Panel: Why are U.S. firms deepening presence in China?
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A wave of US executives has visited China in the past week. Meeting with top Chinese officials, why are American firms still betting big on the Chinese market? Welcome to Road Today, the panel discussion with Mi Ge-anna in Beijing.

Chinese President Xi Jinping has met representatives from the international business community in Beijing. Authorities have reaffirmed commitment to create a more favorable business environment and provide improved support for foreign-invested enterprises. Over the past week, heads of some 18 multinationals including Siemens, Apple, Samsung and Pfizer have flocked to China to seek new cooperation opportunities.

with nearly 30 U.S. companies more than any other foreign country represented at the China Development Forum. Prior to the event, British pharmaceutical giant AstraZeneca signed a landmark US$2.5 billion agreement to invest in Beijing over the next five years, the largest single investment in Beijing's biopharmaceutical sector in recent years.

During the meeting with senior Chinese officials, Apple CEO Tim Cook also expressed continued confidence in the Chinese market, emphasizing plans to increase investment in the country from supply chains to research and development centers and to social responsibilities.

Official data has shown that China remains the top destination for transnational investment. Some 60,000 foreign-invested companies were established in China in 2024 alone, an almost 10% year-on-year increase. The return rate of FDI in China has remained at approximately 9% over the past five years, ranking among the highest worldwide.

So to delve into this, we are honored to have three distinguished experts joining us for an in-depth discussion on these topics. They are Anne Lee, expert of China-U.S. economic relations and the author of the book What the U.S. Can Learn from China, Holland Wang, research assistant at the Asia Society Policy Institute's Center for China Analysis,

and Dr. Zhang Gong, professor with the University of International Business and Economics. Anne, let's start with a big picture question here. How would you describe the current state of US investment in China? We've seen companies like Apple announce plans to expand their investment in China.

from supply chains to research and development center and even social responsibility. Based on the statements from major players like Apple, as well as the actions of other U.S. companies, are there any clear trends emerging in terms of industry distribution and investment scale from U.S. firms in China?

I would say that based on recent data, sort of the cumulative direct investment in China is roughly $120 billion, based on estimates by the U.S. Bureau of Economic Analysis and the Rodam Group. And of course, that figure can vary depending on methodologies. I would say the bulk of the investments have largely been in manufacturing, roughly 40, 40, 50 percent in areas like automotive, consumer electronics.

And then the next largest sectors would be in the consumer services, such as like retail food, like Starbucks and McDonald's, entertainment and hospitality like Disney and other hotel chains. And then following that, you would have like business services making investments like consulting logistics firms.

So I think that would be sort of like broad strokes what's happening today. I would hesitate to say there's going to be a clear trend simply because the Trump administration is basically putting –

into place policies that are surprising a lot of people. But if you understand the overall geostrategic goals of what they're trying to do, which is to basically make U.S. supply chains or military supply chains more resilient, they want to ensure that they reduce U.S. vulnerabilities in the event of any confrontation with China or other countries.

countries, that that's going to be the overarching goal. And that's going to impinge on commercial affairs with companies. And I can go on and on of different examples of how I've seen this. For example, I'll give you two. You know, I had a friend who was doing feature films.

for Hollywood. And he went to China to raise capital. But coming back to the States, he was approached by the FBI and they took his cell phone. And then after two hours of them rifling through his private information, they basically warned him and say, don't go to China to do this because they're not like us. And, you know, that was completely shocking to him. And he was very upset

upset because he told them, well, listen, I think I've been around the business world enough to make that judgment myself. But I'm saying that the government can dampen enthusiasm for U.S. companies to do business there. One of my friends told me that his father was a health care executive, went to China, had signed a multibillion dollar health care contract. As soon as he came back to the States, same thing happened. The FBI took him aside, ripped up the contract.

and said you cannot do business there. So even if there is enthusiasm by American companies, it

It can be at odds with the U.S. government and therefore cannot make any conclusions based on like how attractive China's policies are for attracting investments because it takes both sides to agree to that. Indeed, political factors from the U.S. side have become the biggest challenge. Helene, what's your take on this? How do you see the trends changing?

emerging in terms of industry distribution and investment scale from U.S. companies in China?

Oh, I think certainly there is a lot of incentives and desire for U.S. firms to keep engaged with China. There's a lot of good reasons. The market is still quite big and luring for American companies. And I think the people from Apple, the CEO, Tim Cook, has always emphasized it wasn't just the labor costs. It was the sophistication of the supply chains and the infrastructure in place.

