Chinese investors worried: the rivalry between their country and the US scares them

Chinese business executives see rivalry between United States and China as the “greater uncertainty” and remain optimistic about the markets. “Geopolitics is the greatest uncertainty“said Chen Dongsheng, president and CEO of Taikang Insurance Group. Foreign interest in the Chinese market will depend “on the direction of the next set of policies” by Beijing, according to James Ding of GSR Ventures.

Xing Lu, An executive at Cloopen Group, a cloud communications services provider, said he is concerned that a possible shutdown of TikTok by the United States could affect some of his investments, which rely heavily on the social media giant. to attract new customers. In a thinly veiled complaint that the United States has penalized Chinese electric vehicle makers with tariffs and other restrictions, Nio CEO William Li called for more cooperation, saying the Chinese government has refrained from discriminating against automakers. foreign.

“Geopolitics is the biggest uncertainty,” Chen Dongsheng, president and CEO of Taikang Insurance Group, said at the forum. “The trend of globalization has become decoupling, technological blockade and trade protectionism.”

Graham Allison, a Harvard professor who met with President Xi Jinping and other senior leaders during a recent trip to Beijing, said he returned with good news and bad news. Allison popularized the term “Thucydides Trap,” which describes the historical tendency toward war when an emerging power threatens to displace the existing superpower.

The good news, he said, is that the meeting between Xi and US President Joe Biden in San Francisco in November put a lid on a deteriorating relationship and laid the groundwork for improvement. But it is far from guaranteed that the two countries can compete and cooperate at the same time, he said.

Despite economic challenges at home, Xi is “very much in charge” with “a determined vision to make China all it can be,” Allison said.

“So the bad news: This is a genuine Thucydides rivalry between the fastest-rising power of all time and the most colossal dominant power, at least since Rome,” Allison said. “And none of us are prepared to give much, regarding his position.”

Concern in the Chinese business community

The potential collision comes at a time when the Chinese economy is struggling with a housing crisis and a loss of confidence among consumers and businesses as Beijing intensifies its focus on national security. Chinese stocks have fallen 30 percent in the past three years as foreign investors pulled out.

James Dingmanaging director of GSR Ventures, said whether foreign investors will be attracted to the Chinese market again depends “on the direction of the next set of policies” from Beijing.

“The Chinese government is eager to revive confidence among Chinese and foreign investors as well as the private sector,” Ding said. “I hope it gradually improves.”

Other Chinese venture capital and private equity investors were relatively optimistic.

Although the Chinese economy faces a shrinking population and geopolitical risks, China is producing millions of university graduates, engineers and other professionals and enjoys competitive advantages with an integrated supply chainly a renewed focus on innovation, said Kevin Qi, president of Merger China Group.

“I have more positive talking points about China than negative ones,” Qi said.

Jing Hong, founding partner and CEO of Gaucheness Capital, echoed the sentiment. She said that she is optimistic about Chinese assets and overseas startups led by Chinese entrepreneurs.

The structural shift from a labor- and capital-intensive economy means China needs to boost technological innovation to improve productivity, which represents “a huge opportunity,” he said. He added that China’s stable social and political structure points to more sustainable development than most of its peers.

“Many people see how China has slowed down significantly, but they underestimate how stable the society is,” Hong said. “In the end, it’s not about how much GDP can grow. It’s about which country can protect the bottom half of the population. China did pretty well on that.”