President Xi Jinping turned into a Sweet Talkin’ Guy as he serenaded America’s business elite at a glitzy gala in San Francisco last week. But at times you could hear the broken glass in his voice as he tried to drum up support for China’s crippled economy.
Xi had just come from a four-hour meeting with President Joe Biden at the secluded Filoli country estate on the outskirts of the city hosting the APEC Summit of leaders.
“Indeed, the fact that Xi met at all with Biden, and the degree to which he has offered concessions, has everything to do with the protracted slump in China’s economy,” Dexter Roberts, the author of The Myth of Chinese Capitalism, posted in his Trade War newsletter.
“[His] worries about the parlous state of the Chinese economy [were] also behind his decision to join a banquet in his honor with corporate chieftains,” he said at the weekend.
State of play:
- In the past two years, Xi has come under fire for the country’s tanking economy, the bedrock of the Communist Party’s right to rule.
- Autocratic policies have been tolerated by the Chinese people as long as there were “economic opportunities.”
- But that is being questioned amid a property meltdown and a local government debt crisis.
- Soaring unemployment among the young is another major problem while foreign investment has evaporated.
Delve deeper: “A wake-up call signaling just how bad things have gotten was the shocking announcement earlier this month, that foreign direct investment fell in China in the third quarter,” Roberts said.
Between the lines: Tit-for-tat trade sanctions with the United States and heavy-handed national security regulations by Beijing have spooked foreign companies. The outflow in FDI totaled US$11.8 billion between July to the end of September.
Big picture: Still, the reaction from China’s state-run media to Xi’s talks with Biden and his comments to business leaders turned into an anti-American rant.
What they said: “The key lies in whether the US plays a positive role … it’s clear that any mechanism in the Asia-Pacific region that excludes China won’t go far,” Global Times stated in an editorial on Monday, entitled Hope the US gesture of cooperation can be reliable.