So these are still an advantage for the American firms and in tapped in the investing in China but I think as the previous panelists were talking about the political risk is still hovering around the many business decision makers and that's sort of a things that's going to still a salaried unfortunately under President Trump but as long as I think both sides sees the beneficial side of engaging in commercial and business activities and

And I think the desire will still be there and just makes the decision makers and the stakeholders there to do whatever they can under the current circumstances to make things happen and makes the welfare and business good for both countries. So I think the overall trend will still be positive.

But there will be a lot of bumpy roads ahead, given tariffs, export controls, and unwanted national security accusations coming out of nowhere. John, do you share the same stance? Looking at China's economy right now, with industrial output rising 5.9% in the first two months of the year, and fixed asset investment picking up, do you think this positive sign could shape nutrients?

in how US companies choose to invest in China in the near future? Well, I actually disagree a little bit. I think if you ask me about a trend, I'm not shy about saying that the trend is actually towards a very negative territory. The American companies investment in China is inevitably being affected by the geopolitical strategies coming from Washington.

And I think the reason that there are still many American companies are still operating here in China is because of the reasons that you've just alluded to. You know, we have a still a burgeoning economy growing very decently at around 5% a month, sorry, a year. You know, China is still by and large the largest consumer market in the world. I mean, companies like Alipay,

Starbucks Coffee, Apple, these companies targeting the consumer markets are still doing quite well here. So I think the overall view held by a lot of American executives here in China is that for products that are targeting the Chinese market, they're going to continue to stay here and do production here. But if you try to export it back to the United States or to the other parts of the world,

In other words, the role of China being a manufacturing hub that it used to play for supplying products to the rest of the world, including the United States, I think that role is gradually being diminished. I don't think American companies are interested in making investment in that regard anymore.

You know, you continue to invest, to use China as a supplier base for the United States and for the rest of the world. I think that role is really diminished. I mean, they may still make some investments, but I don't think over the long run this is going to be continuing anymore. At the very least, they're trying to find another place, what's called China plus one or China plus N, you know, for places like Mexico and Vietnam.

to serve as a supply base for the US market and other markets in the world. So I'm actually not portraying a rosy picture here, but I think this is a matter of life. I think this white consensus in Washington and across the United States, from left to right, from Republicans to Democrats, there's a white consensus that this economic relationship between

between China and the United States has to be curtailed, has to be rolled back, has to be even to the extent of maybe severing for certain products, for certain goods.

And I think the Chinese side fully understand that. I don't think government officials in China have any illusion about the prospect of this economic relationship. I think the hope is that, you know, this process may take some years. We hope that we can manage this process smoothly. Essentially, it's a process of decoupling or partial decoupling. And the hope is that, you know, managing this process to the extent that it's not going to be disruptive, it's not going to be, you

It's not going to be destructive. It's just going to be a hopefully it's going to be a slow process. And that's OK, I think, from China's perspective. And this may not be in the interest of both countries. But nevertheless, I think this is what Washington has decided unilaterally to do. And I don't think there's anything we can do about it here from China's side.

If that's the case, so be it. So if training is going that direction, I don't think investment is going to do any better. It's probably going to follow the same direction. And again, I think the hope is that this process can unfold slowly, smoothly, and

and most importantly, peacefully. But Professor, according to a recent survey by the American Chamber of Commerce in southern China, U.S. firms in the Asian country are continuing to expand their operations. It says American companies are setting aside about 15 billion U.S. dollars for reinvestment in China over the next three to five years.

That's nearly a 34% increase from previous figures. How do you explain the increased investment by American firms at this point? What you just said has no conflict with what I'm saying here. I think American companies are still investing here in China for the sake of the Chinese market here. In other words, if they're selling things in this market here, they will continue to stay here to the extent possible, and they will continue to invest here to the extent possible.

But when it comes to using China as a base for supplying the United States market, supplying to the rest of the world, I think that role is being diminished. And I think that role is inevitably going to be affected by the geopolitical policies coming from Washington. I mean, the examples of, you know, our lady guest just mentioned, you know, FBI coming in and investigating things. This is going to deter investment. People are not going to invest that way.

