China Courts US Businesses Amidst Trade Tensions

China sought to reassure US business leaders this week at the China Development Forum in Beijing, signaling its desire to navigate trade tensions with the US, as reported by CNBC. This comes as President Donald Trump continues to escalate tariffs against Chinese goods.

The forum, a state-organized event, presented a more conciliatory tone than recent official rhetoric, which has vowed to fight "any type of war" with the US. Attendees focused their questions on Trump's motivations and the potential economic consequences of his tariff policies.

"The questions I've been getting more [are], why is Trump doing this? What is he trying to achieve? What does he think it takes to really make America great?" Stephen Roach, senior fellow at Yale Law School's Paul Tsai China Center, told CNBC, highlighting the prevailing sentiment among attendees. Roach, a veteran attendee since the early 2000s, described the current situation as an "unprecedented period" for America's role in the global economy, warning of a potentially "extremely destructive" tariff regime.

US stock markets have fluctuated in recent weeks as investors grapple with the economic implications of Trump's evolving tariff plans, and Federal Reserve Chair Jerome Powell recently warned that tariffs could impede progress on inflation in the US.

At the forum, China aimed to project a message of reassurance, emphasizing its commitment to boosting consumption and navigating towards a "modestly positive direction" relative to the US, according to Scott Kennedy, senior advisor at the Center for Strategic and International Studies.

Kennedy, however, expressed concern over the potential impact of significantly large tariffs scheduled for early April, suggesting a potential shift from managing costs and risks to a potential decoupling, raising the stakes for both countries.

The Trump administration has threatened a wave of new tariffs on major trading partners, including China, beginning in early April. While China has strengthened its trade ties with Southeast Asian nations and the European Union, the US remains its largest trading partner on a single-country basis.

Notable attendees at the forum included Apple CEO Tim Cook, though Tesla CEO Elon Musk was not present.

"The increased optimism this year compared to last year at the CDF has been just so heart-warming," remarked Ken Griffin, CEO of hedge fund Citadel, during an official panel. Griffin expressed his belief that Trump is "committed to American companies having access to a global market," and that he is "willing to use tariffs to seek to enforce this worldview."

Also notable was a meeting between US Republican Senator Steve Daines and Chinese Premier Li Qiang, the first visit by a US politician to China since Trump's second-term inauguration. Daines described this meeting as a "first step" towards a potential meeting between President Xi and President Trump, emphasizing the importance of high-level engagement to address trade issues.

The White House has yet to comment on Daines' remarks. Li, according to state media, urged cooperation, emphasizing that a trade war would benefit no one.

Several high-profile executives from major US corporations, including FedEx, Boeing, Cargill, Medtronic, Pfizer, Qualcomm, UL Solutions, and the US-China Business Council, attended Daines' meeting with Li.

China's economic recovery remains a key concern for US companies operating in the country. Since late September, China has implemented various economic support measures, including stimulus plans and efforts to encourage private-sector tech entrepreneurs.

"This year, you feel a lot of positive momentum beginning in China. So I feel like recovery is underway," noted Wendell P. Weeks, CEO of Corning, to CNBC.

However, China's economy continues to grapple with deflationary pressures and a real estate slump, casting a shadow over regional growth prospects for international businesses. Even Beijing's efforts to bolster high-tech manufacturing have yielded limited results, adding an average of only 1.1 percentage points to GDP growth over the past three years, insufficient to offset the 1.7 percentage point drag from the real estate sector during the same period, according to Goldman Sachs estimates.

Despite these challenges, some executives remain optimistic about the role of technology in driving economic growth. "We will remain optimistic because the role of technology is important, I think more than ever," said Qualcomm's Amon, to CNBC. "I think technology is going to be part of economic growth."