Benzinga - by Shanthi Rexaline, Benzinga Editor.
Chinese President Xi Jinping met with several U.S. CEOs on Wednesday in an attempt to entice them back into the country amidst a slew of macro and geopolitical challenges. The leader of the world’s second-largest economy reportedly provided “tough answers” to the probing questions posed by the corporate leaders.
On the Economy: In a meeting that reportedly lasted one-and-a-half hours, Xi extolled the Chinese economy, according to a CEO who attended the meeting and chose to remain anonymous, as cited by CNBC contributor Michelle Caruso-Cabrera on X.
The Chinese leader purportedly asserted that the domestic economy has yet to reach its peak and expressed confidence in the country’s ability to address its challenges. Xi also emphasized that the government bears the responsibility of generating at least 10 million new jobs annually for recent graduates.
Notable attendees at the meeting included Stephen Schwarzman, Chairman and CEO of Blackstone, Cristiano Amon, President and CEO of Qualcomm, and Evan G. Greenberg, Chair of the National Committee on U.S.-China Relations Board of Directors.
On Sino-U.S. Relations: Xi also addressed the trade standoff between China and the U.S., particularly focusing on the semiconductor sector.
He reportedly criticized the U.S.’s efforts to constrain the Chinese economy, asserting that China does not pose a threat to the U.S.
The U.S. has imposed export bans on high-performance chips from companies like Nvidia and AMD to China, citing security concerns. The Asian powerhouse, however, has still been able to produce sophisticated chips at home. Xi reportedly cautioned against the U.S. impeding China’s growth.
On Taiwan: Xi reportedly expressed displeasure with the U.S.’s support of Taiwan’s quest for independence. While China regards Taiwan as one of its administrative regions, Taiwan considers itself an independent nation.
Xi reportedly emphasized that, just as China refrains from interfering with other countries’ borders, it expects the same treatment from others.
On Thucydides Trap: Xi warned against the inevitability of the Thucydides Trap and stressed the importance of avoiding it at all costs. The Thucydides Trap refers to the theory that a rising power’s emergence may lead to conflict with an established power, echoing the ancient Greek historian Thucydides’ observations on the Peloponnesian War.
On China’s Governance: Xi asserted that the governing system of China is not subject to change. Additionally, he emphasized China’s respect for other forms of government and urged reciprocal respect for China’s governance structure.
Why It Matters: China is the world’s second-largest economy and is renowned as the world’s factory due to its abundant and inexpensive labor force. Its massive population makes it a lucrative market for multinational companies, including those from the U.S.
The U.S. CEO, who spoke on condition of anonymity to CNBC, highlighted that despite the challenges, China is steadfast in its commitment to centralize the economy.
Chinese citizens are reportedly apprehensive, per the executive, viewing it as risky to be affluent in China. Consequently, they are divesting items considered ostentatious, such as private jets, and trying to “get their money out of the country.”
At the China Development Forum meeting held this week, the focus remained on bolstering large, state-owned enterprises, which dominate the economy, with “passing references” to the private sector and “very little reference” to climate change, renewables, or decarbonization, the executive added.
Earlier media reports on the meeting indicated Xi’s desire to mend the strained relationship with the U.S. while suggesting a recognition that the relationship may never return to “old ways.”
The iShares MSCI China ETF (NYSE:MCHI) rose 0.13% to $39.57, according to Benzinga Pro data.
Image made via photos on Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.