BOAO, China—Chinese President Xi Jinping today made a commitment to create a more level playing field in his country’s heavily government-directed economy after granting a rare audience to representatives from major multinational companies doing business there.
Executives from Pepsico, Samsung Group, Volvo Group and more than a dozen other companies traded handshakes with Xi while carefully broaching the problems that have bedeviled business success in the world’s second largest economy.
They complained about red tape and restrictions on investment that favour Chinese state firms and outright discrimination because of political problems.
Among the few direct criticisms, Pepsico president Zein Abdalla called for fairer treatment and decried limits on investing in agriculture, which Pepsi wants for its Lays potato chips and Quaker Oats products.
Abdalla said continued investment by the thousands of American companies would depend on Beijing’s pushing ahead with market reforms.
“The better we understand the policy directions and the politics of decision-making in China the better we can plan to commit resources and continue to build successful businesses,” said Abdalla.
Though their investment has helped drive China’s booming economy, foreign businesses often felt their concerns were given short-shrift in the past decade. The previous regime rarely met with them, even as his government pursued policies that favoured state companies, shielded parts of the economy from foreign investment and tried to force multinational corporations into transferring technology for access to the China market.
Xi offered no more than a general commitment to protect foreign companies’ interests, “provide a level playing field for all market players” and continued efforts to make China more attractive to foreign investors. He promised that China’s maturing economy would continue to grow quickly, even if not at the rapid nearly 10 per cent annual pace it has managed in recent decades.
Beyond any commitments, meetings with a senior leader like Xi are extremely useful for foreign business executives because they confer top-level approval. As such, most of the complaints were indirect.
The chairman of Thailand-based agribusiness Charoen Pokphand Group urged better financing and tax incentives for private businesses. The head of Japan’s shipping and logistic company, Nippon Yusen Kabushiki Kaisha (NYK), elliptically referred to the bitter dispute between Beijing and Tokyo over East China Sea islands and the spillover it had on Japanese businesses, which saw imports and sales in China plummet last year.