory issues.

After six months of anticipation, the Cyberspace Administration of China (CAC) finalized the Provisions on Facilitating and Regulating Cross-Border Data Flow on March 22, representing a pivotal step in the evolution of China’s data governance landscape. The provisions serve as a final rule to the draft rule released in September 2023.

With Representative Mike Gallagher (R-WI) leaving Congress on April 19, House Speaker Mike Johnson (R-LA) was tasked with picking Gallagher’s replacement to chair the Select Committee on the CCP.  Within a couple of days, Johnson chose Representative John Moolenaar (R-MI), a five-term congressman and current member of the select committee.

I recently returned from three weeks in China, where I met with dozens of members, Chinese officials, the US Embassy in Beijing, the US Consulate in Shanghai, and our staff in Beijing and Shanghai. While there, I also attended the China Development Forum, and as many may already be aware, took part in a meeting with President Xi Jinping.

On March 5, during the annual Two Sessions conference, China released its government budget report, which lays out how the state intends to spend in 2024. This year’s budget is conservative, with increases to revenue and expenditure in line with previous years.

In Washington, the popular social media app TikTok is back in the spotlight after previous legislative efforts to rein it in abruptly stalled. Led by House Select Committee on the CCP Chair Mike Gallagher (R-WI) and Ranking Member Raja Krishnamoorthi (D-IL), the Protecting Americans from Foreign Adversary Controlled Applications Act would prohibit TikTok from being offered in app stores in the United States unless TikTok severs its relationship with ByteDance, its Chinese parent company.

On March 5, Premier Li Qiang opened the National People’s Congress by delivering the annual government work report. The report was released in concert with the National Development and Reform Commission’s (NDRC) annual draft Plan for Economic and Social Development as well as the Ministry of Finance’s (MOF) draft central and local government budgets, which include further details that complement the premier’s work report.