Officials offer olive branches to foreign companies
Chinese officials are stepping up their effort to extend olive branches to foreign companies – a move that observers say could solidify foreign investors’ confidence in China’s huge market, against the backdrop of the Trump administration’s “decoupling” bid.
Such an effort, coming on heels of Chinese officials’ live-streaming shows to boost domestic consumption, is another important part of “an orchestrated playbook” of policymakers to revive China’s economy.
Vice Foreign Minister Qin Gang held a telephone conversation with Stephan Wöllenstein, CEO of Volkswagen Group China on Wednesday, according to a statement on the website of China’s Ministry of Foreign Affairs on Thursday.
During the conversation, Qin recognized the German automaker’s efforts to further expand investment in China, while reiterating China’s pledge to push opening-up and create a better business environment for all foreign companies in China, including Volkswagen.
With an investment of 1 billion euros ($1.14 billion), Volkswagen acquired 50 percent of JAG, the parent company of Chinese electric-vehicle partner Anhui Jianghuai Automobile Group (JAC Motors), and increased its stake in the joint venture JAC Volkswagen to 75 percent in May, the Xinhua News Agency reported.
Asked about the conversation, Volkswagen China on Thursday did not offer more details but referred to a recent statement by Wöllenstein about the company’s latest developments in the Chinese market.
In the statement, Wöllenstein said that the company is grateful and proud to have the opportunity to deeply participate in the development of the Chinese market against a backdrop of rising global uncertainties.
The strategic investment underscores how important is China’s market opening-up and how important is Volkswagen’s understanding of the Chinese market, Wöllenstein said.
He noted that without strong support from the Chinese market, no one could imagine the extent to which the COVID-19 outbreak could impact the group’s business.
On Wednesday, Beijing’s Party chief Cai Qi held a video conference with ABB Group chairman Peter Voser. Cai vowed during the meeting that the capital was committed to improving the business environment and providing more high-quality services for overseas companies.
On social media, officials like Qin and Cai are seen by Chinese netizens as representing China’s most prominent “cheerleaders” to inspire foreign investment.
US politicians have been bluffing and inciting its allies to economically “decouple” from China in its effort to harass China’s continuous development. Some US politicians even boasted about the idea of setting up a fund to lure companies back to America.
“This is a critical time for China to show the world its … firm resolution in opening-up, as some foreign companies’ risk aversion may undermine their plans to invest more in China,” Wang Yizhi, a professor in international relations at Renmin University of China, told the Global Times on Thursday.
Analysts noted that the officials’ remarks sent an implicit signal to foreign businesses not to blend business operation with politics.
“Foreign companies should not bow to political threats or be forced to choose which side they want to stand. They will vote with their feet,” Wang said, adding that China’s market is much more promising, as the domestic economy is gaining momentum while the rest of the world has yet to see a turnaround.
The setting up of China’s business invitation group also comes after a drive by local officials around the country to sell products through live-streaming shows. Wang said this trend is part of Chinese policymakers’ roadmap to rejuvenate the economy. The first stage involves shoring up consumption and attracting foreign investment.
Analysts predicted that the economic focus in the next step will shift to stabilizing global supply chains and exploring more export markets in the developed countries.
On Thursday, Chinese Premier Li Keqiang is scheduled to hold a video meeting with German Chancellor Angela Merkel. Observers expect the two leaders to discuss closer China-Germany and China-EU economic partnerships.
File photo shows an IKEA store in Beijing. Photo: Xinhua
