CHINESE Premier Li Qiang is making another pitch to foreign businesses in a high-profile speech on Thursday (Mar 30), seeking to restore global confidence in the world’s second-largest economy after years of punishing Covid restrictions and escalating US tensions.

Li is set to deliver a keynote speech at the Boao Forum for Asia – billed as an Asian version of the World Economic Forum in Davos – as the event wraps up in the southern province of Hainan.

The four-day gathering comes as Beijing rolls out a charm offensive to court overseas business and investment and bolster its diplomatic efforts to portray China as a responsible geopolitical actor.

For foreign firms, operating in China in recent years has not been easy. Many have faced disruptions and supply chain logjams due to stringent Covid Zero controls, while consumer spending slumped and profits were squeezed.

More recently, US firms have faced more scrutiny for their business ties to China amid rising political tensions between the two countries.

The Boao event follows on the heels of the China Development Forum earlier this week in Beijing, where Li welcomed figures including Apple’s Tim Cook and Standard Chartered’s Bill Winters. For many overseas executives, it was their first trip to China since it reopened its borders after three years.

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The Ministry of Commerce has designated 2023 as the “Year of Investing in China”, with a series of promotional events planned to lure investors. Commerce Minister Wang Wentao last month said China welcomed foreign businesses to step up research and development spending in the Asian nation.

Local media reported earlier that Shanghai would launch a campaign aimed at boosting investment. The goal was to attract funding for eight major building projects, including a railway passenger terminal.

A host of international leaders are attending this year’s Boao gathering, including Singaporean Prime Minister Lee Hsien Loong, Spanish leader Pedro Sanchez and Malaysia’s Anwar Ibrahim.

Chinese leaders have in the past used the event to announce major steps to open the financial system, including the establishment and expansion of the stock connect programme that links mainland exchanges with Hong Kong.

US-China strains

In a meeting with foreign executives earlier this week, Li urged them to take a long-term view amid economic challenges and vowed to continue opening up to global businesses.

While strained US-China relations rarely came up during the China Development Forum earlier this week, the mood at a closed-door panel was “somber”, said Scott Kennedy, a China specialist at the Center for Strategic & International Studies.

At the session, which did not include Li or other senior officials, some Chinese participants complained about “a reflexive American opposition to China’s success”, while US participants expressed concern over an unintentional crisis erupting, Kennedy said.

Foreign companies are also having to contend with security risks. Japan is seeking the release of an employee of drugmaker Astellas Pharma who was recently taken into custody by Chinese authorities. Beijing has said a Japanese citizen was suspected of espionage.

A Japanese official told the country’s parliament this week that China had detained 17 Japanese citizens since 2015.

Also, five local employees at the American due diligence firm Mintz Group were detained last week, according to the New York Times. The company “is suspected of engaging in unlawful business operations”, the Foreign Ministry in Beijing said.

Economic prospects in China are improving, with economists predicting growth of 5.3 per cent this year, up from just 3 per cent in 2022. In a meeting with the International Monetary Fund’s managing director Kristalina Georgieva on Wednesday, Li said China was confident of meeting its full-year goals. Beijing has set a growth target of around 5 per cent for the year.

Even so, foreign businesses remain cautious. China is no longer one of the top three investment priorities for US firms, according to the latest survey from the American Chamber of Commerce in China. Almost half of US firms already in the market plan no new investments, according to the survey. BLOOMBERG