In an address to major global business leaders, Chinese President Xi Jinping urged foreign investors to have faith in China’s business prospects, the latest move to revive the world’s second-largest economy that has been dragged down by a property bust and a loss of momentum.
“China has always been and will certainly be an ideal, safe and promising investment destination for foreign investors,” Xi told executives, including Akio Toyoda, chairman of Toyota, Lee Jae-yong, chairman of Samsung Electronics and Stephen Allen Schwarzman, CEO of investment firm Blackstone.
China remains a major exporter of products to countries around the world and boasts a domestic market of 1.4 billion people. However, massive overbuilding in the property sector has tied up trillions of dollars in capital, sapping business and consumer confidence and depriving the economy of its past vitality, while a tariff war unleashed by the U.S. is compounding those problems.
Private businesses, which provide a large share of growth and jobs in the country’s state-dominated economy, have borne much of the burden after years of regulatory crackdowns have shaken the confidence of entrepreneurs and other investors.
China's unprecedentedly tough response to the COVID-19 outbreak also shut down business for much of three years and some sectors of the economy have yet to recover, particularly where global supply chains are involved.
Yet, Xi, considered something a sceptic when it comes to inviting in overseas businesses, said foreign investors could have confidence that “the door of opening up will only open wider and wider. The policy of utilizing foreign investment has not changed and will not change,” he said.
“China contains huge investment and consumption potential,” he added.
North Korea deployed 3,000 troops to Russia, says South Korea
China has set an economic growth target of about 5% for this year, the same as last year and a level that analysts said would be difficult to achieve.
The government has said it would attempt to stimulate the roughly $20 trillion economy by borrowing more money for a slew of initiatives, such as giving 300 billion yuan ($41.3 billion) in rebates to consumers who trade in old cars and appliances for new ones. But much of the borrowing will go to supporting the housing market and local governments weighed down by debt.
What is clear is that a trade war with the United States has left the outlook for the coming months uncertain. Trump has raised tariffs on imports from China twice since taking office in January, leaving them at 20% across-the-board. China has shown no sign of backing down, retaliating with tariffs on U.S. goods.
Xi did not mention the tariffs directly, but appeared to be referring to the importance of stable trade terms by saying: “Blowing out other people’s lights will not make your own lights brighter. Blocking other people’s paths will eventually block your own paths.”For now, however, China is seeking to portray itself as “an ideal, safe and promising investment destination for foreign investors,” he said.
“Going with China is going with opportunities. Believing in China is believing in tomorrow. Investing in China is investing in the future,” the president, who has made himself leader for life and also heads the ruling Communist Party, said.
Others in attendance Friday included Amin H. Nasser, president of Saudi Aramco; Sherard Louis Cowper-Coles, the chair of China-Britain Business Council; Oliver Zipse, BMW CEO and Ray Dalio, chief investment officer of hedge fund Bridgewater Associates.