China's top leader Xi Jinping met executives from Saudi Aramco, BMW, Toyota Motor, FedEx and dozens of other foreign companies at the Beijing People's Conference on Friday to boost foreign investment amid aggravated trade relations between China and the US.
It was the third time XI has met executives from a multinational company in the past 17 months. Global companies have been careful about making big bets in China, calling for investment as slowing growth and strict national security laws.
More than 40 executives from Saudi Aramco's Aminnasser, BMW's Oliver Gyps, Toyota's Akio Toyoda, Mercedes-Benz's Orakerenius, Samsung's Rejeyon, FedEx's Larges Bra Maniam, and global ship maker Heads and FedEx's Larges Bra Maniam attended Friday's meeting. Hynix and The Pharmaceutical Giants Pfizer and Sanofi.
According to Chinese state media, Xi Qiang Kai urged the global supply chain to remain stable, saying China has great potential for investors.
Fresh foreign investment in China has declined significantly over the past few years. One exception is the German automotive industry, which views China, the world's largest automotive market, as a place to compete with increasingly formidable domestic automakers.
German automakers represented half of their new investments from the European Union last year, according to consulting firm Rhodium Group. BMW has raised its shares in the Chinese joint venture and announced this week that it will use artificial intelligence technology developed alongside Chinese technology giant Alibaba as an assistant in the vehicle.
The huge new electric car factory by Volkswagen in central China was one of the few new manufacturing facilities built by foreign Chinese companies last year. Volkswagen also bought a small share of Chinese automaker XPENG as part of its approach described as “in China.”
The meeting with XI took place four days after the China Development Forum, an annual economic and financial event attended by the Global Executive. Executives from Apple's Tim Cook, Blackstone Group's Stephen Schwarzman, Astrazeneca, Cargill, Pfizer and Fedex were in Beijing to join the forum along with dozens of Chinese companies presidents.
Speaking at the forum, Mercedes-Benz's Kellenius spoke about how his company invested in Chinese engineering, including the $2 billion spent on long-wheeled electric vehicles in China.
China tapped $116 billion from its peak of $163 billion last year and $189 billion in 2022, according to the Chinese Ministry of Commerce. Much of that money comes from reinvesting profits from existing businesses.
Tensions between Washington and Beijing have discouraged American companies from making new investments.
The constantly strict national security laws have discouraged some investors. Five Chinese employees at Mintz Group, an American corporate consulting firm, were released after being detained for two years, the company said this week. Companies like Mintz Group, which conducts corporate research and due diligence, have mostly withdrawn from China, leaving the multinationals needed to see if potential investments face legal, environmental or political challenges.
Another problem with foreign companies in China is the worsening of the domestic market, according to a survey by the Foreign Chamber of Commerce. Many industries suffer from severe overcapacity and price declines. The chances of making profits from new investments are limited.
siyi Zhao and Berry One Contributed research.
