Xi Jinping tells US delegation China's economy is 'sound and sustainable'

China's economy is "sound and sustainable", President Xi Jinping told an American delegation in Beijing on Wednesday, as he promised more policy support to improve the business environment.

More than a dozen prominent business leaders and academics were at the meeting - one of the biggest US delegations Xi has hosted in years. It comes as Beijing is ramping up efforts to rebuild business confidence in China at a time of economic uncertainty and rising tensions with the US.

A phone call between Ma Zhaoxu, China's foreign vice-minister, and US deputy secretary of state Kurt Campbell coincided with Wednesday's meeting. They discussed "international and regional issues" during the call, a Chinese foreign ministry statement said without elaborating.

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Addressing the American delegation, Xi rejected narratives that the Chinese economy was "collapsing" or "reaching its peak", vowing to create "broader room" for foreign businesses.

"China's reform will not stop and its opening up will not stop," the Chinese leader said, according to a report on state broadcaster CCTV.

"China is planning and implementing a series of major steps for comprehensively deepening reform, and steadily fostering a market-oriented, law-based and world-class business environment. This will create broader room for development for US and other foreign businesses."

The meeting was held at the end of the annual China Development Forum in Beijing, where dozens of foreign business leaders were told that the economy was resilient and would maintain its potential, amid concerns over a downturn.

Senior executives from Blackstone, Bloomberg, Qualcomm, Pfizer and FedEx were among those at the meeting with Xi. Evan Greenberg and Stephen Orlins from the National Committee on United States-China Relations were also seen standing beside Xi in a group photo released by state media.

In a readout released Wednesday, the US State Department said the call between Ma and Campbell was part of ongoing efforts to maintain open lines of communication between the two economic giants and "responsibly manage competition in the relationship".

"They discussed a range of issues important to the bilateral relationship, and other regional and global issues, including areas of difference and areas of cooperation," added spokesman Matthew Miller. "The deputy secretary underscored the importance of maintaining peace and stability across the Taiwan Strait, in the South China Sea, and on the Korean Peninsula.

"He also raised concerns over the PRC's support for the Russian defense industrial base," Miller added, referring to the People's Republic of China.

China has stepped up its charm offensive as it tries to woo foreign investors, introducing new measures last year to expand market access, increase tax and fiscal support and protect intellectual property rights.

Official data shows that foreign investment in China fell 8 per cent last year - the first decline since 2012 - amid tightening regulation, anti-espionage raids on foreign companies and growing tensions with the US.

The US has also increased trade and technology restrictions against China as the rivalry intensifies.

In addition to a semiconductor ban and other measures aimed at curbing China's hi-tech development, Washington is also targeting Chinese electric vehicles with a national security probe and anti-subsidy rules.

Beijing filed a complaint about the "discriminatory subsidies" at the World Trade Organization on Tuesday.

In the meeting, Xi said both sides should show respect and play by market rules.

"In the face of new situations and changes in China-US economic and trade relations in recent years, both sides must adhere to mutual respect, mutual benefit, equal consultation, act in accordance with economic laws and market rules, expand and deepen mutually beneficial economic and trade cooperation, respect each other's development rights," he said.

The two powers agreed to stabilise ties after a summit between Xi and US President Joe Biden in San Francisco in November, and working groups have been set up on areas ranging from trade and counternarcotics to climate change. But issues like Taiwan and the South China Sea continue to strain the countries' relationship.

Xi told the US delegation that the countries' common interests "have not decreased, but have increased" and that they should help rather than hinder each other.

He said that the US should "properly handle sensitive issues, maintain the momentum of stabilising China-US relations, actively explore the right way to get along, and promote the sustained, stable and healthy development" of ties.

"China-US relations cannot go back to the old days, but they can embrace a brighter future," he added.

American executives at the meeting said the San Francisco summit had boosted confidence in the future of US-China ties, and that they appreciated Beijing's recent efforts to further reform and open up, according to the CCTV report.

The report said the American delegation had agreed that the "Thucydides Trap" was "not inevitable".

They were referring to the theory often used to describe US-China relations about the potential for confrontation between a rising power and a dominant one.

Political scientist Graham Allison, a Harvard University professor who was also at the meeting with Xi on Wednesday, was the first to warn that Beijing and Washington could fall into the Thucydides Trap.

According to the CCTV report, the American delegation also said during the meeting that economic relations between the United States and China were "closely connected" and that only through peaceful coexistence could the two countries achieve development and prosperity.

Additional reporting by Mark Magnier in New York

This article originally appeared on the South China Morning Post (SCMP).

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