Xi’s message to US side is clear and positive

President Xi Jinping’s recent meeting with US business leaders and academics rightly caught the attention of the international media. Among the factors on which the peace and prosperity of the world depends, two of the biggest are the state of US-China relations and the prospects for China’s economic development — both of which were the primary themes of Xi’s carefully planned message to the US side.

The setting counts. It was right after the annual China Development Forum, where the CEOs of foreign corporations come to engage with China’s policymakers. China’s top leader, who met with the CEOs, thereby elevated the meeting’s importance with the highest authority. In the new era, with the Communist Party of China directly responsible for leading all sectors of the country, the fact that the general secretary of the CPC Central Committee himself held the meeting is itself the first important message to the US side.

The readout of the meeting, as reported in China’s media, is a fascinating probe of the current way of thinking of China’s leaders. Although the top leader is always well prepared for his meetings and speeches, he seemed extraordinarily well prepared for this timely meeting. The structure and specificity of his remarks combined to form the clearest, most incisive, most direct and in-depth expression of his views on ChinaUS relations, and on China’s economy.

One can infer two big themes from the meeting: China is committed to seeking improved relations with the US, and China is determined to more comprehensively reform and open up its economy. Although the two themes are hardly new, there was something about the top leader’s remarks this time that seemed different, something that signaled intensified commitment.

On US-China relations, his message was unambiguous. The fact that he chose to meet with the China experts and CEOs from the US is a neon-flashing sign that China seeks to stop the cascading slide in relations, stabilize relations, and carefully build relations back up. The top leader placed his trust in the people in general and in peopleto-people exchanges in particular, which is a long-standing foundation of his approach to foreign policy, broadly speaking.

Referring to China-US relations, he said: “The future will of course be created by the people.” And he expressed the hope that “people from all sectors of Chinese and American societies will have more mutual visits and exchanges”.

What I found striking was that while calling for cooperation, not confrontation, and mutual respect and win-win results, he acknowledged that “the relationship cannot go back to the old days”, a powerful and realistic recognition, which counter-intuitively gives credence to his follow-on exhortation, “but it (China-US relations) can embrace a brighter future”. Only an honest assessment of the present can enable a hopeful vision of the future.

What was no surprise was that Xi was optimistic about China’s economy — which is the No 1 topic on everyone’s mind — by reminding his listeners that China’s growth rate in 2023 was among the highest of the major economies and accounted for more than 30 percent of global growth, much as in previous years. What was somewhat of a surprise was that he told the story of China’s economy in the context of two negative “theories”: the “China collapse theory” of the past, which of course did not happen, and the “peak China theory” of the present, which he said will not happen.

China, he said, “will continue to advance high-quality development and Chinese modernization, enable the Chinese people to live a better life, and contribute more to sustainable development in the world”. These words were not crafted as smooth talk for the foreign visitors but are the overarching strategic policy of Chinese leaders and the day-to-day operational guidelines of Chinese officials. The new mantra for China’s economic growth is “high-quality development”, which is driven by “new quality productive forces”. Everyone who counts in China gets the message.

On reform and opening-up, his words were weighed judiciously, as they always are. There has been concern among foreign businesses, and even among some domestic entrepreneurs, that reform and opening-up have stalled. In response, the top leader said “reform and opening-up hold the key to contemporary China’s catching up with the times in great strides”, and “China’s reform will not pause, and its opening-up will not stop”, but he has made similar remarks in the past.

That’s why I focused on what he said next: “China is planning and implementing a series of major steps for comprehensively deepening reform, and steadily fostering a market-oriented, law-based and world-class business environment.” The operative word here is “planning”, which means there are new structures, new regulations and/or new measures on the horizon that will be sufficiently different from the present ones, to justify the phrase “major steps for comprehensively deepening reform”.

Had he stated only the general principles, his words might not have instilled high confidence. But by putting the world on notice and creating widespread expectations, he has given credence from the top that China is serious about a new round of economic reforms. This is why I expect, and most foreign analysts do not, significant economic reforms, the most in a decade or so.

The proof, of course, will be in the specifics of the plan, and then its real-world implementation. For example, in recent days, the government has been shortening the negative list for foreign investment, and lifting restrictions on market access for foreign investment in manufacturing, while opening up the medical and telecommunications sectors.

Moreover, China’s cybersecurity regulator has relaxed restrictions on outbound data flow so foreign businesses operating in China can feel more secure in conducting their normal business.

To me, a major motivating factor for President Xi is that to truly achieve his grand vision for China — “the great rejuvenation of the Chinese nation” — the country must become a world-class business center, and to become that, the country must develop a “market-oriented, law-based and worldclass business environment”.

Who can deny the world would benefit from stable US-China relations? Who can deny the world would benefit from China’s economic growth and development? Both sit on the global center stage in these tense mid-years of the third decade of the 21st century.

SHI YU / CHINA DAILY