China’s new Premier Li Qiang said on Thursday (March 30) at the Boao Forum in Hainan, China, that he is committed to China’s opening up and reforms, even amid trade and geopolitical tensions with Western countries, Reuters reported. Attract foreign investors.
Li Qiang, speaking alongside the prime ministers of Malaysia, Singapore and Spain, told a group of foreign executives including Tim Cook of Apple at a high-level China Development Forum on March 27 that China was “unwavering” in its commitment to opening up.
In his first speech since taking office, Li Qiang promised to ease the sweeping regulatory crackdown and support private enterprise. Alibaba this week announced plans to split up and explore raising funds or listing each subsidiary, suggesting he is following through on that stance.
But prospects for a quick economic recovery in China have been clouded by tensions with the United States and its allies, including close ties with Russia, a tough stance on Taiwan and concerns over its use of sensitive technologies.
Three years of strict border controls and a series of sweeping social lockdowns during the coronavirus pandemic have sapped business confidence in China, especially foreign firms, according to sentiment surveys.
The CCP’s policies are contradictory: while promising to open up, arrest people at will
Voice of America reported on March 31 that the CCP government has recently released a series of positive signals to foreign companies, saying that China’s economic prospects are optimistic and the government will unswervingly expand opening up. Chinese foreign companies first suspended Deloitte’s Beijing branch for three months and imposed a fine, and then detained employees of an American company and a Japanese company one after another.
Although the CCP government has released positive signals one after another, foreign companies are becoming more cautious after three years of strict “clearing” policies. The temptation of the Chinese market is no longer as great as it used to be, especially for foreign start-ups and small businesses to say.
According to the EU SME Centre, inquiries from small and medium-sized companies looking to enter China fell by about 18% last year compared with a year earlier. The same is true for corporate America.
The recent detention of employees of foreign companies by the Chinese authorities has cast a shadow over the so-called “adherence to openness” and “improvement of the business environment” promised by Chinese Communist Party officials.
On March 24, the CCP authorities detained five Chinese employees of the Beijing office of the U.S. due diligence company Mintz Group on suspicion of illegal business operations; on March 27, the CCP detained Japan’s Ans An employee of Astellas Pharma Inc. Prior to this, the Ministry of Finance of the Communist Party of China imposed a three-month suspension of business and a fine of approximately US$31 million on Deloitte’s Beijing branch, on the grounds that the firm failed to audit the true status of China Huarong’s underlying assets and did not respond to the discovered abnormal transactions. Appropriately express an audit opinion.
Anna Ashton, director of China corporate affairs at Eurasia Group, a global political risk consultancy, said the timing of the detentions of employees of Maxwise and Astellas was confusing. The foreign business community has come as a shock, though likely coincidence, at a time when the Chinese government is trying to assuage foreign concerns about the business environment in China.
“What attracted international attention was that both cases occurred a few days before the China Development Forum, which hosted its first offline annual meeting post-COVID, when executives from major global companies were preparing to travel to China,” she said. The Chinese central government has spent the past few months emphasizing to the foreign business community that they are welcome in China and trying to assuage international business concerns about the operating environment. The timing of the high-profile arrests of foreign company employees is odd.”
Ashton said that the detention of employees of the American company Maxwise and the Japanese pharmaceutical company Astellas raised concerns about whether geopolitical factors were involved.
The CCP has promised to improve the business environment and is working hard to restore the confidence of global investors in its economy to attract more foreign investment to promote economic growth, but in the eyes of analysts, political security is a strategic element that Xi Jinping values more.
Voice of America quoted Di Pippo of the Center for Strategic and International Studies (CSIS), a Washington-based think tank, as reporting that for the top leader of the Communist Party of China, Xi Jinping, economic development is of course important, but it has taken a backseat to national security and long-term strategy. His top priority is to speed up indigenous technological self-sufficiency while de-risking the financial sector.
Xi Jinping said in a speech on March 13 after being re-elected as the president of the National People’s Congress of the Communist Party of China, “Security is the foundation of development, and stability is the prerequisite for prosperity.”
According to Di Pippo, this means that the needs of foreign investors will eventually be taken to the back burner.
In order to protect the so-called “regime security”, the Ministry of Public Security of the Communist Party of China has made clear and specific arrangements.
A few days ago, the Ministry of Public Security of the Communist Party of China issued a three-year (2023-2025) “Action Plan” to local public security bureaus, lowering the police force of city and county public security bureaus to grass-roots police stations, and then extending to urban and rural communities. It also requires the establishment of volunteer police within three years The Ministry of Public Security has incorporated the police’s “intervention in family conflicts and emotional disputes” into the Action Plan. Implement “national security and social stability”.
Nikkei’s leading reporter and editorial writer Katsuji Nakazawa wrote on March 29 that an unexpected figure appeared during Xi Jinping’s trip to Moscow, Cai Qi, one of the seven members of the Politburo Standing Committee of the Communist Party of China.
According to the CCP’s official media, Cai Qi is also the director of the CCP’s General Office. This role is Xi Jinping’s de facto director of the office. This may be the most important personnel change in the CCP since the end of the 20th National Congress of the Communist Party of China last year.
According to Zhongze Keji’s observation, Cai’s choice was unconventional in many ways. First, the past chief of staff came from members of the Politburo, not the top seven members of the Standing Committee; second, Xi Jinping has never been accompanied by a member of the Politburo Standing Committee on previous trips overseas, and Cai Qi, Xi’s trusted close aide, is the first people who do.
This appointment allows people to see the future of CCP politics.
Chief of Staff, controls who meets with top leaders and handles scheduling issues. Cai Qi ranks fifth in the party, and his position has greatly changed the nature of this position.
Cai Qi once served as secretary of the Communist Party of China’s Beijing Municipal Committee, a position usually held by members of the Communist Party’s Politburo, but at the time, Cai was not even an alternate member of the Central Committee.
The repressive social policies Tsai introduced during her time in Beijing, such as encouraging migrant workers to return to their rural homes, were not popular with local citizens.
But Xi ignored the bad news and surprised many by promoting Tsai to the Politburo Standing Committee at the Communist Party’s 20th National Congress last October.
Mr. Nakazawa said Mr. Xi, who is notorious for not praising others often, thinks highly of Ms. Tsai in public, and their relationship is considered very close.
Cai Qi will lead a team of Xi’s trusted aides to oversee security-related issues.
Over the years, Xi Jinping has attached great importance to security issues. In a speech at the annual session of the Communist Party’s National People’s Congress in early March, Xi repeatedly used the word “security.”
Security by Xi includes both external security and domestic security, the latter involving issues including the “blank paper” movement that once spread across China in opposition to Xi’s strict “dynamic zeroing” policy.
Some protesters of the White Paper Movement publicly demanded that Xi Jinping resign.
It is worth noting that key positions related to security are now held by close aides of Xi Jinping.
In CCP politics, “security” also includes “political security,” a new concept that Xi Jinping began to advocate, including public security and national security, which means cracking down on spies who pose a threat to national security.
Currently, Zhongnanhai is establishing a new chain of command, with Xi Jinping at the top, followed by Cai Qi. Any order from Xi would pass through Cai to familiar and trusted cronies.
Nakaze Keji wrote that two chains of governance are emerging in Zhongnanhai, one for national security and the other for the economy. National security will be handed over to Cai Qi, while the economy will be handed over to new Chinese Premier Li Qiang. Together, they will help Xi Jinping gain ultimate absolute power.
This new leadership system of the CCP will become clearer at the third plenary meeting of the 20th Central Committee of the CCP this fall.