© Reuters. FILE PHOTO: A sign advertising the upcoming APEC (Asia-Pacific Economic Cooperation) Summit in see as the city prepares to host leaders from the Asia-Pacific region in San Francisco, California November 8, 2023. REUTERS/Carlos Barria/File Photo
By Michael Martina
SAN FRANCISCO (Reuters) – Top business leaders in the United States are expected to dine with Chinese President Xi Jinping in San Francisco on Wednesday as he seeks to court American companies and counter his country’s recent struggles to entice foreign investment.
The dinner on the margins of the Asia-Pacific Economic Cooperation (APEC) forum will follow a day of talks between Xi and U.S. President Joe Biden, aimed at stabilizing fraught ties between the world’s two largest economies.
For American businesses, it will be a chance to hear directly from China’s leader as they search for ways to navigate China’s economic slowdown, a U.S. push to “de-risk” some American supply chains away from China, and uncertainty caused by expanding Chinese security rules.
“The purpose of the dinner is to foster better communication,” one source close to the organizers told Reuters, declining to say who would speak while confirming representatives from both the Chinese and U.S. governments would share the podium.
But the event, yet to be formally announced by hosts U.S.-China Business Council (USCBC) and the National Committee on U.S.-China Relations (NCUSCR), also presents uneasy optics.
According to event notifications seen by Reuters, some U.S. firms will pay tens of thousands of dollars to hear a “Chinese state leader” from a government that Washington has accused of genocide against Muslim Uyghurs. China has vigorously denied the accusations.
The USCBC and NCUSCR both declined to comment on the planned dinner. China’s embassy in Washington did not respond to a request for comment.
Xi, who is widely expected to deliver a speech, will be eager to convince U.S. industry that China is still open for business after recording its first quarterly deficit in foreign direct investment.
Even as China this year cast off COVID-19 pandemic controls that effectively shut its borders, it has grown more suspicious of engagement with Western companies, in line with Xi’s emphasis on national security. Xi has overseen a crackdown on U.S. consultancy and due-diligence firms, a further blow to investor confidence.
‘FILET MIGNON’ AND HUMAN RIGHTS
For decades, business and trade has been at the center of U.S.-China relations, helping to fuel China’s explosive economic resurgence and offering what Beijing has often described as the ballast in otherwise contentious ties.
But concerns about a new style cold war between the rival economic and geopolitical superpowers has increasingly placed companies in the cross hairs of both governments.
Xi is on his first visit to the U.S. in more than six years and the pricey dinner, up to $40,000 for a table of eight, according to one notice for the event, is routine by standards for past Chinese presidential visits.
Reuters was not able to obtain a list of attendees, but executives of some companies who spoke privately to Reuters said they would steer clear given questions about the utility for their operations in China and U.S. political risks.
Jeff Moon, a former U.S. trade official turned business adviser, said China’s goal would be to soften Xi’s image and attract investment, but that the dinner was unlikely to “move any needles.”
U.S. lawmakers have castigated some American businesses for turning a blind eye to allegations of forced labor in China and some have been scathing in their criticism of the event.
“How does that dinner conversation go? ‘Wow, this filet mignon is a little dry. How’s your extrajudicial internment of over a million Uyghur Muslims going?” said Mike Gallagher, the Republican chair of the House of Representative’s select committee on China.
Despite human rights concerns, Biden has made a diplomatic push to improve relations, which slid to what many analysts viewed as an all-time low after the U.S. shot down an alleged Chinese spy balloon in February.
The Biden administration says communication at the highest level is essential to prevent competition veering into conflict, and in the interest of the global economy too.
Biden’s Treasury Secretary Janet Yellen reiterated ahead of the APEC summit that while the U.S. sought to reduce its dependence on China in some areas, it did not seek broad economic decoupling.
The dinner is Xi’s “reassurance tour,” and business leaders would look to him to set expectations for how foreign companies would be treated in China, said Nirav Patel, chief executive of consultancy The Asia Group.
“They have come to accept that there’s no substitute for hearing and seeing and observing what Xi Jinping is doing,” said Patel. “Of course, there are some that want to be able to demonstrate that they are committed to China and their presence in these meetings demonstrates that.”