Scores of foreign CEOs, including Tesla’s Elon Musk and Apple’s Tim Cook, have made their way to China in the last few months, as the world’s second-largest economy reopens for business.
But none have said much in public about their visits, which have primarily consisted of meetings with China’s government officials, local staff, and business associates. Media events and other public appearances, which were a routine affair before the pandemic, are now uncommon.
Even Musk, who is known for his candid Twitter banter, remained unusually quiet during his recent China trip.
In 2020, the billionaire danced on stage to celebrate the delivery of the first Tesla cars made at the Shanghai gigafactory, and the event was open to the press. This time around, media were not invited to cover his plant visit.
And while Musk has mentioned the trip in two posts since leaving, he didn’t tweet once while in China.
Goldman Sachs’ David Solomon also visited China in March this year. And he was more low-key.
In 2019, Solomon gave media interviews and participated in several forums. But, in contrast, his only known engagements this time were closed-door meetings with regulators, China’s sovereign wealth fund and at a university.
Not chasing new business
The lack of information from Western CEOs and their companies about the trips to China can be attributed to wariness given that US-Sino political and trade tensions have worsened to their lowest point in decades, senior staff at chambers of commerce and trade associations said.
President Xi Jinping’s increasing focus on national security – in particular a recent crackdown on consultancies and due diligence firms – has also left many foreign companies uncertain where they might step over the line of the law, they said.
Noah Fraser, managing director of the Canada China Business Council, said visiting executives are no longer chasing new business opportunities but are concentrating on maintaining existing relationships. They often specifically demand no press, big dinners or speaking opportunities, he added.
They appear to be keeping “their heads down and will have private lunches where they can learn from people on the ground what’s happening,” he said.
Adapting to changing ties
Before travelling to China, US CEOs have particularly been seeking advice about how Beijing’s expansion of its counter-espionage law could affect them, according to the head of a US trade association who declined to be identified, citing the sensitive nature of doing business in China currently.
The CEOs also want to know how to deal with Chinese government officials and with questions once the trip becomes public, the association head said. It was not in their interest to speak to media and run the risk of being asked to comment on stances taken by Washington and Beijing, the executive added.
The EU Chamber of Commerce said in a statement that companies operating in China have always exercised a certain level of caution and were now adapting to changes in areas that might be deemed sensitive.
Tesla did not respond to a request for comment, while Goldman declined to comment.
China’s foreign ministry said in a statement that the numerous visits from US CEOs were a “vote of confidence” in the Chinese economy. That their trips were relatively low-key stemmed from what it called the US government’s “wrong policy” of containing China, it said.
With respect to concerns about its counter-espionage law, it was China’s right to safeguard national security through domestic legislation, it added.
Showing commitment to China
US President Joe Biden said last month he expected a thaw in frosty relations with Beijing “very shortly”. But there is no denying that tensions between the world’s two biggest economies have soared this year with flashpoints including US chip export curbs and Beijing’s data security concerns.
That said, after three years of harsh Covid curbs that hampered entry into China, foreign CEOs appear eager to get the lay of the land.
Those travelling here in recent months have included Intel’s Patrick Gelsinger, General Motors’ Mary Barra, Blackstone’s Stephen Schwarzman and JPMorgan’s Jamie Dimon.
Some 67 foreign business leaders attended the high-profile China Development Forum this year, although that is still 20 fewer than in 2019.
“The idea is that you have to show sufficient commitment to the China market if you’re playing there,” Christopher Johnson, president of China Strategies Group, a political risk consultancy, said.
At the same time, the CEOs need to do that “without setting off alarm bells with the US government, and it’s a very difficult task,” he added.
Toeing the US line
The few known comments by foreign CEOs whilst they were in China have been in line with Biden’s stance that he is not seeking to decouple from Beijing.
The foreign ministry quoted Musk as saying he was opposed to a decoupling of the US and China economies, which he described as “conjoined twins”.
JPMorgan’s Dimon told the JPMorgan Global China Summit last week he favoured East-West “de-risking” rather than decoupling, according to a source from the event.
Daniel Russel, vice president for international security and diplomacy at the Asia Society Policy Institute, said the difference between de-risking and decoupling was a subtle but important one.
It “makes clear that the issue is managing the risk of dependency on China rather than a determination to separate the world into two competing spheres,” he said.
- Reuters, with additional editing by Vishakha Saxena