Xi Jinping in 'desperate' bid to woo global investors as hostile business tactic backfires
Xi Jinping fostered a hostile environment for private business in China for years but as Beijing continues to face economic issues, he might just have to change his stance.
Xi Jinping has been "desperate" to woo international investors as China continues to grapple with considerable financial problems, a top economist noted.
The People's Republic (PRC) has been rocked by a severe property crisis that has considerably crushed the construction sector and damaged home buying.
After years of pursuing an aggressive anti-private business policy, President Xi has been forced to review his position and launched a charming offensive to rebuild connections with the United States and the European Union.
China sparked considerable concerns among foreign corporations and businesses with the introduction of a review of anti-espionage law last year – which further exacerbated reluctance to do business with Beijing.
The Chinese leader has dispatched officials across the globe to ease tensions with Washington, which remains deeply distrustful of the PRC, as well as Brussels and Tokyo.
Writing in Forbes, economist Milton Ezrati said: "The object is to help boost the economy by winning back, at least in part, the former foreign enthusiasm about China, an enthusiasm that once helped propel rapid Chinese development.
"(...)Both the Americans and the Europeans gave him a positive reception, polite and friendly, but neither effort elicited much of a substantive response. Neither investment flows nor trade have picked up much."
But despite its efforts to boost trade with top international partners, its record is likely going to undermine its efforts, Mr Ezrati noted.
He argued Xi's tendency to use trade to threaten and punish potential competitors will likely leave China facing major struggles to get its new policy working.
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Mr Ezrati added: "Now, Beijing is paying the price for such behaviour and is failing to get the engagement it wants."
Washington last month slapped major new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminium and medical equipment.
And Brussels last week also moved to hike tariffs, or import taxes, on electric vehicles made in China.
EU officials complain that Chinese homegrown automakers are poised to gobble up market share by undercutting European car brands on price thanks to Beijing’s massive subsidies.
The planned tariffs are aimed at levelling the playing field by approximating the size of the excess or unfair subsidies available to Chinese carmakers.
