Desperate Beijing seeks love wherever it can find it

Facing economic challenges and waning global enthusiasm, Beijing has launched a diplomatic "charm offensive" to win back foreign investment and trade support, but its efforts have yet to yield significant results, according to an article by Forbes.  Caliber.Az reprints the piece.

Beijing must feel desperate. It can see that things economic are not going well, either domestically or with trade or with investment flows. It can also see how the once great global enthusiasm about China business has ebbed among Americans, Europeans, and Japanese. Washington has shown increasing hostility toward China trade as well as Brussels and Tokyo, though to a less extreme extent.

In response, China’s leaders have in recent months set out to woo business and political leaders in every area of the developed world. President Xi Jinping has feted American business leaders twice and told them how much China values them. He has done the same in Europe. Most recently, he has sent Premier Li Qiang to Seoul, South Korea to deliver the same message and more to the leaders of that country and Japan. But if Beijing has suffered no outright rejection, it has felt little warmth.

The reasons for Beijing’s efforts are clear enough. Domestically, a severe and persistent property crisis has crippled homebuying and construction activity. Because of the loss of wealth in the property crisis, and for other reasons as well, Chinese consumers remain reluctant to spend, while President Xi’s former hostility toward private business has stalled their investment and expansion as well as hiring. Exports have lagged because of the varying degrees of hostility toward China trade exhibited by governments in Washington, Brussels, and Tokyo and also because businesses in these regions are actively diversifying their foreign operations and sourcing away from China.

This lack of domestic and foreign economic support has led to what can only be described as Beijing’s recent “charm offensive.” The object is to help boost the economy by winning back, at least in part, the former foreign enthusiasm about China, an entusiasm that once helped propel rapid Chinese development. President Xi met with American business leaders at the APAC (Asia-Pacific Economic Cooperation) summit in San Francisco last November where he reassured them that they were welcome in China and that they would find a fertile business environment there.

Earlier this year, he invited even more American business leaders to Beijing to hear the same message. Shortly after that show, Xi travelled to Europe to tell the Europeans the same thing. 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.

Most recently, Beijing made much the same pitch to South Korea and Japan. Premier Li Qiang met in Seoul with South Korean President Yoon Suk Yeol and Japanese Prime Minister Fumio Kishida. At the meetings he promoted trade among the three economies and invited investment into China. It was the first such get together since 2019.

In many ways, Li made the same promises to the South Koreans and the Japanese that Xi did to the Americans and the Europeans, but he went a step further. He tried to revive the idea of a three-way free trade agreement first mooted in 2012 but largely stalled since. By emphasizing the common Asian heritage of the three nations, Li also seemed to be trying to split either or both countries from their close economic and diplomatic relations with the United States.

Everyone was very polite in Seoul, as were the Americans and Europeans, but it is not apparent that Li got anywhere. There was of course the usual rhetoric about cooperation on trade and clean energy, but nothing concrete came out of the meetings, not even a plan, much less a commitment. Though Li insisted on separating economics, investing, and trade from security and diplomacy, security issues nonetheless soured the meetings.

Both Yoon Suk Yeol and Fumio Kishida asked for Chinese help restraining North Korea’s missile testing and otherwise hostile acts. Li never addressed these concerns, except at one point he warned South Korea about “politicizing trade” (as if Beijing would never do such a thing).

Kishida expressed concerns over China’s recent military drills around Taiwan and reminded Li how “extremely important” to Japan and the international community were any activities across the Taiwan Strait. He may have reminded Li that Japan has committed itself to Taiwan’s defense even more directly than has the United States. It became painfully apparent that the kinds of advances Li sought on trade and investing, much less a three-way free-trade agreement could not proceed without some resolution of security issues.