Xi Courts US CEOs Amid China’s Economic Pains, Foreign Capital Flight

(L–R) Evan Greenberg, chairman of National Committee on U.S.–China Relations, Graham Allison, founding dean of Harvard's John F. Kennedy School of Government, Wendell Weeks, Corning's CEO, in Beijing, China, on March 27, 2024. CCTV Via Reuters/Screenshot via The Epoch Times

China’s communist leader Xi Jinping is courting U.S. business leaders in Beijing—the regime’s latest effort to woo back foreign investors amid waning confidence about the world’s second-largest economy.

At a meeting hall on the western edge of Tiananmen Square, Xi met with about 20 U.S. executives and academics, and urged businesses to continue investing in China while insisting that its economy hasn’t peaked.

Among the attendees were Stephen Schwarzman, CEO of private equity firm Blackstone; FedEx CEO and President Raj Subramaniam; Cristiano Amon, president of chips manufacturer Qualcomm; Evan Greenberg, CEO of insurer Chubb; Graham Allison, founding dean of Harvard’s John F. Kennedy School of Government and former assistant secretary of defense under the Clinton administration; and Mark Carney, Brookfield Asset Management and Bloomberg Inc. chairman.

Clips and readouts released by China’s state media showed a smiling Xi telling participants that China’s growth prospects under the Chinese Communist Party (CCP) are “bright” as the U.S. delegates attentively took notes.

The meeting, organized by multiple pro-Beijing U.S. groups upon the close of the annual China Development Forum, came after a year of a worsening economy and a significant flight of foreign funds. Anti-espionage laws, exit bans, raids on U.S. firms, and U.S.–China tensions have only fueled investors’ anxieties.

In February, foreign direct investment to China sunk to a 30-year low of $33 billion, marking an 82 percent drop from the previous year. The money flowing to China from January to February was nearly one-fifth lower year on year.

Xi, in his New Year’s Eve speech, made a rare acknowledgment about the country’s economic woes, including struggling businesses and job seekers’ troubles to find work. In an address in early March to China’s ceremonial legislature, Premier Li Qiang said the “foundation for a sustained economic recovery is not solid enough,” pointing to tight local government budgets, weak technological innovation, outside uncertainties, and “many risks and hidden dangers.”

The premier didn’t host a panel session at the end of the forum on March 25, breaking a tradition that lasted more than 20 years. An expected annual press conference following the parliamentary meeting also got scrapped without explanation.

Xi’s meeting with U.S. executives also followed the conclusion of the annual China Development Forum, which saw about 100 world leaders, including heads of the International Monetary Fund and World Bank, at the Chinese capital. Chinese state media noted that a third of them were from the United States.

CCP authorities have stepped up their push to attract more foreign investment in recent months. The State Council in mid-March issued a measure promising perks for foreign investors on housing, language training, and their children’s education.

Some China analysts are skeptical about the sincerity of Beijing’s efforts.

“You can’t just listen to what he says,” Ding Shuh-fan, professor emeritus at Taiwan’s National Chengchi University, told The Epoch Times. “You watch what they do.”

Feng Chongyi, an associate professor in China studies at the University of Technology, cautioned that the general trajectory of global sentiment isn’t going in the CCP’s favor.

The business leaders follow the money, and the costs and risks in the CCP’s Chinese market are both too great to make them stay, he said.

A young couple walk by a construction site near office buildings in the Central Business District in Beijing on March 2, 2024.AP Photo/Andy Wong

Amid the regime’s increasing scrutiny on data control and espionage, Beijing in February broadened its state secrets law to tighten control of what it deems as sensitive information, introducing the concept of “work secrets” that further heightens worries for foreign businesses.

Last year, authorities also raided the offices of U.S. consultancy firms and arrested their workers, later imposing a $1.5 million fine on the Beijing office of due diligence firm Mintz for engaging in “foreign-related statistical investigations” without the communist state’s approval.

In May 2023, Beijing sentenced a 78-year-old American to life imprisonment on espionage charges. China’s foreign ministry confirmed the earlier espionage conviction of a UK businessman in January. According to a report from the same month, China’s exit bans barred about two dozen U.S. citizens from leaving China between 2019 and 2021.

The series of crackdowns, on top of China’s record high youth unemployment rates and escalating political infighting, send a conflicting signal to foreign businesses, according to Lai Jung-wei, who teaches international relations and East Asia studies at Lunghwa University of Science and Technology in Taiwan.

“[They] keep telling us to invest in China,” he told The Epoch Times of Beijing. “But we have to see if there’s a system in place to back up their assurances.”

U.S. Ambassador to China Nicholas Burns expressed a similar view to Mr. Lai recently.

“Some senior Chinese government officials say private-sector investment is welcome in China, your investment will be protected. But then, these companies are also hearing a different message,” he said in a media interview. “I think the voices that they’re hearing from the government here in China about national security, they’re the strongest and loudest voices right now.”

Former ambassador to NATO Nicholas Burns gives his opening statement during the Senate Foreign Relations Committee hearing on his nomination to be the U.S. ambassador to China, on Capitol Hill in Washington on Oct. 20, 2021. Elizabeth Frantz/Reuters

Recent polls seem to confirm these observations.

In January, two months after a throng of business leaders spent thousands to dine with Xi during the San Francisco U.S.–China summit, more than 100 members of the Beijing-based American Chamber of Commerce said in a survey they had no plans to increase their investments in China.

More respondents said they consider China less welcoming to businesses, and one-third of 343 respondents said they were treated unfairly compared with their Chinese counterparts.

Judging by the CCP’s current economic and regulatory conditions, Mr. Lai said that leaving China seems more “mainstream.”

In China, “politics dominates everything” and the economy has become secondary, he said.

He added, “So how do they hope to improve the Chinese economy?”

Luo Ya contributed to this report.