China vice-premier pledges nation will continue to open up

CHINESE Vice-Premier Ding Xuexiang used a speech to global executives to reassure participants that China will continue to open up as international companies increasingly complain of market-access challenges. 

“Opening to the outside world is a national policy, it is a mark of modern China,” Ding said at the annual China Development Forum in Beijing on Sunday (Mar 26) during a keynote speech. He also read a message from President Xi Jinping, in which the Chinese leader pledged to continue to pursue a mutually beneficial opening. 

China’s economy has rebounded since dropping Covid Zero restrictions, with consumer spending, industrial output and investment all climbing in the first couple months of the year.

The recovery in domestic demand is especially important to Beijing, which is counting on consumer spending to help it reach an economic growth target of about 5 per cent this year. The country needs to counter other risk factors, including falling exports, a still-weak property market and shrinking government resources for large fiscal stimulus.

Ding, 60, was Xi’s chief of staff until recently. Prior to that, he held various roles in the Shanghai government, including secretary of the city’s political and legal committee. A graduate from a mechanical college’s technology programme, Ding spent the early days of his career as a researcher with the Shanghai Research Institute of Materials, and served as its director in late 1990s.

China’s Finance Minister Liu Kun said at the forum that “while there are some blockages in the operation of the domestic economy, the fundamentals of economic resilience and potential are unchanged”, without elaborating on the specific issues. 

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Liu also said China would “appropriately” expand fiscal expenditure and further increase transfer payments from the central government to local administrations.

China has indicated it would refrain from massive fiscal stimulus to boost the economy in 2023 partly due to mounting debt risks faced by local authorities. Rather, the government would rely on a post-Covid rebound in consumption to underpin growth.

The American Chamber of Commerce (AmCham) in China said in a report earlier this month that for the first time in about 25 years, China is not a top three investment priority for a majority of US firms, with geopolitical tensions and domestic economic issues driving businesses to focus elsewhere. 

“A year ago, 60 per cent of companies said China was the top or a top three investment priority; and this year that’s fallen to 45 per cent,” Michael Hart, president of AmCham in China, said earlier this month. “China is falling in the rankings as a place for people to invest globally. It’s still important but not one of the top destinations for the majority of companies.”

Separately, Foreign Minister Qin Gang told a group of American business leaders that China’s opening up after Covid and its strong economic recovery will offer “triple” benefits for US business communities despite “chilly” relations between the two countries.

The fact that Xi was re-elected, the nation’s continued efforts to open up to the world, and its social and economic “reset” will benefit US business communities, Qin said in the meeting on Saturday in Beijing, according to a statement posted on China’s Foreign Ministry website. Still, relations between China and the US are as “chilly” as early spring weather, the minister said.

Qin welcomed US companies to keep expanding investments in China and to set roots in the country, according to the statement. Beijing hopes the US can help promote bilateral relations despite current difficulties and restore ties to a healthy and stable trajectory, he said. 

US representatives said China-US relations are at a critical stage and the business communities are committed to preventing the two countries from stepping into a trap of isolation and conflict. They said they welcome further face-to-face communications and hope more China-US flights could be added to facilitate exchanges, according to the statement. 

Among US attendees at Saturday’s meeting were Albert Bourla, chairman and chief executive officer of Pfizer; Craig Allen, president of the US-China Business Council; and Ray Dalio, founder of hedge fund Bridgewater Associates, according to a photo attached to the statement. American business leaders including Apple chief executive officer Tim Cook and Boeing International president Brendan Nelson attended the China Development Forum in Beijing over the weekend.

“Clearly, the US-China tension and the way it is managed will have great bearing on the global economy, great bearing on all nations,” Tharman Shanmugaratnam, a senior minister of Singapore and chairman of the Monetary Authority of Singapore, said at the forum on Sunday. “And how the US and China are able to combine competition – perfectly legitimate competition, economic competition – with the need for cooperation is going to require considerable strategic ambition and strategic skill, but it will matter to the world. ” BLOOMBERG