Xi says China on ‘correct side of history’

While China’s economy is showing signs of recovery, growth rates are much lower than expected following a walloping from Covid-19

BEIJING • President Xi Jinping called on companies to step up innovation and help stabilise employment, reflecting an urgency to bolster China’s economy in the face of the coronavirus outbreak and US efforts to restrict access to key technologies.

In a symposium attended by executives including from Microsoft Corp, Panasonic Corp, Hangzhou Hikvision Digital Technology Co Ltd and Sinochem Group Co Ltd, Xi called for companies to invest more in human capital, modernising supply chains and research and development of new technologies, Xinhua reported. He said globalisation was a historic trend, a comment that appeared to push back against countries led by the US 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 science and technology 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 medium 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 yesterday, with the tech-heavy ChiNext leading the charge. Mainland equities extended gains, jumping as much as 2.3%. Shares of Hikvision, GoerTek Inc and Wuhan Guide Infrared Co Ltd, whose representatives attended the meeting, gained at least 3%.

At the same time, the US is also urging countries to divert supply chains away from China while also moving to deny Huawei Technologies Co Ltd 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 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 CEOs to provide a better business environment for foreign firms as the US 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. — Bloomberg