While US-China trade tensions are front of mind for many executives in Beijing, attendees of the US-China Business Council’s (USCBC) Beijing China Operations Conference last week indicated that other operational issues continue in the background. Senior executives from a broad range of industries gathered June 21 in Beijing to discuss key operational issues: tax reform, SOE partnerships, China’s outbound development, and US-China relations.
Andy Rothman, investment strategist of Matthews Asia, highlighted the brighter aspects of China’s economy for multinationals -- a growing consumer economy, a stable housing market, and a problematic but manageable debt load. Andrew Choy, international tax partner at EY in Beijing, discussed recent trends in China’s tax reform, and areas to watch in the future.
Timothy Stratford, managing partner at Covington & Burling LLP’s Beijing office, and Dr. Yukon Huang of the Carnegie Endowment discussed the US-China relationship. While Huang evaluated the current tensions with a number of data sets from his forthcoming book, Stratford discussed the relationship from the more operational standpoint of companies operating here. Huang discussed the importance of considering the global trade balance, rather than just bilateral trade balances, in addition to factors like consumption and savings rates that underpin such statistics. From his perspective as a former USTR official, Stratford discussed the difficulties negotiators face to overcome China’s reliance on state subsidies.
Professor David Li of Tsinghua University, and Jonathan Fritz, the charge d’affaires at the US Embassy in Beijing, addressed USCBC members over lunch. Fritz, while highlighting broad areas of cooperation between the two countries, noted the “rough seas” ahead in commercial relations. Li predicted that US midterm elections are likely to have an impact on any progress reached during negotiations.
Two panels of senior executives met on stage to discuss their partnerships with state-owned companies, and how reforms and the anticorruption effort have affected their joint venture agreement considerations. Closing the day, executives from Autodesk, Chubb Insurance, and Control Risks discussed where their companies found success in the Belt and Road initiative.