Xi Pledges ‘Heart-Warming’ Steps to Attract Foreign Capital

(Bloomberg) -- Chinese President Xi Jinping pledged to make it easier for foreigners to do business in his country, in highly anticipated remarks delivered to a major summit, as corporate confidence wanes in the second-largest economy.

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The Chinese leader vowed his nation would create a “world-class business environment” and improve mechanisms for protecting the rights of international investors, in a written speech published Thursday at a CEO forum being held in California.

“We will also take more ‘heart-warming’ measures, such as improving the policies on entry and stay of foreign nationals in China,” he said, adding that access to financial, medical and electronic payment services would be smoothed. “All this is designed to make it easier for foreign companies to invest and operate in China.”

The normally stolid Xi has projected a softer, more personable side in San Francisco. Hours after reminiscing with President Joe Biden over his first trip to the US 38 years ago, Xi on Wednesday publicly accepted an NBA team’s jersey from California Governor Gavin Newsom and indicated Beijing would send pandas to US zoos.

Gifting pandas is a soft power win likely to resonate with the “American people” — a group Xi mentioned more than a dozen times in his speech Wednesday to big names including BlackRock Inc.’s Larry Fink and Stephen Schwarzman of Blackstone Inc. “The tree of our peoples’ friendship has grown tall and strong,” he said, in typically poetic language. “It can surely withstand the assault of any wind or storm.”

Read: Fink, Schwarzman Get Coveted Seats at Xi’s Dinner Table in US

Despite Xi extending an olive branch to foreign investors, organizers of the CEO summit announced Thursday he would not be able to attend the event in person and would instead deliver written remarks.

Xi is making his first trip to the US in six years at a critical moment: China’s economy is slowing after decades of high-speed growth, while fraught ties with the West are driving away foreign capital, as US tech curbs and European trade probes create an unstable environment.

China’s most-powerful leader since Mao Zedong brushed aside such problems, saying the economy had been “turning for the better” this year and had one of the world’s highest growth rates. While the economy is on track to hit the government’s annual target of about 5% growth, a worsening property market has fueled expectations Xi will have to roll out more stimulus to keep things humming.

The ruling Communist Party’s own policies haven’t helped reassure foreign investors in recent years. Its abrupt policy swings hammered some sectors, Covid controls closed borders during the pandemic and national security curbs have stoked worries among the foreign business community.

Xi’s speech to the Asia-Pacific Economic Cooperation summit seemed to address some of those concerns. His vow to promote the “free and orderly flow of data in compliance with the law,” seemed to respond to new data laws that have sparked widespread anxiety about how multinationals could operate in the Asian powerhouse.

China has begun to respond to the complaints of foreign firms about the lack of transparency and clarity of new laws controlling the international movement of data. In September, authorities rolled out new rules, and “companies are waiting eagerly for these positive signals to be translated into action,” according to a report this week from the European Union Chamber of Commerce in China.

Hours before China released Xi’s written speech, an official in its Ministry of Commerce said at a briefing in Beijing that the authorities are carrying out a campaign to screen and remove potential discriminative rules and measures against foreign companies.

“The aim is to create a fairer market competition environment for foreign-invested firms and stabilize their expectation and confidence in investing in China in the long term,” He Yadong said,

Minister of Commerce Wang Wentao will meet with his US counterpart Gina Raimondo on the sidelines of the APEC meetings to “discuss how to implement the important agreements reached by the two state leaders to resolve key issues in bilateral trade relations,” he added.

Xi’s speech Thursday marked his most direct discussion of the Chinese economy at the event. His 30-minute address to hundreds of executives on Wednesday night, and meeting with Biden earlier that day, focused more on casting China as a peaceful nation and easing tensions with Washington.

China maintains a “negative list” of sectors foreign investors are restricted or banned from having a stake in, such as compulsory education, news organizations, and the exploration and mining of some metals.

Pledges to reduce that tally were nothing new. The government has revised the list down every year since 2017 through 2021, loosening curbs in industries such as securities, banking and car manufacturing.

Amy Celico, partner at Albright Stonebridge Group, who attended the Chinese leader’s soiree with business heavyweights said she believed Beijing had been waiting to assess if the talks with Biden justified more concrete action on commercial issues.

“Certainly, that’s what CEOs are hoping — that yesterday has laid the groundwork,” she said. “Now, let’s get down to real commercial issues that we need to see progress on.”

--With assistance from James Mayger and Philip Glamann.

(Updates with details from China’s commerce ministry briefing.)

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