China’s Xi Jinping is known for his tough leadership style, brooking no dissent, purging corrupt officials and attacking what he sees as US hegemony. But the country’s most powerful man since Mao Zedong took on the role of salesman-in-chief this week as he sought to persuade a group of visiting US chief executives that China was still a good investment.
A friendly and relaxed Chinese president received the group of 18 Americans — who included Chubb’s Evan Greenberg, Blackstone’s Stephen Schwarzman and Qualcomm’s Cristiano Amon — at the Great Hall of the People, where they held a photo shoot before he took their questions for nearly two hours. Those present said the performance was unprecedented for Xi, who is usually more stiff and formal on official occasions.
“It was very warm. You know, he was seeking to persuade,” said Steve Orlins, president of the National Committee on US-China Relations, and one of the attendees and organisers of the visit.
“I mean, there were trillions of dollars of revenue in there. So it was a lot of money and a lot of people who are invested and have to decide: will they increase their investment? So clearly, he was he was there to say, our economy is resilient. We’re doing better. We’re going to do better,” Orlins said.
The meeting comes as China’s economy has been struggling to regain its footing, with a deep property slump undermining domestic demand and trading partners complaining that cheap Chinese exports are threatening to undercut their domestic industries.
The economic troubles and growing geopolitical tensions with the US have driven down foreign direct investment in China, with inflows last year falling to their lowest level since the 1990s.
But since the middle of last year, China has been seeking to stabilise ties with the US, with Xi meeting President Joe Biden in San Francisco in November. During that trip, Xi also attended a dinner with US business leaders and agreed to do a follow-up in China this year.
European business leaders, who were in Beijing this week for the flagship annual investor conference, the China Development Forum, were therefore not invited, Orlins said.
Xi, who had met most of this week’s US visitors previously, engaged in a “real discussion” for one hour and 40 minutes, with prepared remarks lasting only 12 minutes, Orlins said. State television showed a smiling Xi gesturing to the delegates, seated around a vast table.
While Xi was adamant that the economy was still on track, it was not “going to go back to the old model”, Orlins cited the president as saying.
Xi has often said that China must move towards what he calls “high-quality growth” — eschewing debt-fuelled investment in real estate and moving up the manufacturing value chain. Xi told the executives that while real estate might remain a problem, the government would provide housing for lower-income earners and the elderly.
“He said: ‘We recognise we have problems. We know that. But we think we’re resilient. We’re still contributing 30 per cent to world GDP growth. So it’s a good place to invest’,” Orlins said. “So he was encouraging people. He was selling to the audience and, in my view, it was very persuasive.”
Orlins said Xi also touched on issues ranging from the importance of the private sector, reform and to concerns about the “over-securitisation of the relationship” with the US. Xi’s message was that “security needs a clear boundary”, Orlins said.
Xi also said China did not seek to supplant the US’s role in the world and spoke “passionately” about China’s efforts to restrict fentanyl precursors — a key US request. The president recalled China’s problems with drugs in the past, an apparent reference to the opium wars between Britain and China in the 19th century.
The meeting in Beijing is part of an international push by China to rekindle investor sentiment, with the Shanghai and Shenzhen stock markets also leading a roadshow in the US this week. “China is stabilising growth and restoring confidence,” the invitation to that event said.
An official from the market regulator, the China Securities Regulatory Commission, told investors during the roadshow in New York that the economy had three new growth drivers, including “creating new excellence in manufacturing, increasing consumption and expanding export markets”.
But efforts at rapprochements by business leaders in the two countries are likely to spark a backlash from hawks in the US Congress and their counterparts in Beijing, analysts said.
Critics in the US accuse Beijing of trying to use American business to divide opinion in Washington. Security officials in Beijing, meanwhile, worry that the US wants to contain China’s rise.
Orlins countered that while the meetings might create “distance” between the US government and business, their “primary purpose is to rekindle enthusiasm in the foreign business community for investing in China”.
“Many businesses are dissatisfied with both governments and believe meetings with each government can improve relations, benefit both peoples and help their businesses,” he said.
“Every participant is a patriotic American and believes these meetings contribute to a more peaceful and prosperous world.”
Beijing’s attempts to revive foreign investor confidence are genuine, analysts said, though it is still unclear how much it wanted to prioritise security over development.
A day after the meeting with the chief executives, one of Xi’s top lieutenants, Zhao Leji, reiterated at an international conference in southern China Beijing’s accusations that the US wanted to start a new cold war. The same day, China’s spy agency, the Ministry of State Security, raised new allegations that some international consultants were being used by hostile foreign intelligence agencies.
“It’s been a year of mixed signals and maybe Xi’s trying to finally get some clarity into Chinese messaging,” said Richard McGregor, senior fellow at the Lowy Institute in Sydney.
But this was difficult, even for the Chinese president. “Xi’s built his own national security supertanker and it’s hard even for him to turn it around.”
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