China’s leader assures business chiefs he’s still committed to reform

China’s President Xi Jinping has promised leading international business executives that China will stick to its “peaceful development” path and continue to reform and open up its domestic market.
In a bid to win the hearts and minds of the global business community amid rising tensions with the United States, Xi’s letter to the Global CEO Council stated that the long-term economic fundamentals of the Chinese economy remain sound and “will not change” despite the impact of the coronavirus.
A summary of the letter was published by the official Xinhua News Agency on Thursday, shortly after China announced its economy grew by 3.2% in the second quarter of 2020. This followed the historic 6.8% drop in the first three months of the year.
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“(China) will provide a better business environment for Chinese and foreign enterprises (to help) explore new opportunities and new prospects,” Xi wrote in the letter dated July 15. “You’ve made the correct choice of putting down your business roots in China.”
Xi also repeated previous promises that China will promote an “open” world economy at a time when global businesses are jittery about the rising tensions between Beijing and Washington and the prospect of a decoupling between the world’s two biggest economies.
“I hope you will uphold the concept of win-win and joint development to enhance communications and cooperation with Chinese enterprises,” he added in the reply to a letter sent by executives from 18 multinationals on the Global CEO Council, a body set up by Beijing as part of its efforts to reach out to the business community.
The chief executives had praised China and Xi’s leadership in controlling the coronavirus outbreak.
Xi’s reply comes at a time when the pandemic and increasing friction between Beijing and the West have left businesses facing an uncertain outlook.
On Tuesday, US President Donald Trump signed an executive order paving the way for sanctions against individuals and financial institutions involved in developing and implementing the new Hong Kong national security law.
The law, which came into effect on July 1, authorizes the Chinese government to punish those individuals and companies that cooperate with foreign sanctions placed on Hong Kong officials or institutions.
China’s punitive actions against countries like Canada and Australia for actions it deems to be interference in its domestic affairs has further increased concern among foreign firms.
A poll of 200 companies with global supply chains conducted by sourcing specialists Qima in June found that 95% of respondents in the US planned to change suppliers away from China.
This week, China’s foreign ministry announced that it will sanction US company Lockheed Martin for its arms sales to Taiwan ” something that China, which views Taiwan as a breakaway province, regards as interfering in its internal affairs.
As politicians in Washington and Brussels harden their stances against Beijing, the Chinese government is trying to woo multinational companies to avoid a total breakdown of relations and maintain its role in global value chains.
However, Beijing’s charm offensive has lost momentum since the imposition of the Hong Kong security law.
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