Good morning, Peter Vanham here in Geneva, filling in for Alan.
While the U.S. enjoyed a federal holiday yesterday, Secretary of State Antony Blinken was working overtime in China, a trip that culminated with a meeting with President Xi Jinping on Monday. Blinken's visit sought to stabilize U.S.-China relations after years of trade wars, COVID blame, and tension over Ukraine and Taiwan.
The U.S.'s principal goal, observers said, was to get China to help “bring Russia to the peace table in Ukraine,” and to re-open communication lines to prevent “misperception and miscalculation” on other vital geopolitical pain points, such as Taiwan.
Beijing, meanwhile, seemed to have a different rationale for re-engaging with the U.S.: the need to steady its faltering post-COVID economy and address youth unemployment that's over 20%.
If engaging with the U.S. can help boost Chinese growth and employment, Beijing is all ears. But the U.S. must “respect China and not harm China’s legitimate rights and interests,” Xi told Blinken after their meeting. Taiwan, thus, better not be part of any U.S.-China reset conversation. It is the “most prominent risk” in Sino-American relations, Foreign Minister Qin Gang previously warned.
Many business leaders, too, seem amenable to that deal.
Tim Cook, Elon Musk, and Jamie Dimon returned to China for the first time in four years in the spring. Xi welcomed his “old friend” Bill Gates on Friday to send a message of “hope in the American people." Ken Griffin of Citadel is the latest U.S. business leader to visit Hong Kong. Others are likely to make the trip later this summer, as Blinken and Qin agreed to increase flights between China and the U.S.
Even so, some businesses have had enough of tensions with China. European pharma giant AstraZeneca started drafting plans to “break out its China business and list it separately in Hong Kong,” the FT reported yesterday. AstraZeneca may be one of the first to ponder such a move, but it won't be the last. U.S. companies no longer regard China as the primary investment destination it once was, VOA reported earlier this year.
If that trend solidifies, China’s future may not be as bright as it once was. But for now, trade still flows, and where trade goes, so do business leaders.
More news below.
Peter Vanham
peter.vanham@fortune.com
@petervanham