You know, I think this is just the tip of the iceberg. You know, more things are coming and more things we don't know what about. The fact that this is a very good market, still growing market, you know, it's very a market that has a very strong purchasing power here. It's the reason that they are investing here. Ho Lan, what's your take? How do you explain the increased investment by American and other Western multinational companies today in China?

I think Professor Ghosn points to a good point. I think to the current extent, the policy pressures from Washington and the desires from politicians on both sides in Congress and across the administration is quite strong. And their desire to rebalance the trade relationships.

But I think for American companies right now, they still see that China is critical to their business, whether it's consumers, whether it's the current supply chain. So I think, as Professor Gong was arguing, they will do to the maximum extent to keep their business in China for the moment. And I think that sort of the increase in investment reflects maybe their short-term estimate that the political pressure will not overwhelm their business anymore.

at the moment. So I think that they were still doing some more business for the foreseeable future, at least in the short term. But in the long term, perhaps if political environments still doesn't change in Washington, there will be more investors getting discouraged. But I said that's something that I think not only just the business community, but the political community and the policymakers would have to work on.

Now, what exactly makes the Chinese market so attractive, not only to those American companies, but also to other Western firms? I think for the Europeans, their consideration is slightly more different. I think as the impacts of the Trump 2.0 era sort of forced them to

sink a little more deeper on the issues of the economic relationships with China. I mean, they previously do have a strong longstanding, strong economic partnership, but in an era of increasing tension between the Atlantic relationships, they will have to reprioritize some of their trade priorities and economic priorities. And I think that their commitment to the Chinese market reflects

at least in some European countries, the desire to sort of make sure that they have a stable. Because we see that U.S. policy is becoming increasingly more unstable under President Trump.

And then they see that China is sort of as a stable market that it could provide at least some semblance of security and stability in this era of increasing turbulence, especially in trade relationships. Anne, would you like to weigh in here taking Apple as an example? Its development in China is often seen as a model of mutually beneficial China-US economic and trade cooperation. So from a broader perspective, what dimensions of the Chinese market are crucial for American businesses?

And do you think this trend will continue? Why wouldn't they? Because there's over a billion customers for them. So that in itself is attractive. But given the political climate, they're going to continue to lobby in Washington to try to get exceptions made so that they don't get certain tariffs or get hit with what Washington wants to do to crack down on COVID.

business with China, but we just can't underestimate that risk that's out there. I think it's very obvious Trump's pressure to divest TikTok or the whole Panama Canal thing where they were forcing the Hong Kong company to sell the canal operations to BlackRock. These companies don't want to be in a situation where they're forced to sell their operations after they've made an investment.

So as attractive as China's economy is, those geopolitical concerns are always in the background that they have to worry about. And unfortunately, national security is always going to trump commercial decisions.

From what all of you just shared, it's clear that U.S. investment in China is quite complex yet full of potential. But as earlier mentioned, the U.S. has introduced a number of tariff policies which have undoubtedly cast a shadow over China-U.S. trade relations. Danan, what's your assessment on their trade in the Trump 2.0 era? What kind of impact have these tariffs had on both sides?

Yes. So I think we're going to see more of that.

In Washington, they basically lump things into different columns of like, okay, these are trading partners that we're going to levy minimum tariffs, like maybe roughly 5% to 15%, and then there'll be the tariffs on countries that we won't have normal trade relations with, and that might be from 40% to 70% rates and so forth. And I think that China's...

exports to the U.S. are going to fall into that 40 to 70 percent rate, which is designed to decouple with China. It hasn't been announced yet, but I'm basically forecasting that that will happen based on the current trajectory of announced policies that they've already done. I do think that if you look at history, we've always seen that when countries start doing these tariffs,

It is basically sort of a prelude to global recession and a decrease in economic activity across the board, which can lead to real live conflict, i.e. war. I hope it doesn't get to that point. But what I see here is that it looks like the tariffs are laying a groundwork for them to do contingency planning to basically try to put various pieces of their military supply chains

so that they know they can depend on certain things if things move to escalate to a conflict. And so right now, it's clearly not there yet, but the steps that are being taken sort of point in that direction. And obviously, you know, history doesn't repeat itself, but as everyone says, it can rhyme. This is sort of what I'm seeing, that, you know, it's not just protectionism, this

possibly could be in preparation for things to come. John, would you like to weigh in on this? What kind of harm have these policies like tariffs or two-way investment restrictions caused to both sides?

