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China courts Davos with largest presence in years

by SuperiorInvest

Participants walk through the streets of the Alpine town of Davos during the World Economic Forum.

Fabrice Coffrini | afp | fake images

Davos, SWITZERLAND – China returned to Davos in full force this week as it seeks to thaw relations with the international community and court investment after years of Covid-19 lockdowns and rising geopolitical tensions.

A delegation led by Chinese Premier Li Qiang is estimated to be the largest since 2017, when President Xi Jinping led a cohort of 80 Chinese business leaders and billionaires to the Swiss mountain.

Addressing the forum on Tuesday, Li, China’s second-in-command, said the country was open for business, appearing to downplay a recent crackdown on private industry that has spooked investors and sparked sharp outflows of foreign cash. .

“Choosing to invest in the Chinese market is not a risk, but an opportunity,” he said.

Li met for lunch with a number of top business leaders, including the CEOs of JPMorgan, Bank of America, Standard Chartered and Blackstone. The governor of the People’s Bank of China was also present.

He was joined by several other high-ranking ministerial representatives, including Vice Foreign Minister Ma Zhaoxu and Commerce Minister Wang Wentao.

Outside the main congress center, a group of Chinese delegates CNBC spoke to said they were attending to discuss a wide range of topics including “finance and trade.”

“It’s a good time to tell China’s story,” said another Chinese tech executive.

Raising concerns in Washington

The stepped-up Chinese presence has reportedly ruffled feathers in Washington amid US concerns about Beijing’s growing global influence.

A US State Department document dated January 12 said that “ten ministers of state” would be included in Beijing’s Davos delegation, prompting the White House to step up its charm offensive, according to Politico .

The document called the presence a “pseudo state visit,” and the Chinese delegation is also expected to meet its Swiss counterparts in the capital Bern later this week. In response, Secretary of State Anthony Blinken’s agenda, who was also attending Davos, was reportedly updated to include a meeting with Swiss officials.

The State Department did not immediately respond to a CNBC request for comment on Blinken’s revised agenda.

It comes as relations between the United States and China have become increasingly fractured amid national security concerns and rising geopolitical tensions, particularly around Taiwan and Russia. That has led Washington to embark on a “de-risking” strategy, which includes curbing trade in some critical technologies.

Li Qiang, Premier of China, delivers a special speech on the opening day of the World Economic Forum (WEF) in Davos, Switzerland, Tuesday, January 16, 2024.

Bloomberg | Bloomberg | fake images

Li, in his opening speech, rejected the move and said technological innovations should not be used as a way to restrict or contain other countries.

“To keep competition healthy and generate the greatest vitality, the only way is to improve cooperation,” he said.

The comments speak to the conflict other countries, including Switzerland and Europe in general, face in choosing alliances in the showdown between the world’s two largest economies. Europe, a close ally of the United States, is equally aware of how important the Chinese market is to its domestic companies.

Still, confidence in China has been shaken by the country’s long and strict Covid lockdowns, as well as its broader crackdown on key industries, including Big Tech.

Notably, Xi’s entourage in 2017 included Jack Ma, founder of Alibaba, and Wang Jianlin, chairman of real estate developer Dalian Wanda, both of whom have since fallen out of favor with Chinese authorities amid a crackdown on private companies and a collapse in the country’s real estate market. .

As a result, Chinese companies are now investing more abroad than foreign companies in China. Foreign investors withdrew $12 billion from China in the third quarter of 2023. Meanwhile, international investors have withdrawn around $25 billion from the Chinese stock market since August 2023.

Ian Bremmer, chairman and founder of the Eurasia Group, said China’s increased presence at Davos indicates Xi recognizes the challenges Beijing now faces in reestablishing its reputation on the international stage.

“It is necessary for a country that has a very low economic performance,” Bremmer told Semafor.

“Xi recognizes it; [it] implies better management of Western relations with China, at least in the short term,” he added.

The World Economic Forum did not respond to a CNBC request for confirmation on the number of Chinese delegates present.

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