Foreign CEOs Flock to China: Deglobalization Is a Political Problem, Not an Economic One
Deglobalization is coming on strong, yet it can't stop CEOs from lining up to visit China, because decoupling violates economic logic. But what actually drives decoupling isn't economic logic — it's the political logic of the number one guarding against the number two.
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The argument · tap a timestamp to hear it
The only unusual thing about Musk's trip was meeting the foreign minister
Wang Wei takes Musk's 44-hour itinerary apart item by item: meeting MIIT, the Ministry of Commerce, the CCPIT, the Shanghai party secretary — all routine moves for a business representative visiting China, and Bill Gates and Boeing's CEO met the same departments on their China trips. The only thing he found different was that Foreign Minister Qin Gang also met Musk. But he states plainly that this isn't particularly strange; there have been past cases of the Foreign Ministry meeting entrepreneurs, and he guesses it wouldn't be excessively tied to politics. The judgment: the itinerary as a whole is a typical entrepreneur's itinerary, because his factory is in Shanghai, so calling on Shanghai's leaders is only natural.
— Wang WeiA 34 billion gain in 44 hours is sentiment, not fundamentals
Musk's 44 hours in China sent his net worth up 34 billion and returned him to world's richest man. Wang Wei reads this on two levels: on the positive side, it reflects the major economies' and major companies' great expectations that China and the US can reach a settlement in trade, commerce and even politics, and their hope that Tesla plays a role in it and benefits. But he himself takes a more cautious, cooler view and advises against over-interpreting it — the capital market's very character and habit is to love hot topics and chase hot topics; the profit space comes from market volatility, which is itself highly emotional, and it loves chasing things that are murky and imaginative, because only that kind of speculation creates room to profit. He stresses that improving US-China economic relations will take time.
— Wang WeiTrump is a businessman, not a politician, so he didn't generalize the conflict
Wang Wei says he has personally always rather liked Trump, and predicts many listeners may not agree. His reasoning: Trump basically did what he promised the American people, his policies basically landed, and he is a ‘strictly consistent’ man — he said Make America Great Again and he really did move in that direction. The key difference is that Trump is essentially a businessman, not a politician: he didn't make political-level calculations around geopolitics and US military power, all his policies revolved around reviving the US economy, and he didn't generalize the problem — he didn't stir up more trouble in the Taiwan Strait, nor create more tension in the Asia-Pacific. The harshest hand he dealt China was tariffs, but the purpose behind it was bringing manufacturing back to America.
— Wang WeiThe visit script is precise to the minute, but when bosses meet it always changes
Wang Wei has arranged many such things himself, and he gives the mechanism: a business visit has strict itineraries and schedules — whether to shake hands, whether to take a photo, where to take it, what happens at what hour and minute — all must be meticulously arranged, usually precise to the minute, not the second; a mainstream meeting runs half an hour, then extends ten minutes at a time. As the executor he wants the scene to follow the script word for word, but when bosses meet there is usually certain to be change: a handshake that was decided against happens anyway; three topics were planned and they get going and cover five; the first topic goes badly so the next two are dropped. That's when the person handling it needs strong improvisational ability. What topics will be discussed is always known to both sides in advance, and the talking points are basically thought through as well.
— Wang WeiThat ‘casually leaked’ photo was deliberately arranged
A photo of Musk walking with the founder of CATL casually leaked onto WeChat Moments. Wang Wei judges that such media photos are usually not so-called casual leaks; there are only two possibilities: deliberately arranged to look casual, or malicious. This case is clearly not malicious — malicious ones are usually paparazzi shots taken to produce a negative effect, whereas speculation about a meeting between two bosses is all positive. So he believes it was intentional, released through a ‘casual leak’ because they didn't want it too loud or too grand, but did want to send the market a positive signal. He adds that PR departments routinely make this kind of arrangement: what suits official mainstream media, what goes to self-media, what can only come out in a casual way.
