Nandini Roy Choudhury, writer

In brief

• Beijing is adopting a conciliatory approach towards U.S. trade relations, seeking to attract foreign investment while managing trade pressures without strong retaliation against U.S. tariffs.
• The China Development Forum highlighted China’s efforts to reassure foreign executives about its economic direction, amidst concerns over potential new U.S. tariffs and their impact on global trade.
• Despite ongoing economic challenges, including deflation and a real estate downturn, Chinese officials are optimistic about recovery and are focusing on stimulating growth through technology and foreign investment.

Detailed news

BEIJING:  A indication that Beijing is seeking to neutralize trade pressures rather than retaliate strongly, China courted the executives of large U.S. corporations at an annual conference this week. This is a clue that Beijing is trying to counteract trade concerns.

As a means of bolstering growth, China has long sought to attract foreign investment. At the same time, China has exploited corporate interests in order to potentially exert influence on the White House, notably during the administration of Donald Trump, the President of the United States. Since January, the United States has raised tariffs on all Chinese exports by a total of two times, while Beijing has only announced targeted levies and restrictions on a small number of American businesses.

It was this week in Beijing that a conversation took place on the margins of the China Development Forum, which was hosted by the state. This conversation confirmed a more conciliatory posture than the official language that has been heard this month over how China is prepared to fight “any type of war” with the United States.

According to Stephen Roach, a senior fellow at the Paul Tsai China Center at Yale Law School, who spoke with CNBC, delegates of the Chinese conference were not particularly focused on what can be done to respond to tariffs imposed by the United States.

Why is Trump acting in this manner? This is the question that I have been receiving more frequently. What exactly is he aiming to accomplish? “What does he believe it takes to truly make the United States of America great?” remarked Roach. Since the beginning of the 2000s, he has been present at the event.

This is an era that has never been seen before in terms of the role that the United States plays in the global economy. “We are going back to a tariff regime that history has shown us can be extremely destructive,” Roach said, adding that he anticipates increased policy uncertainty in the United States and around the world “for a very, very long time.”

Over the past few weeks, the fluctuation of U.S. equities has occurred as investors attempt to evaluate the economic impact that Trump’s shifting intentions for tariffs will have on major trading partners of the United States. Last week, the Chair of the Federal Reserve in the United States, Jerome Powell, stated that tariffs could postpone progress in reducing inflation in the United States.

Reassurance in the form of a message

According to Scott Kennedy, senior advisor and trustee chair in Chinese business and economics at the Center for Strategic and International Studies, a think tank based in Washington, District of Columbia, China was attempting to send a message of “reassurance” at the conference that took place this week. The message was about how China intends to increase consumption and how the country is heading in a “modestly positive direction” in comparison to what is occurring in the United States.

When asked by CNBC, Kennedy stated that “then you go from managing costs and de-risking to possibly de-coupling” in the event that the United States applies considerably large tariffs at the beginning of April. And if it happens, it might signal that the game is over. In light of this, I believe that the degree of anxiousness is quite high. It is for this reason that China is making an effort to convey this message of reassurance.

The administration of President Trump has threatened to impose a wide range of new tariffs on major trading partners beginning in the beginning of April. The United States continues to be China’s most important commercial partner on a single-country basis, despite the fact that China has boosted its commerce with countries in Southeast Asia and the European Union.

Both Sunday and Monday were dedicated to the China Development Forum. Even though Elon Musk, CEO of Tesla, was not present, Apple CEO Tim Cook was present among the executives who were present.

“The increased optimism this year compared to last year at the CDF has been just so heart warming,” said Ken Griffin, CEO of hedge fund Citadel, during an official panel at the conference. “It has been just so heartwarming.”

The statement was made by Griffin, who stated that Trump “is committed to American companies having access to a global market.” Furthermore, the President is willing to employ tariffs in order to make an effort to impose this worldview.

First step toward a meeting between Xi and Trump?

In addition, on Sunday, Republican Senator Steve Daines of the United States met with Chinese Premier Li Qiang in Beijing. This was the first time that a lawmaker from the United States has traveled to China since President Trump began his most recent term in 2018.

“This was the first step to an important next step, which will be a meeting between President Xi and President Trump,” Daines said in an interview with the Wall Street Journal. The timing of that event, as well as the location of it, is yet to be determined.

An immediate response from the White House was not received in response to a request for comment.

According to the official media, Li put forth an appeal for cooperation and stated that a trade war would not benefit anyone.

The CEO of FedEx, Raj Subramaniam, the Senior Vice President of Boeing, Brendan Nelson, the CEO of Cargill, Brian Sikes, the CEO of Medtronic, Geoffrey Martha, the CEO of Pfizer, Albert Bourla, the CEO of Qualcomm, Cristiano Amon, the CEO of UL Solutions, Jennifer Scanlon, and the President of the United States China Business Council, Sean Stein, were also present at the meeting between Daines and Li, according to a report from a foreign media pool.

Not only does China constitute a considerable portion of the supply chains of numerous multinational organizations, but it also continues to be a significant source of revenue for these businesses. China is the world’s second-largest economy.

Despite the fact that it is making attempts to strengthen international commercial relations, the government has warned of retaliation on tariffs imposed by the United States and has taken moves in a gradual manner.

Following the imposition of penalties by the United States government on the Chinese telecoms firm Huawei during the first term of President Trump’s presidency, Beijing initiated a list of unreliable enterprises that places restrictions on international economic dealings with China.

Following this year’s announcement of tariff increases, China added PVH, the parent company of Calvin Klein, as well as a few other American companies to the list. In addition, China announced on Monday that it will shortly reveal new measures that would provide it with a legal foundation for retaliating against pressure from other countries.

Aspects of the economy

Additionally, the health of the economic recovery has been a significant issue for local business plans for American corporations that have established operations in China.

The Chinese government has been making increased efforts to bolster the economy since the end of September. Earlier this month, prominent policymakers reaffirmed their ambitions to stimulate the economy and a recent initiative to boost private-sector technology entrepreneurs. This was done in response to DeepSeek’s accomplishments in artificial intelligence.

You have the impression that China is the source of a great deal of positive energy this year. According to Wendell P. Weeks, CEO of Corning, who provided an interview to CNBC, “I feel like recovery is underway.”

The Chinese economy, on the other hand, has been struggling with deflationary pressure and a real estate downturn, which has a negative impact on the growth prospects of the region for international enterprises.

Even Beijing’s efforts to encourage high-tech manufacturing have only added an average of 1.1 percentage points to gross domestic product growth in each of the last three years. This is not enough to compensate for the 1.7 percentage point drag that real estate has been causing throughout that time period, according to calculations provided by Goldman Sachs.

In an interview with CNBC, Qualcomm’s Amon stated, “We will continue to maintain our optimism because the role of technology is important, I believe more than it has ever been.” “I believe that technological advancement will play a role in the rise of the economy.”

Source : CNBC news