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    4 ways ‘anchoring bias’ can hurt you financially

    “Anchoring bias” is a cognitive bias whereby humans unconsciously rely on an initial number or piece of information when making future decisions.
    It’s a type of mental shortcut that may have negative implications for consumers in the context of shopping, retirement savings, investing and negotiating.

    Gilaxia | E+ | Getty Images

    Humans use mental shortcuts in everyday life to help process information and make speedy decisions. But they can lead to bad choices when it comes to personal finance.
    Some of those poor outcomes are the result of “anchoring bias,” which can undermine a consumer’s rational thinking.

    This cognitive bias causes the brain to overly rely on initial impressions or numbers to shape subsequent thoughts and judgments. In other words, that early information “anchors” future choices.
    It’s “the idea that you get a number stuck in your head subconsciously,” said Jennifer Itzkowitz, associate professor of finance at Seton Hall University, who has studied anchoring bias in investing. “And it influences future decision-making.”
    More from Personal Finance:Your small business may qualify for a Covid-era tax creditHow to tell if your company has layoffs plannedIt’s official: Student loan payments will restart in October
    Humans are more likely to default to these mental shortcuts — known as “heuristics” in psychology jargon — when confronted by complex subjects like finance, when consumers may feel overwhelmed by information, Itzkowitz said.
    “You have to be aware this bias exists or you will fall prey to it daily,” said Bradley Klontz, a certified financial planner based in Boulder, Colorado, and a founder of the Financial Psychology Institute.

    Here are some ways anchoring bias may play a role in your financial life.

    1. A 401(k) match can be an unintentional anchor

    “Anchors” can be intentional or unintentional, said Klontz, a member of CNBC’s Advisor Council.
    A 401(k) match can serve as an unintentional anchor. Companies choose the respective structure of their 401(k) match — and that structure may inadvertently influence a worker’s savings rate.
    For example, a company may opt to pay a match worth up to 3% of a worker’s salary. As a result, workers may think saving 3% of their income in a 401(k) is adequate for their retirement savings — when it likely falls short.
    Conversely, employers can use the anchoring concept to boost savings. For example, Google found that sending e-mails to its employees that promoted relatively high anchors (like a contribution rate of 10% or 20%) influenced workers to boost savings.

    2. For shoppers, the first price seen sticks

    On the other hand, many retailers use the anchoring principle intentionally to influence consumer buying behavior, Klontz said.
    This often shows up when stores advertise a sale, he said.
    For example, a retailer may mark down a pair of pants from $60 to $30. Consumers tend to judge the sale price relative to the original, so the new price appears cheap. But when viewed objectively, $30 isn’t necessarily a good deal for consumers — especially if a regular stream of store sales means the pants are never $60.
    Take another example from the Corporate Finance Institute: If consumers first see a T-shirt that costs $1,200, and then see a second one that costs $100, they’ll likely see the second shirt as cheap. However, if that person had only seen the second shirt, priced at $100, they probably wouldn’t think it was inexpensive.

    Jamie Grill | The Image Bank | Getty Images

    Or, take this example relative to planning a vacation, from job site Indeed: A couple might find all-inclusive tickets to Hawaii for $800 each. Then, they subsequently find tickets to Puerto Rico for $400 each, but the tickets only cover airfare. The couple might choose the Puerto Rico trip to save money, but end up paying the same amount after additional costs for a hotel room and dining are included.
    “The anchor — the first price that you saw — unduly influenced your opinion,” wrote Tim Vipond, board chair of CFI Education.

    3. Investing apps: Starting small can leave you short

    katleho Seisa | Getty

    Some mobile apps for investing entice customers by suggesting they can get started with as little as $5, Itzkowitz said.
    The advertisement is meant to bring investing to the masses in a low-cost way, but may inadvertently anchor users to a paltry savings amount, she said. In turn, savers may have a false sense of financial security, she added.
    “Whatever people spend on their first stock purchase, they continue spending that exact same amount,” said Itzkowitz, who recently co-authored a research paper studying anchoring in investment trading platforms like Stash, Robinhood, SoFi, and Stockpile.

    Encouraging investors to start with a micro-investment “leads to lower wealth accumulation in this brokerage account due to anchoring bias,” according to the paper.
    This is true across all groups regardless of factors like income, age and gender, Itzkowitz said.

