Tariff sanctions imposed by both the United States and China, and other points of contention in the bilateral relationship, have made it more complicated for companies to plan and execute their investment strategies for the China market. Further market disruptions from the COVID-19 pandemic have also slowed crossborder transactions as governments tighten their regulatory requirements. These uncertainties also pose unprecedented challenges for Chinese regulators and enforcement agencies attempting to balance strategic interests with fair competition.

As a result of annual revisions to China’s national Foreign Investment Negative List released by China’s National Development and Reform Commission (NDRC) and Ministry of Commerce last month, new sectors will be open to foreign investment beginning on July 23. These revisions were largely expected and did not make any groundbreaking announcements. This latest version combines some formerly separate sectors, which also contributes to the list appearing shorter in comparison to previous years.

On June 30, China’s National People’s Congress (NPC) Standing Committee unanimously passed the Hong Kong Special Administrative Region National Security Protection Law, which was signed into law by President Xi Jinping and inserted into Hong Kong’s Basic Law. It is effective immediately. In anticipation of the law’s passage, the United States has begun the process of revoking Hong Kong’s status under US law that grants it special privileges from mainland China.

According to statements at China’s National People’s Congress (NPC), companies operating in China can expect the government to focus on bringing wages more in line with GDP growth in an effort to raise standards of living across China. The Government Work Report for this year’s NPC calls for proportionate increases in wages relative to GDP, but does not provide specific details.

As China seeks to recover from the economic toll of the COVID-19 pandemic, the government has begun rolling out a “new infrastructure” initiative to fuel and transform the economy by employing modern technologies like AI, 5G, and blockchain. While the catchphrase has gained traction, few local governments have announced tangible measures supporting the initiative. While related policies are only in their nascent stages, high-level remarks suggest “new infrastructure” projects could pose opportunities for foreign companies in China.

The Ministry of Justice (MOJ) named Tang Yijun (唐一军), former governor of Liaoning Province, as the new minister to replace Fu Zhenghua (傅政华) after Fu reached the mandatory retirement age for minister-level officials of 65. Tang spent most of his political career serving as the head of the Commission for Discipline Inspection in Zhejiang Province when President Xi Jinping was the provincial party secretary.

It is simply a fact that the world’s most important bilateral relationship is also among the world’s most conflicted and tense relationships. It will likely get more tense in the weeks and months ahead. The question, now, is what this means for US business and how do we proceed at the micro-economic level—enveloped in such terrible diplomatic, geopolitical, and economic uncertainty.