— Wang WeiThe CEOs visiting China fall into three groups, representing three different forces
Wang Wei divides the foreign executives who visited China in the first half of the year into three groups: the American group, the European group, the Russian group. US-China relations need no elaboration; Europe was originally an ally following the American big brother, but after Trump came to power the EU and the US no longer had unified interests, and the EU has been trying to seek an independent, autonomous diplomatic and commercial policy position; layered on top of US-China confrontation, China-Europe relations have become more important and more delicate, China-Germany and China-France relations have always been very good, so Macron and the German chancellor each led delegations to visit; Russia is China's strategic cooperative partner, its light industry is relatively undeveloped, and in national power it has to a large extent already fallen behind China, so it needs China's economy to give more support to outward-oriented output.
— Wang WeiChina sending delegations out and foreign CEOs coming in mean completely different things
Wang Wei points to an asymmetry: when the Chinese government sends a delegation to visit a foreign government or company, it means something completely different for Chinese companies — it's an official activity, on one hand an honor, on the other hand many small companies can't get to see that company through ordinary visits, and it's more inward-facing, something you can write into the company chronicle. Going abroad with a foreign government delegation is more a mix of official and private: you may pay to sign up, or you may go yourself without the government organizing it. Conversely, a mid-sized European or American company coming to China may not get to see a minister-level official, because the Chinese government mostly has leaders meet big companies like Tesla. China treats outbound visits more like a political activity; Western governments and business circles are more driven by a single commercial demand.
— Wang WeiDeglobalization is not an economic problem, it's a political one
Wang Wei's core judgment: no country and no company in the world wants to see deglobalization, yet it is really happening and coming on strong, because political factors are layered into it. The US considers the question more from the angle of its own interests and of limiting China's development — this is not an economic problem, it's a political problem. On the economic dimension alone, US-China integration, each taking a different part of the division of labor, is the most efficient, win-win approach; but China's economy is now growing larger and trending toward surpassing the US, its capacity for technological self-reliance is getting stronger, and between number one and number two there usually isn't an easy handover — so the whole series of things the US is doing is meant to limit China's development and prevent China from overtaking America.
— Wang WeiIn their own words · checked verbatim
The capital market's very character and habit is to love hot topics, and to love chasing hot topics.
资本市场它本身的这种特点和习惯就是喜欢热点 并且喜欢追逐热点
Wang Wei7:06
Because in my view there are probably only two kinds: one is deliberately arranged to look casual, and the other is malicious.
因为在我看来可能只有两种 一种是特意安排的 假装随意 还有一种就是恶意的
Wang Wei22:11
As for what a meeting and a handshake represent, I think a meeting and a handshake may not represent anything — you can only say it's a customary practice. But a meeting without a handshake may represent something.
对于会面握手代表什么 我觉得会面握手可能也不代表什么 只能说这是一种惯常操作 但是会面不握手可能会代表一些东西
Wang Wei23:13
If no wolf comes into an environment, then no matter how strong, how excellent a company is, it will probably gradually be stewed soft — a frog in warm water.
如果一个环境里面没有狼进来 那再强 再优秀的企业 可能也逐步会被炖化掉 温水煮青蛙
Wang Wei49:33
Figures
| Length of Musk's stay in China this time | about 44 hours | 2:04 |
| Musk's net worth gain in China this time | 34 billion | 4:53 |
| Musk's previous visit to China | January 2020 | 7:06 |
| Groundbreaking for Tesla's China Gigafactory | January 2019 | 7:06 |
| Foreign executives visiting China for the China Development Forum | more than 100 | 25:16 |
| Business executives in the Brazilian president's delegation to China | 250 | 25:16 |
| Members of the Russian prime minister's business delegation to China | more than 500 | 25:16 |
| China's current economic growth rate | 5% | 39:28 |
| Annual incremental growth rate of the US economy | 2% | 39:28 |
| Length of a mainstream meeting | half an hour | 20:14 |
Glossary
- CDR
- Depositary receipts issued inside mainland China by an overseas-listed company, representing its overseas shares.
- Red-chip structure
- An equity structure in which a China-based operating entity is incorporated and listed offshore.
- FDI
- Foreign direct investment — direct investment by foreign investors in domestic companies, often used to gauge foreign capital inflows.
- International Board
- A board the Shanghai Stock Exchange once planned to let foreign companies list on; it never took shape.
How to listen
Founders, investors and corporate government-affairs leads watching US-China relations, foreign capital flows and government-business interaction — especially anyone who needs to judge foreign companies' China strategy.
15:09-16:09 — a stretch of garbled transcription, safe to skip.