Chinese on the menu?
The Wall Street Journal editorial board headlines: https://www.wsj.com/articles/
U.S. CEOs on the Chinese Menu
Business leaders give Chinese President Xi Jinping a standing ovation for showing up.
The WSJ reports:
“Whatever the merits of this week’s summit between President Biden and Chinese President Xi Jinping, there was no reason for U.S. business leaders to trip over themselves to get in on the action. Yet there they were Wednesday evening, kowtowing to Mr. Xi at a dinner that delivered China a propaganda coup and the CEOs an embarrassment.
The dinner, for which ticket prices ranged up to $40,000, sounds like some affair. Mr. Xi received a standing ovation for taking the stage before he said a word. He garnered more applause—from an audience including Apple’s Tim Cook to executives from Qualcommand Boeing—for delivering such memorable platitudes as “there is plenty of room for our cooperation” between the U.S. and China.
The hollowness of Mr. Xi’s remarks underscores how no one can claim they attended to learn more about the opaque intentions of the leader of the world’s second-largest economy. They were there as a show of political support, which they presumably hope Mr. Xi’s Communist Party regime will eventually reward.
Talk about not knowing what time it is. Two decades ago, China appeared to be on a path toward economic reform and following the rules of global trade and order. At the time some Western executives found that meeting Chinese officials was an opportunity to explain their businesses and persuade Beijing to pursue more opening. Mr. Xi still makes occasional gestures toward welcoming foreign business, as when Beijing tried to court financial investors earlier this year.
It should be clear by now, however, that something else is happening. Mr. Xi has spent most of his tenure since 2012 tightening the Communist Party’s grip on the economy. This has come with a drive toward economic nationalism, such as the “Made in China 2025” industrial policy.
Mr. Xi has been happy to sacrifice foreign business interests to consolidate his control. His strangulation of Hong Kong’s rule of law has sent foreign businesses packing. Beijing’s repression of Uighur Muslims has created reputational dangers for U.S. manufacturers. Its military threats against Taiwan run the risk of a destructive war.
Beijing has also been willing to detain employees of foreign companies for what appear to be political reasons. Longstanding Western complaints such as theft of intellectual property and corporate espionage (cyber or otherwise) go unaddressed by Beijing—and often are part of the Communist Party’s economic plan.
These and other problems make doing business in China a challenge for many companies, and many are diversifying their supply chains and investment out of China. Executives understandably want to protect their assets in China while they’re doing this, and no one expects CEOs to denounce Chinese leaders.
But that doesn’t require fawning over Mr. Xi, especially when there are real political costs for doing so at home. It’s a safe bet Mr. Xi hoped to create an appearance that American business is on his side lobbying against a firmer line on China policy in Washington. An embarrassing number of Wall Street CEOs already handed Beijing a public-relations victory when they showed up for a financial-industry summit in unfree Hong Kong earlier this month.”