Chinese President Xi meets with US executives as companies navigate bilateral tensions

The companies did not immediately respond to CNBC's requests for comment.

Previous reports said the meeting was a follow-up to Xi's dinner with U.S. business executives in San Francisco in November, following a meeting between the Chinese president and President Joe Biden. Ta.

Executives from major international companies were in Beijing this week to participate in the annual China Development Forum (CDF), which will be held from Sunday to Monday.

Top executives from multinational companies typically attend the state-sponsored forum billed as the “first major national-level international conference” following China's annual parliament in early March.

This year's forum coincided with other efforts to attract foreign companies. Chinese authorities hosted the China Investment Summit and formally relaxed once-strict data export requirements.

China's Cyberspace Administration formally announced late Friday long-awaited new rules that would eliminate government oversight of overseas information sharing unless regulators classify the information as “sensitive data.” These rules took effect immediately.

“This is a major step forward in transparency, allowing our member companies to be more transparent about their compliance with these rules,” Sean Stein, president of the China-American Chamber of Commerce, said in a statement.

“Notably, these changes will strengthen the role of industry-specific regulators in determining what data should be considered material in their field, and will also “We do not consider data to be material unless declared otherwise.”

However, a combination of geopolitical tensions, regulatory uncertainty, and slowing economic growth are making the situation more difficult for foreign companies in China.

“What we have is that companies are caught in the middle,” former U.S. Commerce Secretary Carlos Gutierrez said Wednesday on CNBC's “Squawk Box Asia.” “That's because I've been more involved in the business than I should have been.”

“We are in a period of confusion between different ideologies,” Gutierrez said. “We will get through it. Nothing is permanent and eventually the numbers will show that globalization is a better model than self-sufficiency and nationalism. But unfortunately We are at that moment and will be there for some time.”

Mr. Biden, who is seeking re-election in November, has announced incentives to spur U.S. industrial development. The administration is also using export controls to restrict U.S. companies from selling advanced semiconductor technology to China.

To help foreign companies navigate the Chinese market, Peter Bachmann, former SwissCham China director, has proposed placing a dedicated executive at the company's global headquarters.

“We now have to deal with two different levels. One is the business level and the other is the political level. Before, it was just the business level,” said the longtime Shanghai resident, said Bachmann, the center's director. University of Applied Sciences and Arts Northwestern Switzerland (FHNW).

He said this speaks to the legitimacy of the so-called “Chief China Officer,” whose job is to help headquarters better understand China and to maintain liaison between headquarters and the Chinese leadership team. He said this includes bridging gaps.

For companies considering investment plans in China, the country's near-term growth prospects are also a factor.

“The United States Economic Delegation [at CDF] “Significantly larger than last year, the conference organizers provided the conference with a more visible platform, and the conference took advantage of the opportunity to speak out,” said Scott, senior advisor and director of China Business and Economics at the Strategic International Center. Kennedy said.Study abroad in Washington DC

“While China's party-state has tried to send a clear signal that it welcomes foreign companies, foreign companies also share the same lack of confidence and concerns about an uncertain future that many in China's domestic industry feel. “There is,” Kennedy said.

The Chinese government announced in parliament this month that it aims for growth of around 5%.

Analysts say such a goal is ambitious given the current level of announced stimulus and the impact of the huge real estate sector. Senior administration officials suggested in Congress that Beijing may expand its support, but gave no details.

Stephen S. Roach, senior fellow at Yale Law School's Paul Tsai China Center, said this year's China Development Form provides “a new look at the challenges facing China and new policy remedies being considered. There was nothing that offered any insight.”

Instead, the forum will focus on content already shared in Congress earlier this month, said Roach, who said he has attended the CDF every year except for the first time in 2000.

“To me, this seemed like an alternative to the upcoming third party plenary session, which could provide stronger hints of new reforms and policy strategies,” Roach said.

China's ruling Communist Party typically holds a “three plenary session” every five years to discuss long-term aspects of the economy. The talks had been widely anticipated since they were expected to take place late last year.

According to official data, direct investment in China in 2023 fell to the lowest level in three years. China has redoubled its efforts to attract foreign investment since pandemic-era border controls were eased early last year.

The Ministry of Commerce and the city of Beijing held the first “China Investment Summit” on Tuesday, with about 140 business representatives in attendance.

“Investing in China is investing in the future,” Chinese Vice President Han Zheng declared in his opening speech, according to CNBC's Chinese translation. He highlighted China's large market and industrial supply chain, and pointed out how China has tackled issues such as data exports and equal market treatment for foreign companies.

While US and European companies face greater geopolitical considerations regarding their China operations, Middle Eastern capital is eyeing the market.

“When it comes to opportunities for Aramco and China to join forces, the sky is the limit, after all!” Amin H. Nasser, president and CEO of the Saudi energy giant, said on China Investment on Tuesday He said this in his speech at the summit.

He mentioned how Aramco and its chemical subsidiary SABIC struck a deal last year worth more than $20 billion in chemical investments in China. Nasser also said venture capital was a “strategic area for cooperation,” noting that Aramco more than doubled its funding for its VC arm to $7.5 billion in January.

Toyoki Oka, secretary-general of the Japan-China Investment Promotion Agency, said on the sidelines of the summit that Japanese companies are exploring investment opportunities in China's robotics, factory automation and automobile industries this year. He said these investments would be directed towards sales to China and eventually exports to Southeast Asia.

—CNBC's Eunice Yoon contributed to this report.