Xi Jinping, China’s top leader, met with executives of Saudi Aramco, BMW, Toyota Motor, FedEx and dozens of other foreign companies at the Great Hall of the People in Beijing on Friday as China seeks to boost foreign investment amid worsening trade relations between China and the United States.
It was the third time that Mr. Xi has met with executives of multinationals in the past 17 months, courting investment as sluggish growth and tightening national security laws have made global companies wary of making big bets in China.
Fresh foreign investment in China has dropped substantially over the past several years. One exception is the German automotive industry, which sees China, the world’s largest car market, as a place to try to compete with increasingly formidable domestic automakers.
German automakers represented half of new investments from the European Union last year, according to Rhodium Group, a consulting firm. BMW has upped its stake in a Chinese joint venture, and this week announced it would use artificial intelligence technology developed with Chinese tech giant Alibaba in its in-car assistant.
A huge new electric car factory by Volkswagen in central China was one of the few new manufacturing facilities built by foreign firms in China last year. Volkswagen has also purchased a small stake in a Chinese automaker, Xpeng, as part of an approach it describes as “in China, for China.”
The meeting with Mr. Xi came four days after the China Development Forum, an annual economic and finance event attended by global executives. Tim Cook of Apple, Stephen Schwarzman of the Blackstone Group and executives from AstraZeneca, Cargill, Pfizer and FedEx, among others, were in Beijing to attend the forum along with the presidents of dozens of Chinese companies.
Speaking at the forum, Ola Källenius, the chief executive of Mercedes-Benz, talked about how his company had invested in Chinese engineering, including $2 billion spent in China on a long-wheelbase electric car.
Oliver Zipse, the chief executive of BMW, said Germany had not only invested $16 billion since 2010 in its operations in Shenyang in northeastern China, but had also filed an objection in the European Union to tariffs on cars exported from China to Europe.
China tapped $116 billion in foreign investment last year, down from $163 billion the preceding year and a peak of $189 billion in 2022, according to China’s Ministry of Commerce. Much of that money comes from the reinvestment of profits from existing operations.
Tensions between Washington and Beijing have discouraged American companies from making new investments.
Ever-tightening national security laws have discouraged some investors. Five Chinese employees of the Mintz Group, an American corporate consulting firm, were released after two years in detention, the firm said this week. Firms like the Mintz Group that do research or due diligence for corporations have mostly pulled out of China, leaving multinationals without the support they need to check whether potential investments will face legal, environmental or political issues.
Another problem for foreign businesses in China, according to surveys by foreign chambers of commerce, is the deteriorating domestic market. Many industries suffer from severe overcapacity and falling prices. The potential to make a profit from new investments is limited.
Siyi Zhao and Berry Wang contributed research.
