Xi Jinping Begs Global CEOs to Stay in China

Chinese dictator Xi Jinping sent a letter to members of the Global CEO Council on Wednesday, presented by his state media as a triumphant boast of China’s economic strength.

To more skeptical eyes, the letter appeared as a plea for foreign companies to refrain from disengaging with China after the coronavirus pandemic, the oppression of the Uyghurs, the crackdown in Hong Kong, and China’s increasingly belligerent behavior on its land and maritime borders.

The “Global CEO Council” is a creation of the Chinese Communist Party that includes executives from 39 multinational corporations.

China’s state Xinhua news service reported that Xi’s letter included China’s pledge to “keep deepening reform and expanding opening-up, and provide a better business environment for the investment and development of Chinese and foreign enterprises.”

Xi strove to make China sound as attractive to foreign business as possible, deploying the Chinese Communist Party’s (CCP) shopworn canards about “win-win cooperation” and responsible global citizenship:

He said China will comprehensively implement major policies and measures aimed at ensuring the six priorities of employment, people’s livelihoods, development of market entities, food and energy security, stable operation of industrial and supply chains, and smooth functioning at the community level, and ensuring stability in the six areas of employment, finance, foreign trade, foreign investment, domestic investment and market expectations.

China will foster new opportunities and create new prospects for Chinese and foreign enterprises, Xi said, adding that those CEOs have made the right choice to stay rooted in China.

In today’s world, the interests of all countries are highly integrated, the human race is a community with a shared future that shares weal and woe, and win-win cooperation is the trend of the times, stressed the Chinese president.

China, he added, will be unswervingly committed to pursuing the path of peaceful development, making economic globalization more open, inclusive, balanced and beneficial to all, and promoting the building of an open world economy.

Xi wrote his missive in response to a letter from the Global CEO Council portrayed by Xinhua as swimming with praise for China’s fantastic handling of the coronavirus crisis, but the New York Post noted that the letter could also be read as a polite request for significant reform, and only 18 members of the council signed it.

The South China Morning Post (SCMP) said Xi’s promises were made against the backdrop of China’s announcement that its economy grew by 3.2 percent in the second quarter of 2020, rebounding from its worst contraction of the modern era, a 6.8 percent decline in the previous quarter.

The SCMP noted that despite the perky tone of Xi’s letter to his multinational business partners, Beijing’s “charm offensive strategy targeting foreign businesses” has been faltering badly since the crackdown in Hong Kong.

“As politicians in Washington and Brussels harden their stances against Beijing, the Chinese government is trying to woo multinational companies with promises of business opportunities to avoid a total breakdown of relations and to maintain its role in global value chains,” the SCMP wrote, referring to growing displeasure with China in the United States and Europe, and the possibility of new sanctions from China.

One problem facing Xi’s effort to keep foreign business in China is that no one really believes China’s economic reports, any more than prudent observers should accept its claims about coronavirus cases and deaths. The question is always how much of China’s claims investors will choose to believe enough to place their bets on.

The Associated Press (AP) on Thursday noted that China’s second-quarter report showed growth instead of contraction, but it was still “the weakest positive figure since China started reporting quarterly growth in the early 1990s,” and while some analysts generally agreed that continuing improvement could be expected for the rest of the year, trouble with the U.S. and European powers still looms.

“A potential stumbling block is worsening relations with the United States, China’s biggest national export market, over disputes about trade, technology, human rights and Hong Kong,” the AP wrote.

Consumer spending remains weak in China, which is not only a sign that internal optimism about the economy is not as strong as the CCP would like, but could also make China’s markets a bit less attractive to foreign companies eager to make sales in China. 

The CCP has a long history of using economic leverage to bully companies that do business in China, or robbing them outright once it can appropriate or duplicate their intellectual property, so the rewards have to be very good to make the risks appear reasonable. The Global CEO Council members who wrote to Xi seemed notably eager for the kind of reforms that would diminish the risk of doing business in China to make them commensurate with the diminished rewards.

Another problem facing Xi is that foreign CEOs have to shut down their consciences to do business in China. As the landmark Uyghurs for Sale report from the Australian Strategic Policy Institute (ASPI) made clear in March, China’s famous supply of cheap labor is made cheaper with slave labor. The Uyghur Muslims of Xinjiang province are among the prisoners China forces to work in its factories, a practice accelerated considerably during the coronavirus outbreak, when the CCP decided it was too dangerous for Han Chinese to show up for work.

U.S. Attorney General Bob Barr noted the cognitive dissonance of giving China a pass during remarks at the Gerald R. Ford Presidential Museum on Thursday. 

“Hollywood’s actors producers and directors pride themselves on celebrating freedom and the human spirit, and every year at the Academy Awards Americans are lectured about how this country falls short of Hollywood’s ideals of social justice – but Hollywood now regularly censors its own movies to appease the Chinese Communist Party, the world’s most powerful violator of human rights. This censorship infects, not only the versions of movies that are released in China, but also many that are shown in the United States theaters to American audiences,” Barr said.