China’s new premier rolls out the welcome wagon for foreign companies

By Laura He, CNN

China’s new premier, Li Qiang, has offered a hearty welcome to foreign companies in an effort to arrest a slump in business confidence that has exacerbated the country’s economic woes.

Li, who was formally appointed earlier this month, met a group of global CEOs on the sidelines of the China Development Forum in Beijing on Monday, including Apple’s Tim Cook.

“China will open its door wider and wider,” he told the executives, according to state broadcaster CCTV, urging them to “invest in China and take root in China.”

“No matter how the international situation changes, China will unswervingly expand its opening up to the outside world,” he said. “China’s economy has been deeply integrated into the global division of labor.”

Li pledged that the country will align with international economic and trade rules, give equal treatment to foreign investment and facilitate trade and investment by removing government controls.

Participants at the forum, which was held from Saturday to Monday, included Samsung Chairman Lee Jae-yong, Pfizer CEO Albert Bourla, Bridgewater founder Ray Dalio, Blackstone CEO Stephen Schwarzman, Alliance Group CEO Oliver Bäte, Rio Tinto CEO Jakob Stausholm and Hitachi CEO Toshiaki Higashihara.

Cook spoke at a panel discussion on Saturday, saying he was happy to be back as the company celebrated its 30th year in the country, according to state media. This is his first trip to China since 2019.

During the past three decades, “Apple has grown together with China, and we both enjoy the relationship very much,” Cook was quoted as saying. “We have a huge supply chain in China and our app store is thriving.”

CNN has reached out to Apple for comment, but didn’t immediately receive a response.

New premier

Li, a trusted ally of Chinese leader Xi Jinping and former party chief of Shanghai, was chosen as the country’s No. 2 official earlier this month as Xi cemented his grip on power.

The new premier was tasked with reviving the world’s second largest economy at a time of sluggish growth.

The slowdown was caused, in part, by systemic issues that have haunted the economy for years, such as massive debt levels and a shrinking work force.

But the problems have been exacerbated by the Communist Party’s erratic and draconian zero-Covid policy, which ended late last year, and a sweeping crackdown on private business.

The measures have resulted in weak business confidence, a slump in investment and surging unemployment. The youth jobless rate, in particular, hit more than 18% last month.

Worries about foreign investment

Concerns about foreign capital leaving China have grown. In recent weeks, reports said Apple has accelerated plans to shift some of its production outside of China, telling suppliers to plan more actively for assembling Apple products elsewhere in Asia.

Foxconn, Apple’s biggest contractor, said last month it had secured a new site in Vietnam to expand production in the Southeast Asian country, according to the company.

For the first time in 25 years, the American Chamber of Commerce in China found in its annual survey of members that fewer than half of the respondents regarded China as one of their top three investment destinations.

To boost business confidence, China’s new economic leadership is trying to reassure foreign business and the domestic private sector.

“You are not foreigners, but family,” Wang Wentao, the commerce minister, told attendees at the China Development Forum.

Wang held a dozen personal meetings with senior company officials, including the CEOs or chairs from Swire Group, Qualcomm, BMW, Mercedes-Benz and ‎Nestlé, according to the ministry.

In a meeting with Cook on Monday, he said China is willing to “provide a good environment and services” for foreign enterprises including Apple.

Earlier this month, the ministry announced that for the first time, it would launch an “Invest in China Year” in 2023 to encourage foreign companies to set up shop.

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