Okay, first we have to understand that why these tariffs have been introduced. I think, you know, on the surface there are reasons and excuses being mentioned by President Trump and his entourage. You know, things related to fentanyl, things related to unfair trade, stuff like that. But I think these are all excuses.

bottom line is that he is going to impose tariffs. He is essentially starting a grander social experiment that has been proven unsuccessful in the past. He wants to go back to the McKinley era when the United States was pretty much exclusively relying on tariffs as a tax revenue. But of course, today is a very different picture here. He's not going to be able to rely exclusively on tariffs, but he'd like to see a bulk of the federal taxes coming from the tariffs.

He wants to balance the budget. He wants to reduce the federal deficit and reduce federal debt. You know, these are all notable goals in my view. But nevertheless, I think the way he wants to do it is a proven recipe for disaster in

in the minds of any sane economist. You know, tariffs never works, okay? The history has shown that. But nevertheless, you know, the money has to come from somewhere, right? In a tariffs domain. It has to come from Mexico, it has to come from Canada, come from China, come from Europe. These are major trading partners. That's where the tariffs are possibly can be coming from. At the end of the day, tariffs will be there, okay? So we are entering essentially into a smooth, holy era again.

that the United States is going to build a wall of tariffs. And we know from experience in the past that that's not going to be good for both sides. And nevertheless, you know, that's the reality we have to face. I don't see any way of getting around that. In terms of the harms, I think it's pretty clear that we're going to see a

very significant inflation in the United States, particularly pertaining to automobiles. In my view, the cars in the United States are already overpriced, so much more expensive here in China. And then I think just today or yesterday, President Trump was talking about another 25% tariffs on automobiles. So I think a lot of cars are coming

from Mexico across the Rio Grande into the United States, that has to be taxed by tariffs. I think we're going to see $2,000 to $3,000, $4,000 of increases in car prices very soon in the United States. Now, keep in mind that expenditure on transportation and cars is the second largest expenditure by American households just after housing.

America runs on wheels. People can't live without cars. They have to buy cars. And the average age of cars running on streets in the United States are already fairly old. These secondhand cars are already being sold at very high prices. So prices keep going up. So I think we're going to see inflation for sure in the United States. From China's perspective, we're going to see

exports to the US market, which is currently, oh, I think it's over, if I remember this correctly, $400 billion. This number is going to drop. It's going to drop over time. And I think a lot of Chinese companies engaging in that exports business are trying to find ways to get around that.

They're fairly resilient though. They're trying to find ways to get around that. Different companies have different ways of doing this. But I think eventually, eventually they're going to be running out of ways to get around that. And I think this trade is just going to slow down to a trickle. So that's a loss of business from China's perspective. But nevertheless, I think it's still something bearable. Expose to the US market accounts for

about 14, less than 15% of total exports of China. Some of it will be just lost. Based on my rough calculation in the doomsday scenario that the entire US market exports market is lost.

that would be amounting to something like 1% to 1.5% of China's GDP. And if that's the case, if this can be done over a period of, say, five years, that's still very bearable. I've been advocating that this is a scenario that's very likely to happen. And I'm hoping it's not going to happen.

But unfortunately, you know, I'm not very optimistic about that. I think eventually this is what's going to happen because President Trump is still very popular in the U.S. politically. Even amidst all these drastic revolutionary policies he's been introducing so far,

He still enjoys wide political support. So he has almost three, four years to go. And, you know, the impact is going to be profound and long lasting. Thanks, John and all of our panelists. Anne Lee, an expert of China-U.S. economic relations and the author of the book, What the U.S. Can Learn from China.

haolan wan research assistant at the asian society policy institute center for china analysis dr john gong professor with the university of international business and economics let's have a short break coming back we'll continue our discussion this is real today stay with us

Welcome back to Road Today, the panel discussion with Miike Anna in Beijing. Let's continue our discussion on China-US trade and the growing investment by US firms in China. Haolan, John earlier mentioned this Wednesday President Trump signed an executive order imposing a 25% tariff on all imported cars, which will go into effect on April 2nd. He also mentioned tariffs on timber and pharmaceuticals.

This is certainly shaking things up, right? In the global trade landscape. But when it comes to the automotive industry, which we know has such a broad and interconnected supply chain with parts frequently sourced across borders, then how do you think this tariff policy will impact the global automotive supply chain, especially considering how many U.S. car brands rely on imported parts?

