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Xi meets US CEOs to stem China’s economic slump

Statistics in recent years have shown that China’s economy is declining and a meeting with more than a dozen CEOs from the US, reflects its efforts to mitigate the pressing issue.

Last week, plenty of eyebrows were raised after it was revealed that China’s President Xi Jinping met with some of the top US CEOs. The meeting was set conveniently as over 100 CEOs globally were present in Beijing for the annual China Development Forum.

Tensions between the US and China have become a focal point of the geopolitical landscape, marked by strategic competition and disagreements on various fronts. The recent unexpected meeting adds a layer of intrigue to the already complex relationship between the two nations.

This strategic engagement underscores China’s interest in leveraging the expertise and resources of top US businesses to advance its economic goals and foster international cooperation.

Details of the meeting

On Wednesday, in an effort to attract foreign businesses to its economy – that remains one of the biggest globally – the President met with not just CEOs but academics too. Reports state that the gathering fell nothing short of candor as Xi explained the concerns with the Chinese economy and its decreasing foreign direct investments.

CEOs in attendance included Stephen Schwarzman, co-founder of Blackstone; Raj Subramaniam, President of FedEx; Mark Carney, Chairman of Bloomberg; Cristiano Amon, President of Qualcomm, and many more.

The meeting aimed to address concerns about declining outside investment in China due to factors like slower growth, regulatory crackdowns, and questions about the country’s long-term prospects. Throughout, Xi maintained his optimism and a desire for a better future between the US and China.

Reports from the China Central Televisions showed the attendees attentively hearing out the Chinese leader as he addressed them.

China’s declining economy

There have been debates on the state of the nation’s economy with some saying that it is showing signs of decline while others say that China is simply in a ‘Great Transition’. The pandemic seemed to have exacerbated its economic challenges which had ignited in the year prior.

Historically reliant on investment-driven growth, China now grapples with inefficiencies in its investment strategies, particularly in sectors like real estate where speculative activities have led to vulnerabilities. Its real estate investment is projected to fall by another 30% in the coming 10 years.

The International Monetary Fund released a report early this year that predicted the nation’s economic growth to drop by 0.6% from last year. By 2028, the organization predicts the value to only stand at 3.4%, a significant drop from 5.2% in 2023.

Moreover, its foreign direct investment fell by $30 billion at the beginning of this year alone. This goes to show that the nation has effectively slipped from its position as the primary target for strategic long-term investments.

The decline in China’s growth, coupled with challenges such as a property crisis, weak spending, and high youth unemployment, has led to concerns about its ability to maintain its status as a key driver of global growth.

The slowdown in China’s economy not only affects its domestic market but also has ripple effects on the global economy due to its interconnectedness with other economies.

Impacts of the meeting

The US-China relationship has been marked by confrontations over issues such as intellectual property rights, market access, cybersecurity, and territorial disputes, creating a complex and multifaceted dynamic that has implications for global stability and economic growth.

During a visit to China last year, Commerce Secretary Gina Raimondo was informed by US firms that the country had become too risky for investment, making it ‘uninvestable.’

However, not all hope is lost for the Eastern superpower as during a summit held in San Francisco last November, Biden and Xi came to terms with economic cooperation.

Even Tim Cook, CEO of Apple, reassured the leader that China was still one of its key markets after the company shifted its production to other nations like India. His confidence in Apple’s national operations is not misplaced as China is one of the company’s biggest vendors with 17.3% of the market share.

The Chinese Ministry even stated that Commerce Minister Wang Wentao encouraged Cook to persist in opening up the Chinese market and working towards mutual development with China.

Additionally, the chosen CEOs met with Chinese President Xi Jinping as they hailed from various industries, including finance, technology, logistics, and communications.

With their myriad influential positions, they can stimulate investments in these specific industries, which, if executed effectively, could lead to an economic surge in China.