BEIJING – US Commerce Secretary Gina Raimondo said on Monday that she raised concerns about a number of US business issues including Intel and Micron with Chinese Commerce Minister Wang Wentao.

Ms Raimondo is looking to boost business ties as US firms have reported increasing challenges with operating in China, while China has sharply criticised US efforts to block its access to advanced semiconductors.

She told two reporters in a brief interview that she also discussed restrictions that China has imposed on gallium and germanium exports in wide-ranging and candid discussions with Mr Wang. They met for more than two hours and then had a two-hour lunch.

Ms Raimondo in May said the United States “won’t tolerate” China’s effective ban on purchases of Micron Technology memory chips and is working closely with allies to address such “economic coercion”.

Earlier in August, Intel terminated its US$5.4 billion (S$7.3 billion) acquisition of Tower Semiconductor, after failing to secure approval from China’s State Administration for Market Regulation.

China, the world’s top germanium producer accounting for more than 60 per cent of global supply, in July announced restrictions on the export of eight gallium and six germanium products, which are used to make semiconductors, effective from Aug 1, citing national security reasons.

Ms Raimondo also announced on Monday that China had agreed to create a new formal working group on commercial issues with the US, giving Beijing a potential forum to express concerns.

She added that the first in-person meeting of the export control information exchange will be held at the assistant secretary level at the Ministry of Commerce in Beijing on Tuesday.

The new commercial issues working group is a consultation mechanism involving US and Chinese government officials and private sector representatives “to seek solutions on trade and investment issues and to advance US commercial interests in China”.

The US and China also agreed to convene subject matter experts from both sides for technical discussions “regarding strengthening the protection of trade secrets and confidential business information”, she said.

Ms Raimondo earlier on Monday said the world expects the US and China will have a stable economic relationship; the two countries share more than US$700 billion in annual trade.

“It’s a complicated relationship. It’s a challenging relationship. We will of course disagree on certain issues,” she said. “I think we can make progress if we are direct, open and practical.”

Ms Raimondo is holding three days of talks with Chinese and business leaders in China to boost business ties between the world’s two largest economies.

Mr Wang said US-China economic relations matter not just to the two countries, but also to the rest of the world, and appreciated Ms Raimondo’s remarks that she likes trade with China.

He added that he is ready to work together to “foster a more favourable policy environment” for US and Chinese businesses.

Ms Raimondo said the US and China have “worked over the summer to establish new information exchanges and working groups that will enable us to have more consistent engagement in our relationship”.

Some Republicans in Congress have criticised the suggestion that the US would agree to a working group with China on export controls on advanced semiconductor chips.

Ms Raimondo has declared off-limits any discussion of US export curbs aimed at slowing Beijing’s military advances.

The White House in August moved to start prohibiting some US investment in sensitive technologies in China, and it plans to soon finalise sweeping export restrictions on advanced semiconductors adopted in October.

“Of course, of matters of national security there is no room to compromise or negotiate,” she said, adding the vast majority did not impact national security concerns.

At an event later on Monday, Ms Raimondo showed off a number of personal care products made by US companies and sold in China to make the case that trade can flourish outside products with national security implications, and said 99 per cent of trade between the two countries is unrelated to export controls.

“No one can argue that health and beauty aids interfere in our national security,” she said.

“The plan, and the hope, is that our commercial relationship, if done right, can stabilise the political relationship.” REUTERS