Elon Musk, the CEO of Tesla, and David Solomon, the CEO of Goldman Sachs, have recently traveled to a China that has been reopened. One thing they all have in common is that they haven’t discussed their trips, which have mainly consisted of meetings with local workers, government representatives, and commercial partners, much in public. Before the pandemic, media appearances and other public events were common.
Even Musk, who is renowned for his frank banter on Twitter, was unusually quiet during a quick trip last week. The billionaire performed a stage dance in front of the media in 2020 to mark the arrival of the first vehicles produced at Tesla’s Shanghai plant. This time, he did not ask the journalists to interview him about his plant.
Musk didn’t tweet once while he was in China, despite having mentioned the trip in two posts after returning
Musk didn’t tweet once while he was in China, despite having mentioned the trip in two posts after returning. Solomon at Goldman has also been less showy. He spoke with the media and took part in a number of forums in 2019. However, his only known engagements on his trip in March of this year were talks behind closed doors with regulators, China’s sovereign wealth fund, and at a university.
Senior staff at chambers of commerce and trade associations noted that the absence of information from Western CEOs and their companies about the trips to China can be attributed to caution given that U.S.-Sino political and trade tensions have deteriorated to their lowest point in decades.
Many international corporations are unsure where they might cross the line of the law due to President Xi Jinping’s increased attention on national security, they claimed, especially in light of the recent crackdown on consultancies and due diligence agencies.
Visiting executives are no longer looking for new business prospects, according to Noah Fraser, managing director of the Canada China Business Council. Instead, they are focusing on maintaining their current relationships and will frequently request to avoid speaking engagements, big dinners, and the media. They seem to be keeping “their heads down and will have private lunches where they can learn from people on the ground what’s happening,” he claimed.
The frequent visits from American CEOs were seen as a “vote of confidence” in the Chinese economy by China’s foreign ministry
According to the leader of a U.S. trade association who declined to be named because doing business in China at the moment is delicate, U.S. CEOs have been asking for advice before visiting China about how Beijing’s expansion of its counter-espionage law could affect them. The organization’s president added that it was not in the CEOs’ best interests to speak to the media and run the danger of being asked to comment on positions taken by Washington and Beijing. The CEOs also wanted to know how to cope with Chinese government officials and queries once the trip became public.
The EU Chamber of Commerce said in a statement that companies operating in China have always exercised a certain level of caution and were now adapting to changes in areas that might be deemed sensitive.
Goldman declined to comment, while Tesla did not respond to a request for comment. The frequent visits from American CEOs were seen as a “vote of confidence” in the Chinese economy by China’s foreign ministry. It said that the U.S. government’s “wrong policy” of restricting China was the reason why their trips were so low-key. It also stated that China had the right to protect its national security by domestic legislation in response to concerns regarding its counter-espionage statute. The American Department of Commerce chose not to respond.
There is no doubt that tensions have risen this year, with flashpoints including U.S. export restrictions on semiconductors and worries about data security. However, U.S. President Joe Biden predicted a thaw in chilly relations with Beijing “very shortly” last month. However, following three years of strict COVID restrictions that made it difficult for foreign CEOs to enter China, they now seem ready to learn the lay of the land. Recent visitors have included Tim Cook from Apple, Patrick Gelsinger from Intel, Mary Barra from GM, Stephen Schwarzman from Blackstone, and Jamie Dimon from JPMorgan.
Musk was opposed to a decoupling of the U.S. and China economies which he described as “conjoined twins”
Sixty-seven foreign business leaders attended the high-profile China Development Forum this year, although that is still 20 fewer than in 2019. “The idea is that you have to show sufficient commitment to the China market if you’re playing there,” said Christopher Johnson, president of China Strategies Group, a political risk consultancy. At the same time, the CEOs need to do that “without setting off alarm bells with the U.S. government, and it’s a very difficult task,” he added.
According to the foreign ministry, Musk opposed the “conjoined twins” economies of the United States and China from being separated. According to a source at the event, JPMorgan’s Dimon preferred East-West “de-risking” over decoupling last week at the JPMorgan Global China Summit. The distinction between de-risking and decoupling, according to Daniel Russel, vice president for international security and diplomacy at the Asia Society Policy Institute, is nuanced but significant.
It “makes clear that the issue is managing the risk of dependency on China rather than a determination to separate the world into two competing spheres,” the guy claimed.