Midwest spy balloons, warnings from Beijing of conflicts when Washington “doesn’t brake” and a fierce congressional scrutiny of investment in China – there are few axes for US businesses to attend Beijing’s flagship investment conference.
However, this weekend, American business chiefs, including former Secretary of State Henry Kissinger, investor Ray Dario and Proctor & Gamble’s John Mawler, head to Beijing for what was billed as an opening-up party after a strict zero-covid policy.
Many of the businesses attending the China Development Forum will be meeting Beijing officials for the first time in three years, seeing the operation of the mainland. But events like Davos focus on “opportunity and cooperation” as China’s economy recovers from the pandemic, but the winds facing US business interests in China also come from Washington.
“They are lobbying here for free on behalf of China, and now they’re making a lot of money from their investments, factories and their involvement,” Florida Sen. Marco Rubio said this month about US companies and individuals operating in China.
A complete list of participants is not available. Government regulators and policymakers are expected to be there, perhaps Li Qiang, Xi Jinping No. 2, and the head of the Chinese cabinet. Participants and speakers on the panel include BHP CEO Mike Henry, president of China-owned bank Liu Jin, PWC Global Chair Bob Moritz, Zhao Dong, president of Chinese oil company Sinopec, HSBC chief Noel Quinn, and several major scholars. People from the US are expected to attract scrutiny at home.
Former US Secretary of State Henry Kissinger left Xi Jinping at Beijing’s 2019 New Economy Forum © Jason Lee/AFP/Getty Images
“I don’t think Americans are going to sit down with it, but they’re probably going to stay in the background and do everything they can to get into the spotlight,” said Francis Basolino, managing partner at Alaris consultant in Shanghai.
Last month, Geoffrey Siebengartner, an official with the US Chamber of Commerce and director of government affairs and corporate responsibility for JPMorgan’s Asia-Pacific region, was the focus of Washington’s Select Committee after appearing in a video promoting Hong Kong. Beijing imposed national security law in 2020, spurring sharp criticism from the United States.
Following the controversy over Chinese balloons in US airspace, the incident cast cold on foreign mainland business communities already segregated by the country’s strict zero-covid policies.
In the past, the benefits of investment in China offset the perceived risk of technology transfer foreign companies, overreliance on markets and political criticism, said Duncan Clark, author and chairman of advisory firm BDA China. “The difference now is that businesses are facing greater scrutiny from Congress,” he said.
Senator Mark Warner, who chairs the Selection Committee on Intelligence News, said US Private Co., Ltd. is paying more attention to lawmakers’ concerns. “We had 40 business round table CEOs, and “You know, are you not going to bubble up the Taiwanese stuff?” he told reporters.
Shanghai-based global managing director Dennis DePaw, the global managing director of Roland Berger, a consulting firm speaking at the forum, suggested that “everyone is more cautious about the potential political impact of their existence here.”
“Are there any questions that argued by organizations like Congress, if not American sanctions, that my business is susceptible to, or that it is, sanctions?” he said. “I’m imagining what’s coming next.”
However, recent revenues are seeking from the US suggest that perceptions of geopolitical landscapes have been mitigated by optimism towards the Chinese market.
Seifi Ghasemi, CEO of Aviation Products & Chemicals, told Wall Street in February that the “political situation” had not affected its operations or the acceptance of Chinese customers’ products. Colgate-Palmolive in February told analysts that growth in China’s market share was a “beautiful story,” but Illinois Toolworks told analysts last year that China’s revenues exceeded $1 billion for the first time. “We feel very good about China.”
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Dale Buckner, chief executive of the Global Guardian, a security consultant, has urged “a more real conversation” about the risk of decoupling with China by Russia’s invasion of Ukraine, but added that he is unaware of companies leaving the country.
Geopolitical climate may intuitively encourage some companies to invest more in China’s supply chains, allowing businesses there to stand on their own in a separation scenario. Deloitte’s 2023 report suggested that there are multiple scenarios for a company, such as the establishment of a minority or minority joint venture of a majority or multinational corporation, depending on the severity of the decoupling.
“Undoubtedly, there is still the world’s most attractive growth market, for companies that can predict rapid and fundamental changes,” the report states.
Meanwhile, China’s new prime minister, Li, said this month that she was “a senior manager at multinational companies, including many American companies,” in her previous role as head of Shanghai.
“Some people in the US are trumpeting the idea of separation from China,” he added. “But how many people can really benefit from this kind of hype?”
A recent survey found that China’s US Chamber of Commerce found that records of more than half of the companies voted in China last year were not beneficial. But its president, Michael Hart, said this year, “it looks like the economy is moving in the right direction.”
He estimated that half of the world’s chief executives’ current harvest had not travelled to China due to the pandemic.
“The China Development Forum will be important to ensure that Europeans and a handful of US CEOs are (attending) what (attending),” he said.
