‘China is open for business’ was the message its newly-appointed Premier Li Qiang delivered this week to the Boao Forum, an international summit sometimes touted as Asia’s answer to the World Economic Forum’s meetings in Davos.
But unlike the gaggle of global leaders, celebrities and CEOs that descended on the Swiss Alps in January, the foreign contingent in Li’s audience were outnumbered by a local crowd of Chinese business leaders, academics and China-based diplomats.
The scene partly illustrates the disconnect between Beijing’s repeated entreaties for foreign investment now that three years of COVID curbs have ended and the intensifying suspicions, especially in Western countries, of China’s business environment.
“Participation this year is China heavy,” Ben Simpfendorfer, a Hong Kong-based partner at management consultancy firm Oliver Wyman, told Reuters on the sidelines of the annual summit held on the balmy island province of Hainan.
“Over time, it would be fabulous to see more participants from Southeast Asia, the Middle East, and of course, America and Europe.”
Even though China axed its strict COVID-19 controls in December, airlines are still struggling to ramp up international flights while years of closed borders and painful lockdowns have battered the economy and knocked business confidence.
China still requires COVID-19 tests for most inbound travellers and the delegates and media who wanted to hear Li’s speech in person at Boao had to be swabbed beforehand.
The five-day event came immediately after another business summit, the China Development Forum in Beijing, attended by business luminaries such as Apple CEO Tim Cook. However, several of the bigwigs in attendance there did not stay on for the meetings in Boao.
“My global CEO could not spare more than a few days in China, and had more important meetings to attend in the U.S.,” an executive from a multinational told Reuters, declining to be identified as he was not authorised to speak to the media.
But Chinese officials will have to work hard to convince the foreign executives that heard Li’s message that they are serious about change.
Foreign firms in the manufacturing powerhouse and home of 1.4 billion consumers have long complained about an uneven playing field for overseas companies, intellectual property theft and an unpredictable regulatory landscape.
“The question now is whether you can trust the Chinese government? Can they be expected to keep their word?” a Europe-based hedge fund manager said after listening to Li’s speech.
Days before the duo of summits kicked off, Chinese authorities raided the office of U.S. corporate due diligence firm Mintz Group in Beijing and detained five of its local staff, a move which unsettled foreign companies.
The geopolitical backdrop to the charm offensive on foreign business has deteriorated as well, with the U.S. and its allies facing off with China over issues from Taiwan to trade restrictions.
Hours after Li’s speech, in which he also warned about the dangers of protectionism and economic decoupling, European Commission President Ursula Von Der Leyen said Europe needed to “de-risk” diplomatically and economically from China.
On Friday, as the conference wrapped up, Japan announced trade controls that align with a U.S. push to curb China’s ability to make advanced microchips.
One western diplomat in southern China, speaking to Reuters on condition of anonymity, said Boao and other summits in China were largely “window dressing” and that the reality is foreign firms are not rushing to China.
“It isn’t clear that business is keen to enter China beyond the companies already here,” he said.