Businesses Lower Their Expectations as U.S. and Chinese Officials Hold Meeting

Businesses Lower Their Expectations as U.S. and Chinese Officials Hold Meeting


During a meeting in Beijing on Friday, China’s leader, Xi Jinping, exchanged warm smiles with Bill Gates and praised him as “the first American friend” he had met this year.

The meetings in Beijing between Secretary of State Antony J. Blinken and his Chinese counterparts, starting on Sunday, are expected to be noticeably colder.

The high-level meetings aim to restore the U.S.-China relationship and many American business leaders have urged the Biden administration to work towards stability in one of the world’s most important bilateral relationships.

However, expectations for the meetings are modest, with two main goals. The first is to restore communication between the governments, which broke down after a Chinese surveillance balloon entered U.S. airspace and Mr. Blinken canceled a scheduled visit in February. The second is to prevent further deterioration in the relationship between the two countries.

There is already evidence of the impact of the strained ties. Foreign direct investment in China has reached an 18-year low. A survey conducted in 2023 by the American Chamber of Commerce in China revealed that companies still consider the Chinese market a priority, but their willingness to invest there is declining.

Jake Colvin, the president of the National Foreign Trade Council, which represents multinational businesses, stated, “The economic relationship has become so dismal that any sign of progress is welcome, though expectations are low for any sort of a breakthrough. The hope is that high-level dialogues like this can start to inject some certainty for business into an increasingly fraught and unpredictable trade relationship.”

Nevertheless, as one of the world’s largest consumer markets and home to many factories that supply global businesses, China continues to exert a strong influence. This year, as travel restrictions eased after three years of pandemic lockdowns, numerous chief executives, including Mary Barra of General Motors, Jamie Dimon of JPMorgan Chase, and Stephen Schwarzman of Blackstone, made trips to China.

During a visit to China this month, Elon Musk, the CEO of Tesla and owner of Twitter, described the American and Chinese economies as “conjoined twins” and expressed opposition to efforts to separate them. Tim Cook, the CEO of Apple, traveled to China in March and praised the company’s “symbiotic” relationship with the nation.

Sam Altman, the leader of OpenAI, which develops the ChatGPT chatbot, virtually participated in a conference in Beijing this month, emphasizing the importance of continued collaboration between American and Chinese researchers to address the risks of artificial intelligence.

The tech industry, which has established profitable partnerships with Chinese manufacturers and consumers, has closely observed Washington’s aggressive approach towards China. While industry groups acknowledge the need to safeguard national security,…

2023-06-17 09:03:56
Link from www.nytimes.com
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