So I think I agree with Professor Gong, is that the current slate of Trump tariff is by its face probably going to be economically very harmful to not only just the U.S. economy, but also the global economy. But unfortunate fact is that the tariff policy, at least for the moment, is very politically popular, especially among members, voters that already support President Trump.

So, the slate of these kind of policies will continue to be add on. And I think you mentioned that the tariff imposed on automobile will be effective on April 2nd, which is an notable date that President Trump has said that he could impose other, I think reciprocal punitive tariff to the counter tariffs and the counter measures issued by European Union, China and Canada.

It's something that is going to be continued. So right now is only the beginning stage of this current tariff war because President Trump think not only just think tariff is a great thing, but he thinks tariff is not only just a means to an end, but also the end itself. And I think as Professor Ghosn said, he wants to use tariff as to supply the American budget. Great thing.

sorts of tax revenues and they will be giving a tax cuts to American business and consumers using the new tariff monies. It doesn't make sense economically, but at least makes sense in sort of political circle. And on the automobile stuff, I think you're quite right that the given living in the Americans, I think even the Americans are not very in favor of the American made cars from the big three. There's still a lot of people driving them, but I think the overwhelming of cars are Japanese made and German made. And, um,

that sort of the tariff will certainly have significant effect on the car price. I think I agree wholeheartedly with Professor Ghosn that the car price over the past couple of years in the America has become already insanely high. And I think it's probably see basically 20 or 30 percent increase of price compared to just five years ago before the pandemic. And right now, I

as the new round of terror going on because the tariff is quite comprehensive not just only for an already made car that imported to america but also a parts or even assembled so certainly we have significant impacts on the current carpet we'll just see wait to see which manufacturer is going to be the first to announce raise of prices and these prices are not going to be just thousands probably

maybe even 10,000s kind of increase for a lot of cars. And ultimately these pains will be felt by the American consumers. And I don't think they'll be very happy about it, but these things do take time and we will see how these affect. But I think it does make significant changes to even the economic relationship with Canada, which

I think as the new Canadian prime minister, who is right now running for election, had sort of made a very tough language today, basically saying the old relationship between the U.S. and Canada is practically over. That's something that's going to be very significant going forward, not just for Canada, but I think Canada is now the first on the chopping block.

but Mexico, the European Union, and hosts of other significant economies. So these economic impact cannot be underestimated. So we'll see how they play out. The global automotive industry is really facing some big challenges. And this policy is definitely going to have

multiple effects on the U.S. economy too, right? And from a U.S. domestic perspective, what kind of a ripple effect do you think we'll see from this terror policy? And what kind of challenges might U.S. car companies face, especially those that have manufacturing plants overseas like Tesla?

Of course, this is going to have major ripple effects. Like I said earlier in my earlier comment about looking at history, what preceded World War II, which the other professor mentions, smooth Harley terrorists. These were on 20,000 different items that were tariffed. And what happened? You had global recession again.

Trade practically stopped and countries basically were all in either depression or recession. And that just fuels nationalism where people get bitter and that fuels the propaganda for war. And so it's a very dangerous place when trade disappears.

because, you know, what replaces it is much worse. We're hoping that this doesn't get to that point. But like I said, if I'm reading tea leaves correctly and just watching the slew of policies that are being announced, that's sort of the direction we're headed. And that's why I mentioned also that I don't think it's just merely to raise taxes. Yes, that is a stated reason for these tariffs.

But I do think that there is some level of contingency planning and they're operationalizing this ahead of any conflicts that they might be preparing down the road. You know, the U.S. has had a history of going in and fighting wars. They probably looked at their portfolio and realized, OK, we can't be the dominant player right now because Russia and China are too strong. And so therefore, we need to take a step back

and bring back car manufacturing and other manufacturing to the U.S. so that we can turn those on a dime to produce other things if need be. And so, you know, I just think it's a very gloomy outlook if we're going to say, you know, where is this leading to? But I would be lying if I said otherwise. And as you said, other countries won't just stand by while this happens. The

And also, Hollande earlier mentioned, like Canadian Prime Minister Carney said, they might consider imposing retaliatory tariffs and reset their relationships with the United States. In your opinion, what consequences could such retaliatory tariffs bring, not only to the United States, but also to the global market? Well, right. You're going to basically slow down the global economy because

Because when there are tariffs, retaliatory tariffs across the board, that means it's more expensive for everyone to do business. When it's more expensive for everyone, then obviously there's just going to be less trade. And so economic activity will collapse. And that would be disastrous for many countries.