    4. In negotiations, anchor bias is a tricky tactic

    Companies and people use anchoring as a common negotiating tactic, relative to salary negotiations or a sale, for example, Klontz said.
    For example, during the hiring process, a company may try to anchor a prospective hire to a low initial salary offer. Any increase from there may feel like a win for the prospective worker but be on par with what the employer had initially hoped.
    Ultimately, the key to countering anchoring bias is to continually question your financial instincts.
    “Assume these things are being used in nefarious way to separate you from your money,” Klontz said. “Always be second-guessing yourself.” More

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    Stocks making the biggest moves premarket: Spotify, FedEx, Tesla, Coinbase and more

    A woman walks past FedEx Corp. Ground vehicle parked in the Midtown neighborhood of New York, U.S., on Friday, Dec. 4, 2015.
    John Taggart | Bloomberg | Getty Images

    Check out the companies making headlines in premarket trading.
    FedEx — Shares slipped 2.9% after the shipping giant reported quarterly results. The company notched an earning beat with an adjusted $4.94 per share against a Refinitiv consensus estimate of $4.89 per share. However, revenue came in below expectations at $21.93 billion. FedEx executives also provided roughly flat revenue guidance, and said chief financial officer Mike Lenz would retire on July 31.

    Coinbase, Riot Platforms — The crypto exchange stock climbed nearly 3% in premarket trading, seemingly aided by the surge in bitcoin’s 7.8% climb, while crypto mining firm Riot added 3.4%. Coinbase has faced a multiple headwinds recently, from an ongoing spat with the U.S. Securities and Exchange Commission to BlackRock’s launch of its own bitcoin exchange-traded fund.
    MicroStrategy — The cloud services firm with exposure to bitcoin added 2.9% in premarket trading, following other names higher. Shares have climbed more than 121% so far in 2023 and 8.7% over the past month.
    Tesla — Shares of the electric vehicle giant added 1.2% even after a downgrade from Barclays to equal weight from overweight. The bank warned investors that it may be prudent to “to move to the sidelines” after its recent rally. Tesla shares are up more than 52% over the past month.
    Winnebago Industries — The motorhome manufacturer slipped 4.7% after quarterly results. The company reported an adjusted $2.13 per share against estimates of $1.78, according to FactSet. However, the firm also reported a 38.2% decline in revenue to $900.8 million, which executives attributed largely to a more challenging RV market and steeper discounts.
    Spotify — Shares of the music streaming service rose about 2% in premarket trading after Wolfe Research upgraded Spotify to outperform from peer perform. Price increases and growth in advertising should help Spotify grow its revenue, according to Wolfe.

    Rivian — The EV maker climbed 1.6% premarket. A day earlier, the company announced that its customers would have access to Tesla’s network of charging stations starting next year.
    Exact Sciences — Shares added 6% on news of research agreements with The MIT and Harvard Broad Institute to exclusively use the company’s molecular residual disease diagnostic testing platform.
    — CNBC’s Jesse Pound contributed reporting More

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    Business in China is getting harder for European companies despite the end of Covid controls

    “Zero-Covid has ended, but other headwinds will need to be addressed if China is to regain its attractiveness,” the EU Chamber of Commerce in China said.
    There’s “no expectation that the regulatory environment is really going to improve over the next five years,” Jens Eskelund, president of the EU Chamber of Commerce in China, told reporters in a briefing.
    European business surveyed said their top challenges were by far economic: slowing growth in China and the world.

    Ole Kaällenius (front, r), CEO of Mercedes, signs a memorandum of understanding on cooperation on June 20, 2023, alongside Zhimin Qian (front, l), Chairman of the State Power Investment Corporation, in front of Li Qiang (back, l), Premier of the People’s Republic of China, and German Chancellor Olaf Scholz (SPD, back, r).
    Picture Alliance | Picture Alliance | Getty Images

    BEIJING – European businesses in China are finding it harder to operate in the country, even after it has re-opened from Covid, the EU Chamber of Commerce in China found in its latest member survey, released Wednesday.
    Mainland China ended its stringent Covid controls in December, and authorities pledged to support more business travel in and out of the country.

    But an initial economic rebound has lost steam, while regulatory hurdles remain.
    “Zero-Covid has ended, but other headwinds will need to be addressed if China is to regain its attractiveness,” the Chamber’s report said.
    Its annual business confidence survey found a large increase in companies saying they missed out on opportunities in mainland China due to restrictions on market access or regulatory barriers.
    While the survey noted part of those were due to Covid controls, the outlook remains grim.
    There’s “no expectation that the regulatory environment is really going to improve over the next five years,” Jens Eskelund, president of the EU Chamber of Commerce in China, told reporters in a briefing.

