China is rolling out the red carpet for US CEOs

China is not interested in talking politics with its biggest rival — it is interested in its business muscle. 

After closing the country for more than three years to curb the spread of COVID-19, China is trying to reconnect with the world. Over the past months, the Asia superpower has welcomed almost all of Europe's biggest leaders while simultaneously sending its high-ranking officials abroad. But to reconnect with the U.S., China has taken a different approach: it has rolled out the red carpet for American CEOs.

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Elon Musk's grand welcome to China was a rare sight. Not only was he received by Foreign Minister Qin Gang, a privilege usually reserved for a country's top leader, but Musk also got time with the Ministers of Industry and Information Technology and Commerce — a seemingly good step for U.S.-China relations and for Tesla's opportunities in the country.

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But the door is far from open to all Americans' efforts. Last month, Chinese Defense Minister Li Shangfu declined to meet with U.S. Defense Secretary Lloyd Austin at a conference they both attended in Singapore. Also, the two countries have been unable to align on a visit to China by Secretary of State Antony Blinken and Treasury Secretary Janet Yellen. To many Chinese opinion leaders, it's clear: China is not interested in talking politics with its biggest rival, it is interested in talking business. 

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On March 24, less than two weeks after China reopened its borders, Apple CEO Tim Cook attended the China Development Forum 2023, a government-organized annual business conference. In a surprise to many, after numerous incidents at Apple assembly centers, the audience welcomed Cook with applause.

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In turn, the CEO said he was "thrilled to be back in China." Other American companies that had sent their top leaders to the forum included Johnson & Johnson, Blackstone, Qualcomm Incorporated, Mastercard and the Boston Consulting Group.

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In the two months that followed, Intel CEO Pat Gelsinger, Starbucks CEO Laxman Narasimhan, Starbucks founder and chairman emeritus Howard Schultz, and JPMorgan's Jamie Dimon all paid visits to China, in most cases to participate in public events. 

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The CEO visits fit the narrative China wants to push, namely that of American businesses resisting the government's push for decoupling from China, as described in an article by the Global Times. A narrative that rallies support from the Chinese public when its leaders stand up against American political critique but back the government when it comes to attracting hard-needed foreign investments.

But China is facing several challenges when it comes to attracting foreign investment. The ongoing trade war between China and the U.S,. insecurities caused by China's zero-COVID policy and rising geopolitical tensions between China and the West have caused many foreign companies to rethink their dependence on China. As a result, many started to relocate their business to other East Asian countries like India, Vietnam, Thailand, Bangladesh and Malaysia. In addition, China is facing major local government budgetary deficiencies, unprecedented youth unemployment and underwhelming consumer spending. 

China’s central leadership is aware of this precarity in U.S.-China relations. During the country's most important political and legislative meetings in March, the central government set "attracting more foreign investment" as a core economic task for 2023. 

Premier Li Qiang stressed that China was open for business and would provide a better environment and better services to all as "developing the economy is the fundamental key to creating jobs." Recently adopted measures to stimulate foreign investment include loosening restrictions on foreign investment in currently restricted sectors, improving trade customs clearance and export control and further developing free-trade zones.  

Shortly after the central government's move to a more "open" China, regional and municipal governments started implementing their own ways to attract more foreign business. 

The city of Guangzhou branded 2023 the Year of Investment in China. He Lifeng, Vice Premier of the State Council, attended the event and delivered a speech promising to stimulate market vitality and focus on implementing policies to support the development of foreign-funded enterprises in China. 

Also, the municipal government of Shanghai, one of China’s biggest foreign trading cities, held organized special press conferences to introduce measures to attract foreign capital, calling for experimental openness in the fields of telecommunications, education and medical care. 

While that may sound promising to foreign enterprises, Gordon Chang, senior fellow at the Gatestone Institute and China expert, is critical of U.S. companies rushing to China. "Business is amoral and sometimes, as in the case of China, immoral. It is immoral to do business — and thereby strengthen — a regime that is committing genocide and other crimes against humanity," he said. 

In addition, Chang argues, such business is overoptimistic in this case. "As we have seen this year, the international business community thought the Chinese economy would recover quickly after the end of the 'dynamic zero-COVID' policies last December," he said, but a quick recovery in China was never in the cards. "First, China is not yet over COVID-19. Second, Xi Jinping is moving China back to a state economy. Third, the country’s economy is choking on massive debt that was incurred to produce growth, especially after the 2008 global downturn. The Chinese people are now among the most pessimistic anywhere. They are in no mood to spend and therefore rescue their failing economy."

Facing these challenges, China realizes it needs to keep good relations with American businesses and show it is open for business.