China President Xi Jinping Calls for Stability in Global Supply Chains

China President Xi Jinping Calls for Stability in Global Supply Chains

Reassuring Foreign Investors Amid Economic Concerns

China’s President Xi Jinping urged multinational CEOs to protect global industry and supply chains as Beijing seeks to address concerns over the economy’s health. The move comes amid renewed trade tensions with the United States and fears of increased tariffs.

Challenges Facing China’s Economy

China is working to dispel concerns that a trade war with U.S. President Donald Trump could further slow growth in the world’s second-largest economy. The nation has been struggling to recover from the pandemic, with business sentiment affected by regulatory tightening, abrupt crackdowns on foreign firms, and an uneven playing field favoring state-owned enterprises.

Xi’s Message to Business Leaders

“We need to work together to maintain the stability of global industry and supply chains, which is an important guarantee for the healthy development of the world economy,” Xi told a gathering of business leaders.

He urged them not to be swayed by transient industry disruptions or to blindly follow actions that could compromise global supply chain security and stability.

Key Business Leaders in Attendance

Around 40 executives participated in the meeting, with a strong representation from the pharmaceutical sector. Among those present were the CEOs of AstraZeneca, FedEx, Saudi Aramco, Standard Chartered, and Toyota. The meeting lasted over 90 minutes, with seven companies invited to speak.

The Role of Business Diplomacy

Frank Bournois, Vice President and Dean of the China Europe International Business School in Shanghai, highlighted the significance of this meeting as an example of business diplomacy. He noted that corporations are not only representing themselves but also their respective sectors in global economic discussions.

Executive Seating and Discussion Highlights

The business leaders were seated in a horseshoe arrangement, with Mercedes-Benz CEO Ola Källenius and FedEx’s Raj Subramaniam positioned directly across from Xi. Other prominent executives in the first row included HSBC CEO Georges Elhedery, SK Hynix boss Kwak Noh-jung, Saudi Aramco CEO Amin Nasser, and Hitachi Chair Toshiaki Higashihara.

Foreign Enterprises’ Contribution to China’s Economy

Xi emphasized the role of foreign businesses in China’s economic ecosystem, stating that they contribute to:

• One-third of China’s imports and exports
• One-quarter of industrial added value
• One-seventh of tax revenue
• Over 30 million jobs

Despite these contributions, Xi acknowledged that geopolitical factors have interfered with foreign investment in China, adding, “I often say that blowing out other people’s lights does not make you brighter.”

China-U.S. Trade Relations

Xi reaffirmed that the economic and trade relationship between China and the U.S. is mutually beneficial. However, trade tensions have escalated, with Trump recently announcing new tariffs set to take effect on April 2, targeting countries with trade barriers against U.S. products. China has responded with additional duties on American agricultural products.

Decline in Foreign Direct Investment

Meetings between foreign executives and high-level Chinese officials have increased following a significant decline in foreign direct investment (FDI). In 2024, FDI plummeted by 27.1% year-on-year in local currency terms, marking the steepest drop since the 2008 global financial crisis.

Future Outlook

Despite concerns that such meetings may be symbolic, Bournois emphasized that their effectiveness will depend on subsequent actions. “From the outside, this dialogue might appear as just a shuffling of papers, but if it is followed by concrete measures, only then will we see changes in FDI trends.”

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