    Ambiguous rules and regulations remained the top regulatory obstacle for respondents for the seventh year in a row, the report said.
    China has increased regulation in the last few years. Some targeted alleged monopolistic practices in the internet technology sector, which Beijing had allowed to develop rapidly with few restrictions. Other new regulation has sought to set parameters for personal data protection, similar to privacy rules in Europe.
    However, this year China has made clear its emphasis on ensuring national security and expanded its counter-espionage law. News of raids or probes at three foreign consulting firms in China have also rattled business leaders overseas.
    Eskelund said foreign businesses still awaited clarity on the new regulation, as they have with rules released more than five years ago.
    “I think we will need to see how this actually pans out in reality,” he said. “We are not aware of a great many companies who felt impacted in concrete terms.”

    Slowing China growth the top challenge

    European business surveyed said their top challenges were by far economic: slowing growth in China and the world. U.S.-China trade tensions ranked third, the report said.
    China reported economic data for May that missed expectations and showed a slowdown from the prior month.
    “At the end of the day the bread and butter is what we are able to sell,” Eskelund said. “Economic concerns in this instance here [are] being perceived by European companies as more important than politics.”
    Anecdotally, he said members were more concerned about China’s economy in recent weeks than when the survey was done.
    The study was conducted from February to early March, the chamber said.

    Impact on foreign investment

    The uncertainty and macroeconomic environment have weighed on foreign investment in China.
    The survey found only 55% of respondents said China is one of the top three destinations for future investments – the lowest since the survey began asking the question in 2010.
    “We don’t have a single [small or medium-sized company] coming to China since the end of 2019,” Eskelund said, noting that’s based on chamber inquiries at embassies.
    China’s Ministry of Commerce did not immediately respond to a CNBC request for comment on this story.
    The ministry has called 2023 an “Invest in China Year” and local governments have been trying to court foreign money. Premier Li Qiang also met with German businesses this week in his first trip overseas in the role, which he gained this year, state media said.

    Read more about China from CNBC Pro

    Li is also set to deliver a keynote speech and meet with global business leaders at the World Economic Forum’s conference in Tianjin, China next week.
    EU Chamber members appreciate government engagement, Eskelund said, noting that business conditions vary by industry.
    Still, he said, over a quarter of surveyed respondents “never expect to see a meaningful opening of the market.” More

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    Chinese EV maker Nio raises more than $700 million in capital injection from Abu Dhabi

    Chinese electric car company Nio announced Tuesday it received $738.5 million in new capital from a fund owned by the Abu Dhabi government.
    The deal was priced at $8.72 a share, a release said. That’s 6.7% below where Nio’s U.S.-listed shares closed Tuesday.
    In the last several months, Middle East investors have increasingly looked for opportunities in China, especially in electric cars.

    Nio’s ET5 stands on display at the Central China International Auto Show on May 25, 2023, in Wuhan, China.
    Getty Images | Getty Images News | Getty Images

    BEIJING — Chinese electric car company Nio announced Tuesday it received $738.5 million in new capital from a fund owned by the Abu Dhabi government.
    The strategic investment ultimately gives the fund, CYVN Holdings, a 7% stake in Nio.

    The deal was priced at $8.72 a share, a release said. That’s 6.7% below where Nio’s U.S.-listed shares closed Tuesday, down by about half a percent.
    Nio earlier this month said lackluster car deliveries was affecting cash flow, and that it was delaying capital expenditure and some research and development projects.
    The company said then it had enough cash to support its business. Nio disclosed cash and cash equivalents of 14.76 billion yuan ($2.07 billion) as of March, below what it disclosed for the end of 2021 and 2022.

    Middle East interest in China

    In the last several months, Middle East investors have increasingly looked for opportunities in China, especially in electric cars.

    China-based funds have also looked to Middle East capital as investors from the U.S. and other regions turned cautious on China amid regulatory uncertainty.

    Nio said it expects the deal with the Abu Dhabi fund to close in early July, after which they plan to “pursue opportunities in Nio’s international business.”
    The agreement also gives CYVN the right to nominate a director to Nio’s board, the announcement said.

    Read more about electric vehicles from CNBC Pro More

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    As growth stalls for the U.S. and China, Blinken talked up economic ties in high-stakes Beijing trip

    In a press conference Monday, Blinken noted record high trade between the two countries, and said the U.S. is “prepared to cooperate with China” in “macroeconomic stability.”
    Earlier that day, he met with U.S. businesses in China working in health care, automotive and entertainment, the State Department said.
    On the issue of Taiwan, Blinken also brought up the economic angle.