It would be disastrous for hiring people. It would be disastrous for inflationary reasons. The whole host of economic damages it would create, whatever your imagination can be. And so I would say that it's a very dangerous road to go down. But many other countries are basically left with no choice because the U.S. economy is very large.

And whatever Trump decides to do will have large ripple effects. I think for countries like China, I think the best they can do is basically create a strong block. And this, again, is repeating history because in the past...

there were blocks of countries that were economically glued together. There's going to be competition here. Like, this is not going to go away. And I think that China's going to have to basically rely on these other countries that are more allied to keep the economic engine going, if that's important to China. But I'm saying that they should not rely on the U.S. because the U.S. fundamentally has very different objectives they want to achieve. Mm.

and that to contain China's growth and advancement in technology and political influence around the world, which is resulting in what we're seeing right now. John, what's your take? Retaliatory tariffs aren't rare in international trade. If Canada goes ahead with these tariffs, it will certainly impact U.S.-Canada trade. But what kind of a ripple effect could we expect from this, the impact on the United States?

Yeah, well, other countries will definitely retaliate and then retaliate by raising their own tariffs. You know, the situation between United States and Canada, it happened before actually, you know, before, first of all, before United States left the world in establishing a WTO system,

United States and Canada were engaged in a long period of economic wars, actually. Both sides imposed very large tariffs. And if I remember this correctly, for over 50 years, there's very little trade between the two countries, even though the two countries share such a long border. And this didn't work out well for both countries, obviously. You can see that the

After the Second World War, there's tremendous economic integration between the United States and Canada. But unfortunately, President Trump decided to roll back that. He's saying that he needs nothing from Canada. He doesn't need oil from Canada. He doesn't need lumber from Canada. He doesn't need cars, reportedly 5,000 cars manufactured annually in Canada and exported to the United States. So obviously, there'll be reduced trade.

In addition to this, I think there are also political implications between the United States and Canada. I mean, look at how the Canadians have reunited to respond to Trump's protectionist policy.

You look at what happened in the stadium, in the hockey stadium. The Canadian team is playing the American team, right? So I think President Trump is essentially disassembling the entire political and economic fabric that the United States actually led.

To establish what we describe as the rules-based order, economic order, international order, this thing is integrating. It was just reported today, I think, that the United States decided to stop payment to the WTO. So it's actually dispensing with the WTO. So I think the entire system, global governance system, is in shambles right now.

We are going back to the days before the First World War. And that's a precarious

precarious predictions for precarious situation that's about to come. I think, you know, if we, you know, actually, of course, from my perspective, I'm more interested in knowing the relation between the United States and China. I think the good thing is that, get back to Anne's point, it's actually an intriguing point, in my view, that reduced trade, high tariffs will have political implications in the sense that it may even lead to conflicts, lead to war. I thought

I totally concur with that thesis. I think history has shown many examples that it's likely to happen. But fortunately, at least in my view, I think at least between the United States and China, you know, I think more likely we're going to see more conflicts in the Middle East, in Africa and some other places. But I think at least in Asia, we still have, you know, very peaceful environment here. Yeah.

And this is precisely because that today's China is very different from a China that's 20, 30 years ago. In terms of military and defense balance between the two countries, I think China and United States are more on an equal footing right now.

And that's actually good for peace. You know, war usually starts between two parties, whereas one is much, much stronger than the other side. You know, the situation between Russia and Ukraine. But when both sides are relatively comparable to each other, peace is more likely to prevail. And that's actually news. That's actually good news for China and the United States. So I think from that perspective, the defense capabilities

progress here in China is actually contributing to peace between the two countries. I think you've raised an important point, which leads me to the next question on Chinese opening up policies. When we look at the Chinese market, China has always maintained an open and inclusive policy in trying to create a better environment for foreign companies to thrive in the country. And many Western companies have benefited from this.

With all these changes happening in the world right now, Haolan, I want to get your perspective. How do you see China's open policy playing out? Well, I certainly think that the water, economic water, regular water is getting quite precarious at the moment. So I think what China is trying to do, because the tariff, I think, as many of the two other panelists have talked about, is not the biggest challenge that China's economy currently faces.

a lot of the internal domestic problem that needs to be solved. But I think in terms of how China is doing its part, it should make sure to inject at least a semblance of stability in this era of quite uncertainty.

