Xi and Li speak out: Zhongnanhaikou has changed dramatically. Xi will never forget one thing.

[Voice of Hope November 28, 2023](Comprehensive report by our reporter He Jingtian) The top leadership of the Communist Party of China has made continuous statements to the outside world in recent days, signaling that it is open to the outside world, not decoupled from the world, and hopes that foreign capital will invest in China. This statement is very different from the image of the “Wolf Warrior Diplomacy” of the previous period. However, when the leader of the Communist Party of China, Xi Jinping, talked about “creating favorable legal conditions and external environment,” he still kept in mind “building a community with a shared future for mankind.”

Li Qiang attended the opening ceremony of the first China International Supply Chain Promotion Expo

The official Xinhua News Agency of the Communist Party of China reported that Chinese Premier Li Qiang attended the opening ceremony of the first China International Supply Chain Promotion Expo in Beijing on November 28 and delivered a keynote speech.

Li Qiang claimed that the purpose of the CCP’s hosting of this “Chain Expo” is to establish an international platform for “communication among all parties,” “deepening cooperation,” and “seeking common development.”

Li Qiang also said that we must oppose protectionism and various forms of “decoupling and disconnection”, and hope that China (the CCP) will “deeply integrate into the global industrial chain and supply chain system” and “will provide more opportunities for companies from all over the world to invest and operate in China.” Convenience and better protection.”

According to a report by Xinhua News Agency, the official media of the Communist Party of China, on November 28, on the afternoon of November 27, the Political Bureau of the CPC Central Committee held its tenth collective study on strengthening the construction of foreign-related legal systems. When presiding over the study, Xi Jinping, leader of the Communist Party of China, emphasized that foreign-related legal rule is “to promote high-level foreign affairs.” It is imperative to open up and respond to external risks and challenges.” It is “important” and “urgent” to “do a good job in foreign-related legal work” with the purpose of “creating favorable legal conditions and external environment for Chinese-style modernization.” In the end, Xi Jinping never forgot “building a community with a shared future for mankind.”

Has the CCP’s direction changed?

Xi Jinping, the leader of the Communist Party of China, and Li Qiang, the second-largest figure in the Communist Party of China, spoke out separately. The former emphasized “strengthening the construction of foreign-related legal systems” and “protecting the legitimate rights and interests of foreign businessmen”; the latter claimed at the first Supply Chain Expo held by the Communist Party of China that he would integrate deeper into the global industrial chain supply system. middle.

Deutsche Welle reported on November 28 that against the backdrop of calls from the West to “de-risk” China’s (Chinese Communist Party’s) supply chain, senior CCP officials have frequently spoken out, indicating that Beijing is working hard to attract foreign investment.

U.S. and European companies in China have said that foreign investment in China has encountered unprecedented difficulties in the business environment due to geopolitics, counterespionage laws, raids on multinational companies and prioritizing local companies.

Meanwhile, foreign direct investment in China has collapsed, and even official Chinese data is getting uglier.

For example, the balance of payments data released by the State Administration of Foreign Exchange of the Communist Party of China show that foreign direct investment has turned negative for the first time since statistics began in 1998. Cumulative foreign direct investment in the first nine months of this year was just $15 billion, down nearly 92% from the 2022 total.

The British Financial Times reported on November 26 that Nicholas Lardy, a senior researcher at the Peterson Institute for International Economics and an expert on China issues, pointed out that foreign capital is now abandoning investment in China and withdrawing funds at an alarming rate. In the first three quarters of 2023, capital outflows exceeded $100 billion, and the trend is still rising so far.

British media reports believe that this largely explains why Xi Jinping launched a charm offensive against the United States at the Asia-Pacific Economic Cooperation (APEC) Business Leaders Summit earlier this month, inviting American companies to invest in China and promising to take The “heart-warming” measures “provide better guarantees for foreign business friends to invest and establish businesses in China” and emphasize that China is “both a super large economy and a super large market” and a “partner and friend of the United States.”

British media reports added a commentary to Xi’s words, saying that if Xi had not forced executives of foreign companies in China to attend “Xi Jinping Thought” lectures, his rhetoric might have been easier to sell.

Lardy is even more skeptical of Xi Jinping’s statement. Time will tell, he said, “whether Xi Jinping’s speech will first stem the current massive outflow of foreign direct investment (FDI) and ultimately lead to a return to the net FDI inflows China has experienced for more than four decades. A safe assumption is that Achieving this will require more than words.”

Although questioned by the outside world, Beijing still spares no effort to send signals and seeks to attract foreign investment to return.

For example, at a meeting of the Political Bureau of the CPC Central Committee held on Monday (November 27), Xi Jinping stated that it is necessary to strengthen the construction of foreign-related legal systems, improve the open and transparent foreign-related legal system, strengthen the protection of intellectual property rights, and safeguard the legitimate rights and interests of foreign-invested enterprises.

Xi Jinping also said that China should create a market-oriented, legal and international first-class business environment.

German media reported that foreign companies have complained for some time about the ambiguous and arbitrary law enforcement environment they face in China. Intellectual property protection is one of the main topics. U.S. officials also raised this issue during their visit to China this year.

In September this year, US and European business lobbying organizations warned that slowing growth and geopolitical tensions would have an impact on investment prospects, and the confidence of foreign-invested enterprises in China fell to its lowest level in years.

China’s economy fell into great difficulties after the real estate bubble burst. Zhongzhi Group, one of China’s largest shadow lending institutions, is on the verge of becoming one of the largest companies to fail in China in many years.

The Wall Street Journal reported that at a time when China’s economy continues to struggle and the stock market languishes, the company’s collapse may severely damage investor confidence.

According to people familiar with the situation, investors who purchased Zhongzhi products have gathered in social media groups and offline events in the past few weeks, trying to come up with various ways to pressure Zhongzhi Group to repay its debts.

A video showed that during a recent protest, dozens of people held up banners and shouted slogans such as “Zhongzhi, give us the money!” and “Contract fraud!”

The Chinese Communist regime is facing internal and external difficulties. In the past year, the United States and the European Union have called for reducing dependence on China, “de-risking” the supply chain, and working hard to cut off Chinese companies’ access to advanced semiconductors.

The recent geopolitical tensions, from Russia’s war in Ukraine to concerns about whether the Chinese Communist Party will invade Taiwan in the future, have led to more and more foreign-funded companies choosing not to expand their supply chains in China, but to other countries. Countries with which the United States has better relations, such as India, Mexico, and Vietnam, engage in direct investment. This strategy is called “China + 1”.

In the context of more and more countries expressing concerns about supply chain dependence on China, Chinese Premier Li Qiang today expressed Beijing’s desire to deeply integrate into the international supply chain system and not be decoupled from the world.

German media reported that the China International Supply Chain Expo was hosted by the China Council for the Promotion of International Trade, the official organization of the Communist Party of China, and was Beijing’s latest move to attract foreign investment.

Currently, foreign investment in China has dropped to a record low. According to information from Rhodium Group, last year, the greenfield investment announced by the United States and Europe in China dropped to less than US$20 billion. The previous highest was US$120 billion in 2018. At the same time, investment in India will surge by US$65 billion from 2021 to 2022, an increase of 400%.

Editor in charge: Lin Li

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