President Xi Jinping called on companies to step up innovation and help stabilize employment, reflecting an urgency to bolster China’s economy in the face of the coronavirus outbreak and U.S. efforts to restrict access to key technologies.
In a symposium attended by executives including from Microsoft Corp., Panasonic Corp., Hangzhou Hikvision Digital Technology Co. and Sinochem Group Co., Xi called for companies to invest more in human capital, modernizing supply chains and research and development of new technologies, the official Xinhua News Agency reported. He said globalization was a historic trend, a comment that appeared to push back against countries led by the U.S. that are looking to reduce dependence on China.
“We shall stand on the correct side of history,” Xi said. He added that his government would “stick to deepening reforms and opening up, step up opening up and cooperation in the sci-tech field, advance the development of an open world economy, and promote the building of a community with a shared future for mankind.”
While China’s economy is showing signs of recovery, growth rates are much lower than expected following a walloping from coronavirus. Beijing is now grappling to find ways to stem unemployment and many of the nation’s small and midsize enterprises are struggling to stay afloat. With global markets also reeling from the pandemic, China’s exporters are taking a hit.
Chinese markets responded positively Wednesday, with the tech-heavy ChiNext leading the charge. Mainland equities extended gains, jumping as much as 2.3 percent. Shares of Hikvision, GoerTek Inc. and Wuhan Guide Infrared Co., whose representatives attended the meeting, gained at least 3 percent.
At the same time, the U.S. is also urging countries to divert supply chains away from China while also moving to deny Huawei Technologies Co. access to American technology, making it difficult for the company to design and produce its own chips. The Trump administration is conducting a formal review of TikTok, the addictive video-sharing app owned by the Chinese company Bytedance Ltd., following India’s ban on scores of Chinese apps.
Xi also said China should fully tap the potential of its domestic market and continue to cut taxes.
“In the current external environment of rising protectionism, the downturn in the world economy, and shrinking global markets, we must give full play to the advantages of the domestic super-large-scale market, and add impetus to the country’s economic development by promoting domestic economic prosperity and smoothing out the domestic cycle,” Xi said.
Earlier this month, Xi pledged in a letter to a group of global chief executives to provide a better business environment for foreign firms as the U.S. pushes to rewire supply chains in Asia and Chinese companies come under increased scrutiny abroad. “Your decision to stay and develop in China is a correct choice,” he wrote.