    US Secretary of State Antony Blinken (L) meets with China’s President Xi Jinping (R) at the Great Hall of the People in Beijing on June 19, 2023.
    Leah Millis | Afp | Getty Images

    BEIJING — Secretary of State Antony Blinken underscored the importance of the economic aspects of the bilateral U.S.-China relationship during his high-stakes trip to Beijing earlier this week.
    In a press conference Monday that wrapped up his visit, Blinken noted record high trade between the two countries, and said the U.S. is “prepared to cooperate with China” in “macroeconomic stability,” among other areas of mutual interest.

    Earlier that day, he met with U.S. businesses in China working in health care, automotive and entertainment, the State Department said. The head of U.S. foreign policy meeting with businesses can’t be considered a given on trips of this nature.
    “I know particularly when Blinken was [scheduled to be] coming before in February, we lobbied and we were told there was no time for the business community,” Michael Hart, president of the American Chamber of Commerce in China, told CNBC.

    Hart said he didn’t know what may have changed since then, but noted similar attention to business when German Foreign Minister Annalena Baerbock visited Beijing in April.
    “That would suggest the politicians do very much understand the economic linkages and the importance for political stability between those two economies,” Hart said. “It’s significant.”
    The German Chamber of Commerce in China said that during her Beijing trip, Baerbock visited German company Flender, a gearbox manufacturer.

    Chairman Colm Rafferty and Vice Chair Roberta Lipson attended the meeting with Blinken on behalf of AmCham China. The U.S. Department of State referred CNBC to Blinken’s press conference Monday when asked about AmCham China’s comment about failing to get a meeting with the secretary during his planned February trip.

    Symbolic visit

    Blinken met Chinese President Xi Jinping Monday as part of his trip to Beijing, the first visit by a U.S. secretary of State since 2018.
    Gabriel Wildau, managing director at consulting firm Teneo, said the most important economic takeaway from Blinken’s trip was that it happened, especially the meeting with Xi.
    “The big fear for investors has been that bilateral relations are on an unstoppable downward spiral,” he said. “Just by signaling that relations may stop getting worse, the two sides can reduce pressure on companies to explore options for decoupling.”
    Blinken also met with Director of the Chinese Communist Party’s Central Foreign Affairs Office Wang Yi, and State Councilor and Foreign Minister Qin Gang.

    Challenges for U.S. business in China

    U.S.-China tensions escalated under the Trump administration. It had focused on using tariffs and sanctions in an attempt to address long-standing complaints about the inability for U.S. companies to access the Chinese market in the same way as local firms.
    Blinken told reporters at Monday’s press conference that he heard about the problems for U.S. companies in China, and the companies’ desire to grow their local business. He described doing business in China as being in the best interests of the U.S.

    Slowing growth

    Regulatory challenges aside, a more pressing issue for businesses is slower economic growth in China and the U.S. in the last few months.
    The U.S. Federal Reserve has aggressively hiked interest rates in a bid to stem inflation domestically. China’s central bank this month started trimming major interest rates to support growth.
    Treasury Secretary Yellen is among the U.S. officials expected to visit Beijing in the near future.

    Global macroeconomic stability is one of the items the two countries should work together on, U.S. President Joe Biden said at his meeting with Xi in November, according to a readout. 
    On Monday, Blinken listed out similar areas of potential cooperation, including climate and the economy.
    He said the growth of major economies such as China is in the U.S. interest and described the economic relationship as “vitally important.”
    “But at the same time, as I said, it’s not in our interest to provide technology to China that could be used against us,” he said. 
    The Biden administration has used sanctions and export controls to restrict the ability of U.S. businesses to work with Chinese partners on advanced technology such as high-end semiconductors.

    Taiwan economics

    On the issue of Taiwan, Blinken also brought up the economic angle. He noted that a crisis over the island would likely “produce an economic crisis that could affect, quite literally, the entire world.”
    He pointed out that 50% of commercial container traffic goes through the Taiwan Strait every day, and that 70% of semiconductors are manufactured on the island.
    Blinken said he made it “very clear” to the Chinese about rising concerns surrounding Beijing’s recent “provocative actions” — and the “dramatic consequences” for the world if a crisis around Taiwan escalated.
    Beijing claims Taiwan is part of its territory, and has maintained it seeks “peaceful reunification” with the democratically self-governed island. The U.S. recognizes Beijing as the sole government of China but maintains unofficial relations with Taiwan.
    Blinken said a fundamental U.S. understanding is that any differences on Taiwan “will be resolved peacefully.” He reiterated that the U.S. does not support Taiwan’s independence. More

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    Stocks making the biggest moves midday: Goldman Sachs, Avis, Rivian, Nike and more

    Signage outside Intel headquarters in Santa Clara, California, Jan. 30, 2023.
    David Paul Morris | Bloomberg | Getty Images

    Check out the companies making headlines in midday trading.
    Goldman Sachs — Shares declined 2.2% in midday trading. This past weekend, the firm followed other banks including UBS and Bank of America in cutting its forecast for economic growth in China.

