Energy, not tech or finance, in CEO line-up for Trump’s China visit
BEIJING: US energy and commodities firms will make up a major part of a business delegation visiting Beijing at the same time as US President Donald Trump goes to China in November, according to an initial list seen by Reuters.
Prominent technology and financial companies are mostly absent from the list, reflecting the slow progress Washington has made in opening up China in those sectors.
Commerce Secretary Wilbur Ross, who will lead the 29 companies that have been approved to travel on the trade mission starting on Nov 8, said they will be looking for ‘immediate results’ and ‘tangible agreements’.
But, speaking at the Paley International Council Summit in New York on Wednesday, he acknowledged that market access, intellectual property rights, and tariffs are more complex and will take a longer time to negotiate.
Some major industrial companies – General Electric Co, Honeywell International Inc and Boeing Co – are among the companies on the current list.
Whether executives from all the named companies end up attending could be subject to agreements or deals being negotiated in time for the visit, according to multiple sources whose companies are involved.
One of the few tech companies going with Trump is Qualcomm , which earns about half of its global revenue in China and faces a series of tricky legal issues there, including a lawsuit with Apple and the Chinese government’s review of its pending US$38 billion merger with NXP Semiconductors . Qualcomm said its CEO, Steve Mollenkopf, planned to attend.
An industry source told Reuters tech firms were reluctant to go, given China market access issues, the unpredictability of the Trump administration, and a “Section 301” US trade investigation alleging Chinese abuses of intellectual property.
“(These) issues are extremely sensitive for tech companies said another source in the US business community.
“Veryfewwanttosticktheirheads up and be perceived as complaining directly, and even fewer trust this White House to do anything helpful on their issues,” he said.
Particularly galling to foreign tech firms are a slate of new national security and cyber security regulations, which mandate companies store crucial data within China and pass security reviews they argue could put business secrets at risk.
Trump, a real estate magnate who had never before held public office, has had a sometimes testy relationship with corporate America since taking office in January.
He disbanded two high-profile business advisory councils in August after several chief executives quit in protest over his controversial remarks on racist violence in Charlottesville.
US industry sources say it has been years since a major business delegation has gone to China during a US presidential visit.
Calls for such a delegation during Trump’s visit originated in the China-based US business community, according to several sources, who saw a need to match growing efforts by Germany, France and Britain to promote their nation’s firms in China.
Trump, who has frequently cited the substantial US trade deficit with China as a reason why Washington should take more protectionist measures, was an easy sell on incorporating a group of executives into the visit, according to the sources.
Nonetheless, some trade analysts say China has done a good job of taming Trump’s combative trade impulses.
They worry the US administration will be willing to paper over market access concerns during the visit in its focus on getting Beijing to take action against North Korea over its nuclear and missile programmes.
Beijing agreed in May to grant limited US access in financial services in bilateral talks aimed at reducing China’s trade surplus with the United States which reached US$347 billion last year, but business groups complained it was too little, too late.
William Zarit, the chairman of the American Chamber of Commerce in China, told Reuters he didn’t expect Trump to push hard on market access issues on this trip.
“Unfortunately, I think the Chinese aren’t going to start to respond until they feel some pain,” Zarit said. “We’re all wondering what that is going to mean.”
Scott Kennedy, at the Center for Strategic and International Studies think tank in Washington, said Beijing has deflected commercial issues “using a combination of leadership flattery, coaxing up to his (Trump’s) family, token concessions, adjusting their level of help on North Korea sanctions, and threats of retaliation should the US take any unilateral action”. — Reuters