Xi Jinping rallies China’s tech champions as rivalry with US intensifies

Xi Jinping has called on Chinese entrepreneurs to align their business strategies with national needs, while promising continued support for their operations
Speech comes amid rising China-US tension and a desire by some foreign firms to reduce supply chain dependence on the country

Xi Jinping

Frank Tang

Published: 7:30pm, 22 Jul 2020

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A leaked list of entrepreneurs who attended a symposium with President Xi Jinping on Tuesday underscores the Chinese leader’s intention to groom home-grown technology champions to better compete with the United States as a trans-Pacific tech rivalry heats up.

The list included a who's who of Chinese hi-tech power, including Chen Zongnian, chairman of Hikvision, a state-owned video surveillance manufacturer on the US entity list, manufacturing titans like Wang Min, the chairman of XCMG Group, and representatives from China’s largest state-owned industrial conglomerates, including Sinochem Group, which trades in energy and chemicals.

The South China Morning Post confirmed the list of delegates with two separate sources after it was posted to Twitter.

Among the 25 business leaders at the conference, more than half were emerging industry leaders in the fields of chip making, artificial intelligence and smart manufacturing.

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Xi called on them to be patriotic and innovative, as the threat of decoupling from the US grows and foreign manufacturers seek to reduce reliance on the country for strategic goods.

The president also asked them to align their business strategies with China’s needs, reminding them that “patriotism is the glorious tradition of our country’s outstanding entrepreneurs in modern times”.

“Marketing knows no borders, but entrepreneurs have a motherland,” Xi said, according to a transcript of his speech published by the official Xinhua News Agency.

The symposium was held amid an increasingly fraught China-US relationship and the threat of a bitter superpower tech war. The Trump administration has already banned the sale of American technology to Chinese firms on the entity list, and lobbied Western allies to prevent telecoms giant Huawei from building 5G infrastructure over security concerns.

Among the representatives from China’s hi-tech world were Zhou Zixue, the chairman of Semiconductor Manufacturing International Corporation (SMIC), which Beijing hopes will help cut the country’s reliance on imported semiconductors.

He was joined by Chen Tianshi, the chairman of Cambricon Technologies, China’s leading developer of artificial intelligence chips; Yin Zhiyao, the chairman of Advanced Micro-Fabrication Equipment, which produces equipment to make microchips; and leaders from hi-tech firms including Guide Infrared and Goertek.

Manufacturers of home appliances, cars, robots and heavy machinery were also present, along with select representatives from the export and commodities sectors.

It is not the first time that Xi has gathered such an audience to deliver a message from Beijing. Amid ideological chaos over the role of China’s private economy in late 2018 – with extreme voices saying private business had completed their historical mission and should be phased out – Xi brought together private entrepreneurs to assure them they were still an important component of the socialist economy.

He has also tried a similar approach with foreign business executives. In the summer of 2018, after US President Donald Trump started a trade war against China, Xi asked American and European businesspeople to help fight “protectionism”. And last week, he wrote to a group of multinational executives promising that China would open its market wider.

China has emerged as the first major economy to rebound from the coronavirus shock, posting 3.2 per cent growth in the second quarter of 2020 after a 6.8 per cent contraction in the first three months of the year.

But questions remain about whether momentum can be maintained in the second half, especially with the pandemic still spreading around the world and relations with the US at all time lows.

Tang Dajie, a senior researcher with the Beijing-based think tank China Enterprise Institute, said many manufacturers were still worried about future orders.

“It remains unclear if export orders can return in a persistent manner,” said Tang, who recently visited the Yangtze River Delta, a major economic engine of China. “Also, the services sector is finding it especially hard to recover to pre-pandemic levels.”

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Delegates from China’s financial and property sector were suspiciously absent from Xi’s talks, but foreign executives from Microsoft, Panasonic and Samsung attended.

Xi thanked the business leaders for their contribution to pandemic control and economic development, saying China was leading the world with “better than expected” second-quarter growth. While Xi acknowledged the “unprecedented pressure” caused by the pandemic on China’s economy, he sought to soothe worries.

“As long as there are green hills, we don’t have to worry about the lack of firewood,” he said.

“In recent years, economic globalisation has encountered counter currents and trade frictions have intensified. Some companies have adjusted their industrial layout to move … this is a normal adjustment of production.

“At the same time, China is the world’s largest market with the most potential and has the most complete industrial supporting conditions.”

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This article appeared in the South China Morning Post print edition as: Xi rallies tech firms as U.S. rivalry intensifies

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