The leaders of Microsoft, Citi Group, Exxon Mobile and other major multinationals are converging on San Francisco this week for an audience with Chinese President Xi Jinping and other Asian leaders, as China-U.S. relations, long frosty, show only tentative signs of warming.
For many businesses, the program is simple: they are ready to resume operations.
A CEO summit on the sidelines of the Asia-Pacific Economic Cooperation meeting will coincide with the toughest business climate in a generation. Washington is trying to prevent China from acquiring high-end computer chips and has imposed restrictions on American investments there. Beijing responded by launching its own chip efforts and urging citizens to buy locally made phones and other products. From technology to logistics, oil and gas to finance, companies are struggling to maintain access to Chinese consumers even as they try to navigate a growing list of regulations, tariffs and export controls.
Some of the biggest names in American business are expected to attend the summit, including Citigroup’s Jane Fraser, Exxon’s Darren Woods, Microsoft’s Satya Nadella and You’re here Inc. and Elon Musk of SpaceX. A number of leaders were invited to dinner with Xi, according to people familiar with the matter, an opportunity for them to express their concerns and ambitions in a less formal setting.
“If Xi is to meet with these business leaders at this summit, they will be looking for signals that U.S.-China relations are thawing,” said Dan Prud’homme, assistant professor of business at Florida International University.
Founded in 1989, APEC was created to promote free and fair trade as China began its historic economic opening under Deng Xiaoping. APEC meetings rarely result in progress, or even an agreement. Still, the San Francisco gathering marks the first time the United States has hosted the event in 12 years and will provide a widely welcomed opportunity for President Joe Biden and Xi to meet face to face.
“What we’re trying to do is change the relationship for the better,” Biden said. told reporters Tuesday at the White House, shortly before his departure for San Francisco, where he is due to meet Xi on Wednesday. Biden said he believed the Chinese people were “in economic trouble right now.”
In recent months, high-level officials from the two countries have met several times to prepare the ground for the first summit between the two men in a year. In a sign of a potential thaw, the Chinese government plans to unveil a purchase agreement for Boeing Co. 737 Max airliner during APEC, according to people familiar with the matter. Xi is not expected to announce a formal order for the plane, the sources said. But a deal would be a significant step forward for Boeing, which has been largely shut out of the Chinese market in recent years. Furthermore, China purchased more than 3 million tonnes of soy from the United States last week, a gesture of goodwill, according to people familiar with the matter.
“Both sides have decided now to put the brakes on and try to inject some degree of stability into a situation that would otherwise deteriorate,” he said. Evan Medeiroswho was President Barack Obama’s top adviser on Asia and now holds the Penner Family Professorship in Asian Studies at Georgetown University.
For business leaders, APEC is an opportunity to gossip, push their agendas and pontificate about the state of the world. Musk expected to join Selling power Marc Benioff, CEO of Inc., for a session titled “Conversations About the Future.” Exxon CEO Woods plans to give a speech titled “Reframing the Climate Challenge: Conserve Energy, Curb Emissions.”
The most popular ticket is Xi’s dinner, and leaders were scrambling to find seats or to get on a waiting list, according to people familiar with the matter. China’s president is under pressure to assure leaders that his country is very open for business and is making progress in its efforts to revive the economy. His guests will not hesitate to tell him that they still consider China a market of vital importance despite Washington’s efforts to erect barriers around sensitive technologies.
Some companies are more directly affected than others by Beijing’s crackdown on foreign businesses, and few are. Apple Inc., which generates about a fifth of its revenue in the region and manufactures the vast majority of its devices there. Apple sales in China slow motion last quarter, and it faces growing competition from Huawei Technologies Co. Bloomberg and other media outlets have reported that Beijing has limited the use of iPhone and other foreign technology at agencies and companies backed by China. ‘State. Government officials have denied that.
While Tim Cook is not attending APEC – but instead sending a mid-level government affairs official – the Apple CEO visited Beijing last month. He met with Commerce Minister Wang Wentao, who told him that China welcomed Apple and other multinationals.
San Francisco appears as a central hub for artificial intelligence, and technology will be a major concern of participants. Officials around the world have expressed concerns about the potential dangers of AI, even as the United States and China vie to dominate the burgeoning era of chatbots and content generators. In an executive order last month, Biden proposed regulating sales to foreign entities of cloud computing power used to feed data into software models that generate AI content.
Microsoft has integrated generative AI into all of its major products, and Nadella is expected to talk about the technology in a keynote on Wednesday. “Now is the time to engage in a dialogue about the central role of advances in AI in shaping the global economy,” Ahmed Mazhari, director of Microsoft Asia, said in a statement. Googlewhich is sending several executives, plans to explain why its AI products are suitable for Asian markets.
While many of the mutual trade restrictions target companies whose products have national security implications, Prud’homme of Florida International University notes that many of the companies participating in APEC do not make products that could be used for military purposes. “They are somewhat off the radar of the U.S. government national security establishment,” he said. “And they will want to convince their Chinese counterparts that they are operating in sectors that should not be targeted by current political tensions.”
Exxon is a good example. Having won approval to build a multibillion-dollar petrochemical plant in Guangdong province, the company aims to become a key supplier of plastics to the country’s manufacturing industry for decades to come.
Social media apps from Meta Platforms Inc. Facebook, Instagram and WhatsApp have been blocked in parts of Asia for years, notably in China. But the company is increasingly reliant on the region to manufacture its virtual reality headsets and smart glasses. During APEC, Meta executives will seek to strengthen ties with government officials and Asia-based manufacturers who can enable or hinder its growth.
Certainly, American companies run the risk of establishing close ties with China. The country has drawn international opprobrium for its treatment of the Uyghur minority, curbing citizens’ freedoms and increasing its military aggression against Taiwan.
Apple is regularly criticized for the concessions it has made to operate in China. The company partnered with a government-linked firm to power iCloud, raising concerns that Beijing could access data stored on users’ Apple accounts – a claim Apple has disputed. It removed apps from the local version of its App Store if Beijing objected and agreed not to operate digital services such as Apple TV+, the iTunes Store and Apple Arcade.
Musk, whose Tesla has a factory in Shanghai, has also been criticized for his complicity with Beijing. It caused a international uproar last year, when he suggested that the world treat Taiwan as a special administrative region like Hong Kong.
Most leaders refrain from openly criticizing Beijing, but FedEx Corp. Chairman and founder Fred Smith recently told an energy conference that China has “become mercantilist, protectionist and [has] a geopolitical ambition to become a hegemon.
Smith is not participating in APEC. But his successor as CEO, Raj Subramaniam, will be there and is expected to echo his mentor’s long-standing argument that increased trade spurs economic growth, creates wealth and spreads peace.