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Views from Bloomberg, the South China Morning Post and the East Asia Forum
U. S. CEOs are expected to meet with Chinese leader Xi Jinping next week, the Wall Street Journal reported on Thursday, signaling Beijing’s need for foreign capital as it works to revive its post-Covid economy.
Beijing appears to be becoming increasingly hostile toward foreign companies, cutting back on its presence in recent years, while global leaders have encouraged “de-risking” by China. But the country’s vast market span — and low prices for high-tech production — mean China will likely remain an invaluable production hub, especially as green technologies like EV batteries become more essential.
CEOs such as Apple’s Tim Cook and Pfizer’s Albert Bourla are expected to attend the China Development Forum in Beijing this weekend, but instead of talking to Chinese Premier Li Qiang, who is business-friendly as is the culture at the forum, they are expected to meet with Xi. Bloomberg reported. . . The “update” is a sign that Beijing is “committed to improving the situation of foreign companies,” a China expert at the Center for Strategic and International Studies told the outlet. This comes just weeks after Li’s annual press conference was held. Analysts told Reuters Xi needs to be more direct about the country’s economic narrative. “Breaking away from culture now is culture, it’s the new normal,” one economist told Bloomberg.
China hopes to lure foreign industry with “pilot-scale production,” where foreign corporations can “link arduous [Chinese] laboratory studies with mass production,” the South China Morning Post reported. These high-tech projects, basically in the field of vehicle batteries, solar panels, and semiconductors) are seen as the mainstay of China’s global economic output, as corporations offering low-end products look toward less expensive and hard-working markets, such as India and Vietnam. By convincing tech corporations that it has greater infrastructure to produce high-tech goods, China should “catch up in spaces such as synthetic intelligence, quantum computing, and biomedical manufacturing,” the SCMP reported.
The European Union passed the Net Zero Industry Act this year, which aims to source 40% of green technologies locally by 2030 and “de-risk” China. But “the lack of further investment from the EU budget” and allowing member states to make their own decisions on subsidies for the production of green technologies will end up undermining the EU’s single market philosophy and China as the EU’s main supplier of green technologies in East Asia. Brussels wants to strike a balance between “the energy transition and economic security,” while acknowledging that China’s role in achieving its goals is undeniable, the blog says.