Xi Jinping’s Sales Pitch to American CEOs Amid China’s Dismal Business Environment

Attendees are seen at the China Development Forum in Beijing on March 25, 2024. (Pedro Pardo/AFP via Getty Images)

Recently, Chinese leader Xi Jinping assumed the role of a “salesman” when he met with American business and academic representatives, attempting to portray China as a place with investment potential amid the current economic downturn in China.

On March 27, Xi Jinping met with various American CEOs and academics at the China Development Forum at the Great Hall of the People in Beijing. Among them were Steve Schwarzman, co-founder and CEO of the global private equity firm Blackstone, Raj Subramaniam, CEO of FedEx, and Cristiano Amon and Hock Tan, CEOs of the two major chip manufacturers Qualcomm and Broadcom, respectively.

The China Development Forum, hosted by the State Council of the Chinese Communist Party (CCP), typically involves a meeting between the Chinese Premier and foreign business leaders after the forum concludes. However, this year, it was suddenly announced that Xi would preside over the meeting, and the timing was extended to two days after the forum ended, breaking past CCP conventions.

Painting a False Picture

Before the forum, the CCP was eager to introduce new policies to attract foreign investment and boost the economy. According to CCP’s official data, foreign investment in China in 2023 dropped by 8 percent compared to the previous year, and the decline was even more significant in the first two months of this year. Meanwhile, China’s economic growth rate dropped to 5.2 percent in 2023, reaching one of the lowest levels in decades.

Additionally, geopolitical tensions between the United States and China over issues such as technology, trade, and human rights have further strained relations between the world’s two largest economies. Furthermore, the CCP implemented an “anti-espionage law” in 2023 and conducted raids on several foreign firms in China, forcing more foreign companies to accelerate their exit from the Chinese market

Facing these less-than-optimistic circumstances, Xi still expressed affirmation of China’s economy when meeting with these American business executives. According to reports by the Chinese state media, Xi described China’s economy as “healthy” and “sustainable,” refuting predictions that China’s economy has passed its peak. He also claimed that U.S.-China relations cannot return to the past but can have “a better future” and that Beijing will continue to work to improve the business environment.

Skepticism of Xi’s Intentions

On March 28, former CNBC anchor Michelle Caruso-Cabrera wrote on social media platform X that she spoke with a CEO who attended the China Development Forum and met with Xi. The CEO stated that there is no indication that the CCP is abandoning economic centralization.

She reported that Xi claimed that the United States was wrong to restrict China’s economic development through semiconductor bans and that the CCP does not pose a threat to the United States.

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Cheng Ping Cheng, a professor of finance at Taiwan’s National Yunlin University of Science and Technology, said that Xi’s meeting with American business leaders reflects a few major issues.

Mr. Cheng told The Epoch Times that Xi did not accept the Western market economy, democracy, and free competition. Despite speculation that his recent meetings with foreign corporate executives were due to the poor state of the Chinese economy, he has not shown any willingness to change or soften his stance.

Secondly, Xi Jinping emphasized that the CCP will never abandon economic centralization, indicating that he values state-owned enterprises extremely highly and is placing them at the core of China’s economy. However, American business leaders understand that in the United States and other Western or developing countries, they possess strong competitiveness because governments maintain an open attitude toward private enterprises and free competition. Furthermore, all economics research shows that in the past century, state-owned enterprises have rarely succeeded or made large-scale profits. Therefore, Xi Jinping’s proclamation of never giving up economic centralization undoubtedly sends an extremely negative signal to foreign business leaders.

“Therefore, several major trends can be inferred from these situations, which are very pessimistic for [business leaders] from the West,” Mr. Cheng said. “In terms of specific policies, Xi Jinping did not advance towards a free market, free competition, or new policies to promote [private] enterprises but moved in the opposite direction. Compared to the [Chinese regime’s] officials, scholars, and journalists, these [American] CEOs understand better how the economy should develop and how enterprises should improve their competitiveness. Therefore, all the signs indicate that these foreign companies hold extremely pessimistic attitudes [toward China’s economy] and generally believe that the future development prospects are overshadowed by [the CCP’s regressive policies].”

He also explained that the trend of foreign capital withdrawing from China points to an obvious trend. China’s economy will continue to decline, and the country may experience negative economic growth. However, due to the complicated interests and transactions involved in China’s huge economic scale, the complete exit of foreign capital and an economic collapse may not happen too soon.

“The CCP is still giving out some attractive offers that other ordinary countries cannot afford,” Mr. Cheng said. “For some political figures or companies in Western countries with very close relations to the Chinese regime, there still might be some offers that they cannot refuse.”

Xin Ning contributed to this report.