    Avis — The car rental company surged more than 6%. Morgan Stanley upgraded Avis to overweight earlier Tuesday.
    Chevron, ExxonMobil — Energy giants Chevron and ExxonMobil slipped more than 2% each in midday trading. News of uncertainty around oil demand in China pushed the price of Brent and U.S. West Texas Intermediate crude futures lower Tuesday.
    Nike — Shares of the sports apparel company slid nearly 3%. On Monday, UBS said it expects Nike’s guidance for full-year 2024 to fall short of expectations. “We anticipate this type of guide causes the market to revise its NKE earnings expectations lower,” analyst Jay Sole wrote. He trimmed his price target to $145 from $155 but maintained a buy rating on shares. The company will post its fiscal fourth-quarter results on June 29.
    Rivian — Shares of the electric vehicle rose more than 4% after Rivian announced its customers will have access to the Tesla charging network in 2024. Rivian’s announcement follows similar moves from Ford and GM.
    Intel — Shares were trading 3.8% lower Tuesday. A day earlier, Intel announced it would spend more than 30 billion euros, or nearly $33 billion, on two semiconductor plants in Germany. In an agreement with Intel, the country will also offer a 10 billion euro subsidy package, Bloomberg reported.

    Dice Therapeutics — Shares surged 37% after Eli Lilly said it was acquiring the biopharmaceutical company for $2.4 billion. Eli Lilly will pay $48 per share, which is about 40% higher than where shares closed Friday.
    Alibaba — The Chinese telecommunications stock pulled back nearly 5% Tuesday. Alibaba announced earlier in the day that Chairman and CEO Daniel Zhang would step down in early September.
    Atmus Filtration — Shares rose 5.5% after Wall Street firms Goldman Sachs, Bank of America, JPMorgan Chase and Wells Fargo initiated coverage at buy or equivalent ratings. The stock debuted on the public markets last month.
    SoFi Technologies — Shares fell 1.2% Tuesday. SoFi stock has surged more than 70% over the past month after a debt ceiling deal between the Biden administration and Congress included a plan for student loan repayments to restart as soon as August.
    C3.ai — The artificial intelligence stock fell 2.2% Tuesday. The company is set to host its investor conference Thursday in New York City.
    — CNBC’s Jesse Pound, Alex Harring and Michelle Fox Theobald contributed reporting. More

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    Stocks making the biggest premarket moves: Alibaba, Dice Therapeutics, Avis and more

    Signage at the Alibaba Group Holding Ltd. offices in Beijing, China, on Tuesday, Jan. 17, 2023.
    Bloomberg | Bloomberg | Getty Images

    Check out the companies making the biggest moves in premarket trading:
    Alibaba — U.S.-listed shares fell 2.3% after the China e-commerce giant announced CEO Daniel Zhang was stepping down and will be replaced by Eddie Wu, one of Alibaba’s co-founders. The move follows the company’s announcement in March it was restructuring its business into six business groups.

    Atmus Filtration Technologies — Shares of the air filtration company rose more than 2% after a slew of analysts initiated coverage with bullish ratings, including JPMorgan. The bank said Atmus trades at a “deep discounted valuation vs. peers, despite >80% of aftermarket mix, while its planned expansion into industrial filtration should bridge the valuation gap vs. direct filtration peers over time.”
    Dice Therapeutics — The biopharmaceutical stock soared 37.7% after Eli Lilly said it was acquiring the company for $48 per share, or about $2.4 billion, in cash.
    Avis Budget — Shares added 3.5% in light volume following an upgrade by Morgan Stanley to overweight from equal weight. Analyst Adam Jonas also upped his price target to $230 from $182, suggesting 12.6% upside. Jonas cited Avis’ proven track record of fleet risk management and lower operating expenses relative to sales.
    Philip Morris International — Shares of the tobacco company rose 1.5% in premarket trading after Citi upgraded Philip Morris to buy from neutral. Investors are undervaluing the growth of smoke free products, according to Citi.
    Warner Bros Discovery — The media and entertainment conglomerate’s stock slid 1% after its movie “The Flash” took in an estimated $55 million during its first three-day weekend, less than the $75 million to $85 million the industry had expected.

