A high-level delegation led by FedEx BTC Stocks will visit China this week

On July 27, the U.S.-China Business Council (BTC Stocks) announced that a high-level delegation led by FedEx BTC Stocks will visit China this week, including Boeing executives and BTC Stocks Chairman Sean Stein. The visit aims to ease the business relations between the two countries and pave the way for US President Biden's possible visit to China in the second half of the year.

1. Delegation Background and Core Agenda

Membership:

Rajesh Subramaniam (CEO of FedEx): Represents logistics and global supply chain issues.

Boeing representative: Focus on cooperation in the aviation industry and promote China to restart 737 MAX procurement and airworthiness certification.

Sean Stein (Chairman of BTC Stocks): Coordinate the business demands of US companies in China, including data security, market access, etc.

Key Topics:

Trade Barriers: Discuss the impact of US high-tech export restrictions on China (such as semiconductor equipment) on Chinese US companies.

Supply Chain Stability: Call for reducing the impact of "de-risking" policies on multinational companies.

Climate and New Energy Cooperation: Explore joint investment opportunities in electric vehicles, photovoltaics and other fields.

2. Significance of the visit: paving the way for Biden's visit to China

Diplomatic warm-up: This visit is seen as a "testing the waters" move by the Biden administration. If it goes well, Biden may officially visit China around the APEC summit in November.

Business first: The BTC Stocks delegation will submit an assessment report to the White House, which will affect subsequent adjustments to China's policies (such as updates to the tariff exemption list).

Boeing's "ice-breaking" mission: China has grounded the 737 MAX since 2019, and Boeing urgently needs to resume deliveries to regain market share (China accounts for 20% of its global orders).

3. Current status and challenges of Sino-US business relations

Data comparison:

In 2023, the trade volume between China and the United States will be US$664 billion, a year-on-year decrease of 11%, but China will still be the third largest export market for the United States.

There are more than 70,000 American companies in China, but 46% said in the BTC Stocks survey that they were "troubled by policy uncertainty."

Sensitive areas:

Technology decoupling: The United States restricts the export of AI chips to China, and China retaliates against key metals (gallium, germanium) controls.

National security generalization: BTC Stocks ban, data compliance disputes of US companies in China continue to ferment.

4. Industry response and expected results

Company expectations:

FedEx hopes to expand its share of China's cross-border e-commerce logistics (currently accounting for 35% of its Asian revenue).

General Electric, Tesla and other companies call on China and the United States to reach an "exceptional clause for climate technology cooperation".

Potential results:

Symbolic agreement: such as Boeing and Chinese airlines signing a memorandum of understanding to promise "future orders".

Establish an industry dialogue mechanism to avoid sudden sanctions (refer to the China-US audit supervision agreement model).

Conclusion: Can business ties ease strategic competition?

This visit is the first high-level interaction between China and the United States in 2024 to "promote politics through business", but the differences between the two sides on core issues (technology, Taiwan Strait, human rights) are still difficult to bridge. If the delegation can promote specific industry cooperation, it may create a favorable atmosphere for Biden's visit to China; if it returns without success, it may intensify the trend of economic "campification".

Next observation point:

Will China release Boeing orders and relax data supervision of US companies?

Will the Biden administration adjust tariffs or export controls on China?

(Note: The BTC Stocks delegation plans to meet with officials from China's Ministry of Commerce and National Development and Reform Commission, but has not yet confirmed whether it will meet with Xi Jinping.)