On Wednesday night, Xi Jinping is having dinner with American CEOs during a period of growing US scepticism over China’s more stringent business regulations and worries about the nation’s faltering economy.
The last time Xi hosted US businessmen on US territory, eight years ago, things were very different.
While downplaying worries about China’s state control over its economy, which was then generating a 7% GDP growth rate, American CEOs went to meet the Chinese president in 2015.
A visit to Microsoft’s (MSFT) campus was part of the trip, and Xi was shown standing next to a number of CEOs who had gathered to meet him, including Tim Cook, the CEO of Apple (AAPL), Mark Zuckerberg, the CEO of Meta (META), and Jeff Bezos of Amazon (AMZN).
Reports from the trip state that Zuckerberg greeted Xi first and spoke Mandarin, demonstrating his eagerness to lift Facebook’s prohibition in China at the time. “Did you feel the room shake?” Cook’s statement regarding Xi’s arrival was also cited.
But this week, the CEO of Meta is avoiding the Asia-Pacific Economic Cooperation (APEC) conference in the San Francisco Bay Area, as Facebook is still prohibited in China and Mark Zuckerberg is reportedly suffering from an ACL rupture. After years of poor ties with China, he is one of few leaders who has decided not to meet with Xi.
Stanford researcher Herbert Lin stated, “At that time, in 2015, we were a lot more optimistic,”
According to Lin, businesses in earlier times were fully aware of the hazards, but they just reasoned that they couldn’t pass up the Chinese market.
now, “that belief is now a lot more shaky.”
In the upcoming years, tensions between the US and Chinese governments might only get worse due to ongoing geopolitical difficulties as Xi attempts to retain strict political restrictions while also trying to stop money flight from the nation. According to new figures this month, foreign direct investment in his country has gone negative.
The pomp and grandeur that accompany any visit is certain to be there this time around, but it is generally anticipated that Xi’s encounters with CEOs would take on a distinct tone and tenor.
Satya Nadella, the CEO of Microsoft, personally showed Xi around the Redmond site of his business in 2015. Possibly the most noteworthy event on his schedule this week is a panel discussion with the presidents of South Korea, Chile, Thailand, and Vietnam, as those countries try to lure some US investment away from China.
Undoubtedly, Microsoft has been present in China for many years, and in recent remarks, Nadella has expressed optimism about the region.
As he gets ready to address the gathered CEOs on Wednesday night at a dinner apparently hosted by the US-China Business Council and the National Committee on US-China Relations, Xi is undoubtedly up against a tough task.
Director at Rhodium Group Reva Goujon recently said in a client note that Beijing is attempting to refute a notion in the US that China has become “uninvestable.”
However, she clarified in an interview that Xi still has chances to present herself to CEOs.
“If you’re in the EV business, for example, this is still the largest EV market in the world,” she stated.
Xi’s address on Wednesday, according to Peterson Institute for International Economics China specialist Nicholas Lardy, “will say lots of good things about how open China is [but] the reality has moved in the opposite direction.”
Lardy stated that Xi has prioritised state control for years, and many in the business world are now recognising this trend, despite his rhetoric and some willingness to encourage the infusion of international money and talent.
The speaker went on, “I don’t think there’s going to be much uptake” for Xi’s message.
The White House anticipates that Xi’s meeting with US President Joe Biden on Wednesday would contribute to the stabilisation of the relationship between the two nations.
White House officials have cautioned that there is little likelihood that the bilateral meeting will result in significant progress on economic issues ranging from export restrictions on semiconductors to trade conflicts.