    Carnival — Shares moved 1.5% higher in the premarket, building on gains made last week when it was the S&P 500’s best performer. Cruise stocks are soaring this year as the companies recover from the Covid pandemic — the last in the travel industry to do so.
    — CNBC’s Jesse Pound contributed reporting. More

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    Blinken says he failed to revive military-to-military talks with China

    U.S. Secretary of State Antony Blinken told reporters Monday that in his meetings in Beijing, he “repeatedly” raised the need for direct communication between the two countries’ militaries.
    “At this moment, China does not agree to move forward with that,” he said, noting the U.S. would keep working toward restoring those communication channels.
    An issue for the Chinese is that the U.S. has sanctioned Li Shangfu, China’s minister of national defense.

    Blinken’s trip to Beijing over the last two days — the secretary’s first under the Biden administration — marked a resumption of high-level U.S.-China government meetings after a tense four-plus months.
    Aly Song | Reuters

    BEIJING — U.S. Secretary of State Antony Blinken said Monday he failed to revive military-to-military talks with China, despite earlier hopes of reopening that communication channel.
    Blinken’s trip to Beijing over the last two days — the secretary’s first under the Biden administration — marked a resumption of high-level U.S.-China government meetings after a tense four-plus months.

    Military communication had dropped off during that time.
    China’s Defense Ministry declined a call with its U.S. counterpart in early February after the discovery of an alleged Chinese spy balloon over U.S. airspace. Both countries’ defense heads attended an annual event in Singapore earlier this month, but they did not have a formal meeting.
    The balloon incident delayed Blinken’s visit to Beijing by more than four months. The secretary arrived Sunday and had meetings with Chinese President Xi Jinping, Director of the Chinese Communist Party’s Central Foreign Affairs Office Wang Yi, and State Councilor and Foreign Minister Qin Gang.
    Blinken told NBC News on Monday that the spy balloon “chapter should be closed.”

    He also told reporters Monday that during the meetings, he “repeatedly” raised the need for direct communication between the two countries’ militaries.

    “I think it’s absolutely vital that we have these kinds of communications, military to military,” Blinken said. “That imperative, I think, was only underscored by recent incidents that we saw in the air and on the seas.”
    “At this moment, China does not agree to move forward with that,” he said, noting the U.S. would keep working toward restoring those communication channels.
    The U.S. shot down the alleged Chinese spy balloon in February. Beijing maintains it was a weather balloon that blew off course.
    Earlier this month, the U.S. Indo-Pacific Command said a China warship came within 150 yards of a U.S. destroyer in the Taiwan Strait.
    Beijing considers Taiwan part of its territory, with no right to independently conduct diplomatic relations. The U.S. recognizes Beijing as the sole government of China but maintains unofficial relations with Taiwan, a democratically self-governed island.

    U.S. sanctions at play

    An issue for the Chinese is that the U.S. has sanctioned Li Shangfu, China’s minister of national defense.
    The U.S. sanctioned Li in 2018 while he was head of China’s Equipment Development Department and oversaw Chinese purchases of Russian combat aircraft and equipment.
    When asked in May whether those sanctions would be lifted, even for negotiation purposes, the U.S. State Department spokesperson said no.
    “You can’t have sanctions on one side” and discussions on the other, said Shen Yamei, director and associate research fellow at state-backed think tank China Institute of International Studies’ department for American studies. That’s according to a CNBC translation of her Mandarin-language remarks.
    She generally described Blinken’s trip to Beijing as a “very good turning point.”
    Shen previously told CNBC that Beijing declined to pick up a military hotline phone call because doing so would be an acknowledgement that the situation was tense — and prompt more extreme U.S. action.
    China frequently didn’t answer the phone — a hotline set up for emergencies.
    Leading up to Blinken’s trip to Beijing, the U.S. State Department said the secretary was set to meet with “senior [People’s Republic of China] officials where he will discuss the importance of maintaining open lines of communication to responsibly manage the U.S.-PRC relationship.”
    On Monday, Blinken said that following his trip, other senior U.S. officials would soon likely visit China, and vice versa.
    He said he thought there was “a positive step” toward responsibly managing the U.S.-China relationship through the discussions of the last few days. More