Research & Analysis

China’s financial regulators have their work cut out for them. Against the backdrop of a three-year bear market, a backlog of initial public offerings (IPOs), and an ongoing anti-corruption campaign, Chinese policymakers are pushing ahead with industry reforms to improve the quality and openness of China’s capital markets.

National Security Advisor Jake Sullivan traveled to China this week for meetings with senior Chinese officials, including President Xi Jinping and Foreign Minister Wang Yi. Xi underscored to Sullivan the importance of navigating the bilateral relationship with “solidarity and coordination” instead of “exclusion or regress” during their Thursday meeting in Beijing.

On July 25, the Bureau of Industry and Security (BIS) published proposed rules that, if implemented as written, would significantly expand US export controls over US person activities and previously uncontrolled items. The rules restrict exports, re-exports, and in-country transfers of goods, software, and technologies to four categories of end users in China and other countries that the United States maintains an arms embargo on.

Chair of the Select Committee on the CCP John Moolenaar (R-MI) and Ranking Member Raja Krishnamoorthi (D-IL) on Monday sent a letter to US Food and Drug Administration (FDA) Commissioner Robert Califf urging the agency to more proactively regulate US biotech activities in China.

China released a rapid-fire burst of climate policies in the first half of August to accelerate progress on the country’s goal to reach peak carbon by 2030. The policy rollout comes after the official readout of the Third Plenum called for a concerted effort to cut emissions, the first time carbon emissions were mentioned in a plenum document.

Treasury Department officials are holding talks with their Chinese counterparts in Shanghai this week during the fifth meeting of the Financial Working Group. Treasury Assistant Secretary for International Finance Brent Neiman is leading the US delegation, with People’s Bank of China Deputy Governor Xuan Changneng leading on the Chinese side.

The last few months have seen multiple developments affecting the sector, particularly the automotive industry. China increased automotive purchase subsidies and approved the first batch of companies to participate in its pilot scheme for L3 and L4 autonomous vehicle testing.

The Commerce Department reportedly plans to propose a ban on high-level Chinese software in autonomous and connected vehicles. The proposed rule, which is expected to be unveiled in the coming weeks, would bar Chinese software in US vehicles with Level 3 automation or higher, as well as ban vehicles with Chinese-developed advanced wireless communications abilities modules.

Under the leadership of Chair Raj Subramaniam, seven USCBC board directors recently completed our annual board mission to China. See our public statement on the trip here.

The Commerce Department’s Bureau of Industry and Security (BIS) on Monday released two notices of proposed rulemaking on military and intelligence end uses and users and crime controls. The rules are the largest expansion of US export controls since the system was overhauled in 2018.