And I think this policy of open to business and investment and sort of opening the market access is a sort of a follow up of the just adaption of the reality that current both external and internal economic challenges of China face. So I think it's very positive choices that at least at the moment.

Of course, there are a lot of details that need to work out and more actions than just words, because businesses do listen more to actions than helps from actual policies and plans to assist from the government, from other provincial leaders as well.

So I think just as the sort of the previous leaders in global economic order in the United States is actively destroying, appending, if not just destroying this order, and China as sort of an alternative governor's model could offer this more stable order.

set of formulas that could attract other business partners and other countries as well. And we've seen China take significant steps recently, like releasing the 2025 action plan for stabilizing foreign investment and the signals from the national two sessions, which was just concluded to expand high level opening up. How do you interpret China's foreign openness policy in this context?

Yeah, I agree that China is doing its part. But I would also caution China not to, I mean, to do everything prudently. It's good to try to offset and try to welcome folks. But China also has to look after its own national security and not...

lose sight of that because many countries rely on China to be strong and if China leaves open itself to vulnerabilities for not very friendly players to come into the economy and destroy it somehow then China's gonna be in a much worse place because they chose to be open and not be smart about it.

One instance of that would be, say, in financial services, right? China specifically have open access to all the financial institutions, to U.S. financial institutions, like there are certain limits, because they could see the damage that having wide open access would lead to. We've seen in history how George Soros'

hedge fund, you know, could take down entire countries. And with the whole European Union almost, you know, breaking up the whole euro because of a lot of the shorting that was going on when they had a crisis a number of years ago.

And so I think that it's good in principle, but the devil's in the details. And so any open policy must be thought through very carefully to make sure that there aren't China's not leaving itself open to problems down the road.

John, how do you view the concern brought up in such a complex environment today? How has China striked a balance between opening its doors for cooperation and safeguarding its national security? Yeah, well, it's interesting that, you know, you look at the history, what are the countries that, and when are these countries actually advocating free trade, you

And the countries that have been advocating free trade are usually the countries that are very strong in terms of their exports, their big trading nations. When they stop being like that, then they start to talk about fair trade, secure trade, that kind of thing.

So right now, China is in a position to talk about free trade. And in a way, we're actually acting very much like what the United States used to do in the 1960s. It's doing very well. The exporting industry is very strong, was very strong in the United States at the time, established WTO and inviting countries to make investment in the U.S. Today, China is doing more or less the same thing. What is the...

Whereas Washington is actually retreating from that position. So that's an interesting observation in my view. Now, in terms of striking a balance between open access against national security issues, the national security is an ever-expanding basket.

right now. Washington is doing that. Hopefully China is not doing that. As a matter of fact, there's actually an article in the GATT agreement, WTO, regarding this issue. It provides an exemption of national security against free trade.

Now, this exemption only pertains to very restrictive cases, things like the war, things related to the development of nuclear weapons, those kinds of really military in nature kind of things. Nevertheless, today, we interpret national security, so many things of national security, right? Steel is a national security issue. Luminance is a national security issue.

I guess, cars is a national security issue. Vitamin is a national security issue. So, you know, it's ever-expanding. So, you know, I think absolutely we need to strike a balance here. You know, this gets into domestic politics, I guess, because, you know, both ends of this issue we're talking about are steered by different ministries and they have different missions and they have different objectives. I think this has to come from the top. You know, overall,

But I think, to be fair, so far, we haven't done a fairly bad job in terms of striking a balance. I think the Chinese government's position is still very much towards an open market, an open economy. And hopefully, this national security issue can be addressed with reasonable policies. That's also quite a sensitive issue, I guess.

That's all I have to say about this matter. John, as Anne mentioned at the very beginning, U.S.-China cooperation requires efforts from both sides, right? It's also a crucial question of how U.S. companies can better balance the Chinese and American markets

seize development opportunities in China, meanwhile mitigate the negative impact of the policies from Trump administration. Then building on our earlier discussion, how do you think U.S. companies can make the most of opportunities in China right now?

Well, first of all, I think the phrase China-U.S. cooperation is not in the vocabulary held by Washington these days. They're talking about competition. I think Beijing is still talking about cooperation between big powers. That's the phrase they use in a diplomatic circle. But I think Washington uses a different phrase. They're talking about competition, not cooperation.

