China’s Attempt to Attract Foreign Investors at DAVOS Falls Short: Experts

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The CCP sent a large delegation led by Premier Li Qing to the World Economic Forum to attract foreign investors amid its slumping economy.

News Analysis

China’s ruling Chinese Communist Party (CCP) sent a large delegation to this year’s World Economic Forum in an attempt to attract foreign investments to save China’s slumping economy.

However, the CCP failed to persuade delegates that its economy is a reliable place to invest due to fundamental structural differences in the economies of centralized vs. liberal, free market systems, as experts pointed out.

The delegation sent by the CCP to the Davos Forum, which took place from Jan. 15 to Jan. 19, this time was usually large, with 140 members led by the regime’s Premier Li Qiang, including 10 ministers, chief economic and financial officials, and China’s experts and entrepreneurs.

Currently, China’s economy continues to decline, and is facing multiple structural crises, such as government debt, a bursting real estate bubble, and a high unemployment rate.

The CCP’s extremely restrictive “zero-COVID” policy and control measures for the first three years of the pandemic and its implementation of its anti-espionage law have scared away a large number of foreign investors and businessmen. The third quarter of last year saw the first quarterly net outflow of foreign investment. This trend is expected to continue.

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However, Mr. Li still promoted China as a safe investment destination at Davos.

In a carefully prepared speech at the forum, Mr. Li put forward five vague suggestions, hoping to “rebuild trust with the West and strengthen economic cooperation between China and the West,” including for macroeconomic coordination, maintaining and respecting China-centered supply chains, more international technical cooperation, and cooperation on green goals.

Mr. Li also said that China honors its promises. To the contrary, when the CCP joined the WTO in 2001, it promised to thoroughly complete market-oriented reforms within 15 years and to open up to developed countries in a reciprocal manner. However, after the West’s one-way opening up to China, instead of opening its market, the CCP is taking advantage of its closed market and using subsidies to expand state-owned enterprises.

The West is Skeptical

The West is now moving supply chains away from China in an orderly manner, investing more in democratic or friendly countries such as India, Vietnam, and Mexico. Yet the CCP still hopes for the return of foreign capital.

The office of the locally incorporated JPMorgan Chase Bank in Beijing on Oct. 11, 2007. (STR/AFP via Getty Images)
The office of the locally incorporated JPMorgan Chase Bank in Beijing on Oct. 11, 2007. (STR/AFP via Getty Images)

On Jan. 16, Mr. Li Qiang met with JPMorgan Chase CEO Jamie Dimon and other Wall Street tycoons about opening up China to Western financial-service companies. Mr. Dimon told U.S. media on Jan. 17 that investors entering China—the world’s second largest economy—have to be “a little worried” because “the risk reward has changed dramatically.”

The West has repeatedly stated that it wants to establish close economic relations with like-minded democratic and free countries and “de-risk” from totalitarian opponents like China. The CCP’s support for Russia and Hamas has also not changed while it pushes for the international community to integrate it into the wider economy.

Mr. Li’s speech at Davos this time only talked about the economy and did not dare to touch on any geopolitical topics. Ukrainian officials have said that President Volodymyr Zelenskyy was open to meeting with CCP officials in Switzerland, but Mr. Li did not take the initiative to talk to Mr. Zelenskyy. The outside world sees this as the latest sign that the CCP has chosen to continue siding with Russia.

Unlike Mr. Li who only addressed economy, European Commission President von der Leyen mentioned democracy nine times and freedom six times in her 20-minute speech at Davos.

“Our companies thrive on freedom—to innovate, to invest, and to compete. But freedom in business relies on the freedom of our political systems,” she said, “This is why I believe strengthening our democracy and protecting it from the risks and interference it faces is our common and enduring duty. We need to build trust more than ever and Europe is prepared to play a key role.”

