The Boao Forum for Asia (BFA), an annual conference which brings together global leaders from government, academia and business — dubbed as China’s Davos, was held in Boao (Hainan Province, China) from March 26-29, 2024. The theme of this year’s conference was “Asia and the World: Common Challenges, Shared Responsibilities.”
The timing of the BFA was important, it was held at a time when China faces serious economic challenges – this includes drop in foreign direct investment (FDI), property market crisis. FDI into China was estimated at $33 billion in 2023, a significant drop from 2022. January-February 2024 witnessed a nearly 20% (19.9%) year on year dip, in FDI inflows from China, from 2023.
China’s messaging at the Boao Forum
Zhao Leji, who chairs the Standing Committee of the National People’s Congress while speaking at the BFA some of the steps China is taking to promote tech innovation and easing out FDI policies. Zhao reiterated China’s commitment to a business-friendly environment.
He also flagged the point that it is important for Asia to prevent “geopolitical fighting” and said:
“transcend the old mentality of bloc confrontation and zero-sum games and practice genuine multilateralism to jointly build an open-world economy.”
While on the one hand, China reiterated its commitment to globalization and investor friendly policies, it also called for reforms within the International Monetary Fund (IMF). People’s Bank of China’s governor Pan Gongsheng while addressing the forum said that given its share of global economic output, China deserved a higher percentage than the 6.09 percent voting, it held in the IMF (US has 16.5 percent share).
Several Asian countries called for de-dollarization or trade in local currencies. In the aftermath of the Russia-Ukraine crisis, the trend of de-dollarization or trade in local currencies has gained momentum with China taking the lead.
Xi Jinping meeting with US CEO’s
On March 27, 2024, Chinese President, Xi Jinping met with top western CEO’s — who had come to attend the China Development Forum.
While urging US CEO’s to invest in China and reiterating his commitment to necessary reforms, Xi stated:
“Whether it is traditional fields such as economy, trade and agriculture, or emerging fields such as climate change and artificial intelligence, China and the United States should help boost each other’s development”
The CEOs who met Xi Jinping included Cristiano Amon of Qualcomm (QCOM), Raj Subramaniam of FedEx (FDX) and Stephen Schwarzman of the Blackstone Group (BX). Xi has warned against the western policy of ‘decoupling’ which seeks to economically isolate China.
China-US tensions and impact on economic ties
While tensions between China and US began with the trade-wars, it was post the covid-19 crisis, that several countries have sought to diversify their economic relations and reduce their dependence upon China. According to a survey earlier this year, by the American Chamber of Commerce, China a significant percentage of American companies lacked confidence in China opening up for foreign companies.
Several western companies, including Apple, have also got impacted by the drop in consumer demand as well as intense competition from Huawei.
While China has tried to make some course corrections in terms of its economic policies, Xi Jinping’s economic policies have been blamed for China’s economic slowdown especially in the aftermath of COVID-19.
Biden administration’s emphasis on engagement with China
While Biden Administration has not been soft vis-à-vis China, it has laid emphasis on continuous engagement with the latter on key global issues – economic and geopolitical. The meeting, held on the sidelines of the G20 Summit held in Bali, in November 2022 and then the meeting between Xi and Biden in November 2023, on the sidelines of the Asia Pacific Economic cooperation at San Fransisco, paved the way for reduction of tensions and engagement between both sides.
During his November 2023 meeting with Xi Jinping, Biden flagged US concerns on important issues, both sides had agreed to military engagement.
A joint statement released by the White House stated: “ stressed the importance of responsibly managing competitive aspects of the relationship, preventing conflict, maintaining open lines of communication, cooperating on areas of shared interest, upholding the UN Charter, and all countries treating each other with respect and finding a way to live alongside each other peacefully…”
Former US President and Republican Presidential candidate, Donald Trump who began the trade wars has given mixed signals vis-à-vis China. While on the one hand, he has accused Biden of following a soft policy vis Beijing and stated that he would follow a tougher line on economic issues, on the other he has praised Chinese President, Xi Jinping saying: “Look, I want China to do great, I do. And I like President Xi a lot, he was a very good friend of mine during my term.”
The Boao Forum reiterates several points. First, while the Chinese economy may have slowed down and foreign direct investment may have dipped, Beijing is keen to send out the right signals to foreign investors. Second, both Washington and Beijing realize that in spite of their differences they cannot allow tensions to escalate.
[Photo by Boao Forum for Asia]
The views and opinions expressed in this article are those of the author.
Tridivesh Singh Maini is a New Delhi based analyst interested in Punjab-Punjab linkages as well as Partition Studies. Maini co-authored ‘Humanity Amidst Insanity: Hope During and After the Indo-Pak Partition’ (New Delhi: UBSPD, 2008) with Tahir Malik and Ali Farooq Malik. He can be reached at [email protected].