Nevertheless, I think even in this kind of environment, there are still opportunities for American companies operating in China.

I think American companies operating in China, their benefits can come from several aspects. One, of course, take advantage of the huge market. It's a fast-growing market with increasing purchasing power. And the Chinese consumers are very accommodating towards new ideas, new products.

new services, these kind of things. So I think this is a very good opportunity for American companies. But I think in addition to this, it's also a place where American companies can

can avoid lagging behind. Let's be honest here, the market here in China represents the cutting edge of the emerging technology. Things are happening very fast here. You look at the electric cars, you look at other consumer gadgets, it's evolving very fast. AI is being rapidly deployed here. There's not much of a restriction from a political, from a religious perspective.

all wild things are happening here. And in this very rapidly moving, evolving cycle, American companies' participation can afford them the ability to keep up with the latest. Granted, it's an intensely competitive market here. And I think the indigenous companies are doing also very well. They're rapidly rising. They're posing formidable challenges.

challenge and challenges and competitive threat to American companies operating here. That may not be a bad thing at all, actually, right? I mean, you know, you can hide the best talents here. You can come up with, you know, cutting edge products here and you can test with the

the most accommodating consumers in the world in this market. So I think it's not just a matter of making money, it's also a matter of keeping competitive in this market here. And the third thing is that I think overall, if you look at the cost, the salary level, the wage level, I think China is still a fairly good place to invest.

Even amidst the fact that over the years, over the decades, the costs have been rising. In trade theory, we know that there's this theorem about the factor price equalization. It's rapidly happening here. Nevertheless, it's still quite affordable to do business here in China compared to

North America and European Union. And you can still high talents here and the labor market, the labor force, the engineering force are still something to be very good to be tapping to. So I think here in China from a multinational company's perspective, it's still a good place to make investment even amidst all these challenges arising from the geopolitical space.

Today, as John said, China's economy is not only progressing steadily, but also advancing rapidly in innovative fields such as artificial intelligence and offering even more opportunities for foreign enterprises.

Haolan, from your professional perspective, what specific advice and strategies would you offer for US companies looking to expand in China? Sure. I think right now it's not an easy environment to operate for American firms in China. There are a lot of watchful eyes in Washington that are not favorable to any of their actions in China, to be frank.

But I think this is also a different era to invest and enter the Chinese market. You can't just be assuming that you're a big brand around the world or in America and can just succeed in China. I think we've seen a lot of examples of hardships or even failures of those kind of attitude.

So I think it's important, I think, for the US firm to first adapt to the local preference and to make sure that they understand the needs and what they're trying to get from the Chinese market, whether they're trying to tap into the Chinese consumers, which is the West and developing because China is gradually expanding its middle class and its behavior to consumer goods.

But I also think the type of perhaps supply chains, the exposure they want to have in China, and to make sure they do not attract even more scrutiny from Washington and from other actors.

But I think just leverage a lot of these good systems is also important. So joint ventures, which has always been in place as sort of a strategy. The strategic partnership is going to be very important for a lot of these American businesses who are not very familiar with how to operate in China, even these days. I think they could definitely help navigating regulations because there are a lot of new regulations being implemented by the Chinese authority as well.

So I think in the end, perhaps they also want to engage with a lot of local partnership because we have seen some great examples of Tesla with the Shanghai municipal government. So if you can secure a very long-term strategic partnership with some of the more municipal and local entities, that could be greatly helpful to their business operations. So I think just identify their goals, their strategies, pick right partners, and I think engage in partnerships

meaningful dialogue and long-term relationships and partnership with relevant authority. So I think that's sort of a good street strategy for American firms that still trying to operate in China these days. And what practical advice would you recommend for US companies seeking to grow their presence in China? I would say that the best thing they can do is to lobby Washington to

to let them do more business in China. I think that is really the biggest obstacle for many of them. I think China has done its part, but again, the political backlash that these companies can get for trying to reach out to the Chinese market is pretty formidable. And

So my advice would be to try to convince the U.S. government to change their mind on certain things. And I don't know what that's going to take. Yeah, those were really valuable insights. A big thank you to our three guests for their fantastic insights and thoughtful discussion today. As the world's two largest economies, we hope that China and the U.S. can find ways to communicate better, overcome challenges, and join hands to support global economic growth.

Thanks again to our experts and to all of our listeners. That's all the time for this edition of Road Today with me, Guiana, in Beijing. Until next time.