G7 leaders, (clockwise from front) European Union Council Commission President Ursula von der Leyen, European Union Council President Charles Michel, Prime Minister of Italy Mario Draghi, Prime Minister of Canada Justin Trudeau, French President Emanuel Macron, German Chancellor Olaf Scholz, US President Joe Biden, Prime Minister Boris Johnson and Prime Minister of Japan Fumio Kishida, at a working session dinner during the G7 summit in Schloss Elmau, Germany, on June 26, 2022. (Stefan Rousseau - Pool/Getty Images)
G7 leaders, (clockwise from front) European Union Council Commission President Ursula von der Leyen, European Union Council President Charles Michel, Prime Minister of Italy Mario Draghi, Prime Minister of Canada Justin Trudeau, French President Emanuel Macron, German Chancellor Olaf Scholz, US President Joe Biden, Prime Minister Boris Johnson and Prime Minister of Japan Fumio Kishida, at a working session dinner during the G7 summit in Schloss Elmau, Germany, on June 26, 2022. (Stefan Rousseau – Pool/Getty Images)

At the Dallas Forum a year ago, Ms. von der Leyen first proposed the concept of “de-risking rather than decoupling” to redefine the EU’s industrial and economic strategy toward China. This concept has since been adopted by the United States and other G7 countries.

At Davos, U.S. secretary of state Antony Blinken reiterated the United States’ support for Taiwan’s democracy, “We congratulated the president-elect but also the people of Taiwan on their robust democracy, and the great example that that sets not just for the region but for the entire world.”

Mr. Blinken also criticized the CCP’s attempt to “exert pressure on Taiwan—economic pressure, military pressure, diplomatic pressure, isolation—it’s only reinforced many of the very people that they don’t want to reinforce.”

Mr. Li didn’t respond to either Ms. Von Der Leyen or Mr. Blinken’s remarks.

CCP Continues Aggression

Song Guo-cheng, a researcher at the International Relations Research Center of Taiwan National Chengchi University, told The Epoch Times that Mr. Li’s speeches at Davos this year were all about sending SOS signals asking for help to save the CCP’s economy. But at the same time, the CCP has not stopped pressing its socialist system of governance in contested territories.

He pointed out that while Mr. Li wants to avoid global geopolitical conflicts, the CCP remains knee deep in conflicts and has even covertly ignited them.

“The CCP still does not recognize Russia’s invasion of Ukraine, and has always insisted on reunifying Taiwan by force. It’s proposing a false peace during the Israel-Hamas war,” he said.

“The Western world now can see [the CCP] clearly,” he said. “Li Qiang tried to deceive the Western world, but the Western world no longer falls for the CCP’s tactics.”

Yeh Yaoyuan, chair of International Studies at the University of St. Thomas, told The Epoch Times that, at this stage, the CCP itself has become a high-risk investment objective. “No matter whether it is unilateral, bilateral, or multilateral contact, it cannot persuade large-scale investment in China.”

Men working at a complex of unfinished apartment buildings in Xinzheng City in Zhengzhou, China's central Henan province, on June 20, 2023. (Pedro PARDO / AFP)
Men working at a complex of unfinished apartment buildings in Xinzheng City in Zhengzhou, China’s central Henan province, on June 20, 2023. (Pedro PARDO / AFP)

“They have to solve the core issue first. At least it should have a transparent and open legal process, let alone democratization. But the Communist Party is still not doing, and it is going backward even further.”

He said, “For the Communist Party, it is afraid that when the entire market becomes active, it will produce a lot of private information that cannot be controlled. If you try to control it, it will not be a normal competitive market. The CCP is afraid that this private information will subvert the CCP regime.”

Mr. Yeh said that most economists predict that China’s rate of economic growth will continue to decline.

“It is about 5 percent now [as reported by the CCP], maybe 4 percent next, and then drop to 3 percent. The past situation of large-scale foreign investment and economic take-off should not happen again,” he added.

Song Tang and Yi Ru contributed to this report.

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