Editor’s note: Sign up for CNN’s Meanwhile in China newsletter, which explores what you need to know about the country’s rise and how it’s affecting the world.
China is willing to be “a partner and a friend” of the United States, Chinese leader Xi Jinping told American business leaders in San Francisco on Wednesday, as he sought to woo American companies amid a drop in foreign investment in China.
In a speech evoking decades of shared history and filled with symbols of warm ties between the United States and China, Xi told a dinner event on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum that the most fundamental question shaping bilateral relations is whether the countries are rivals or partners.
“If we regard each other as the biggest rival, the most significant geopolitical challenge and an ever-pressing threat, it will inevitably lead to wrong policies, wrong actions and wrong results,” Xi told an audience that included Apple CEO Tim Cook and Tesla . CEO Elon Musk.
“China is willing to be a partner and friend of the United States,” he added.
Xi received a standing ovation from the leaders. His speech came hours after he held wide-ranging talks with US President Joe Biden, in which the two leaders took positive steps to stabilize the rocky relationship between the world’s top two economies.
The evening, hosted by the US-China Business Council and the National Committee on US-China Relations, gave Xi a chance to appeal directly to US leaders who have grown increasingly wary of China’s economic slowdown and Xi’s tightening grip on the economy , including an expansion of national security that has spooked foreign companies.
In his speech, Xi struck a conciliatory tone, saying China and the United States should not engage in a zero-sum game in which one wins at the expense of the other.
“China has never bet on the US losing, has never interfered in US internal affairs, and has no intention of challenging or replacing the US. China is happy to see a confident, open and prosperous US,” Xi said.
Similarly, he said, the United States should “welcome a peaceful, stable and prosperous China.”
Xi dedicated a significant portion of his speech to highlighting long-standing ties between the American and Chinese peoples — and the important role they played in promoting diplomatic relations.
He reached deep into history to name the “Flying Tigers” – a group of American pilots who helped China fight Japan during World War II.
He also cited his own “unforgettable experience” staying with an American family in Iowa during his first trip to the United States nearly four decades ago. “To me, they are America,” he said of his host family.
Xi recalled entering the United States on that trip through San Francisco, which he said formed his “first impression” of America. The then 31-year-old also posed for a photo in front of the iconic Golden Gate Bridge, a photo he says he has kept to this day.
“This morning, President Biden dug (the photo) out of somewhere and showed it to me,” he said to a round of laughter in the room.
In an effort to promote personal ties between the two countries, China will invite 50,000 young Americans to visit China for exchanges and studies over the next five years, Xi said.
“We need to build more bridges and pave more roads for people-to-people exchanges instead of raising various obstacles and creating a chilling effect,” Xi said.
Dexter Roberts, director of China affairs at the Mansfield Center at the University of Montana, said Xi’s apparently friendly tone was a reflection of China’s economic problems.
China’s economy had a solid start to 2023 after emerging from three years of Covid restrictions, but the recovery fizzled out in the second quarter. It is now grappling with mounting challenges, from weak consumption and a deepening property crisis to a drop in foreign investment.
Earlier this month, a measure of foreign direct investment in China slipped into the red for the first time since 1998, underscoring the country’s inability to stem capital outflows.
“This is not a good time, given the state of the economy, to have hostile relations with American companies and with the United States,” Roberts said. “When the economy goes south, the top Chinese leaders start saying, ‘We want to work with foreign companies and our own private companies’.”
Liu Dongshu, an assistant professor focusing on Chinese politics at the City University of Hong Kong, said China needs to signal its “willingness to open up” amid its economic woes.
“China wants to have a better diplomatic, international environment to increase (business) confidence,” Liu said.
“That’s why China wants to change its narrative a little bit and wants to be nicer and have a warmer tone and attitude to signal that China is still a good place to invest,” he said.
While rising geopolitical tensions are partly to blame for capital outflows, with the US imposing investment restrictions on China’s high-tech sector, foreign companies and investors have also grown wary of increasing risks in the country, including the possibility of raids and detentions.
Under Xi, China has further expanded the reach of its anti-espionage law, raided US consulting and due diligence firms and detained executives in the name of national security, sending a chill through the foreign business community.
Meanwhile, a growing regulatory crackdown has also shaken Chinese business, with more than a dozen top executives from sectors including technology, finance and real estate missing, facing detention or facing corruption probes this year.
Fred Hu, founder and CEO of Primavera Capital Group, told the Bloomberg New Economy Forum in Singapore last week that “Chinese entrepreneurs are laying low or lying flat.”
“This sense of uncertainty, from my observation, in the Chinese entrepreneurial community is real – I haven’t seen it like this since 1978,” Hu said, referring to the year China embarked on a path of reform and opening up in the wake of the Cultural Revolution.
“The biggest priority in my mind is legal reform, is really establishing true rule of law that is essential to the healthy functioning of (a) modern market economy like China is,” he said, stressing the importance of protecting entrepreneurs from ” arbitrary political interference and worse, even prosecution.”
If China “truly commits to the rule of law and market reforms, I think confidence will slowly but surely return, then the animal spirit will be revived,” he added.