Back from summit with Biden, Xi heads to Shanghai to boost business confidence

Beijing: Chinese President Xi Jinping is expected to make his first post-Covid visit to Shanghai - the communist giant's commercial hub - on Tuesday, days after his high-profile visit to the US where he promised to "tear down barriers" amidst dwindling foreign investments in the country.

Xi, 70, who presided over the powerful Politburo meeting of the ruling Communist Party on Monday to review guidelines on policies and measures for promoting high-quality development in the country, will visit Shanghai on Tuesday, his first to the commercial hub, the Hong Kong-based South China Morning Post reported.

With a population of more than 25 million and contributing nearly four per cent of China’s economic output, Shanghai is home to some of the biggest foreign investments in the country, including Tesla, General Motors, Walt Disney and the 10-year-old Shanghai Free-Trade Zone (FTZ), a testing ground for China's economic reforms.

There is, however, no official announcement of Xi's visit to the city which was hit hard by a harsh two-month-long Covid-19 lockdown in 2022 during which its population was confined to their dwellings under Xi’s 'zero Covid' policy.

The lockdown was enforced after the city was hit hard by the Omicron variant of Covid-19 for about eight months.

Since, 2021, the world’s second-largest economy has been hit hard by recurring and prolonged lockdowns of various cities which exasperated China's economic woes, denting the business confidence including its once-booming property sector.

Xi's first visit to Shanghai where he was previously the CPC’s boss comes close to his successful visit to the US this month where he had a “strategic and historic” summit with US President Joe Biden during which the two leaders agreed to tone down their harsh policies and rhetoric against each other.

While their summit sparked speculation of a subtle shift in US-China power dynamics, Xi in his address to the APEC CEO summit in San Francisco earlier this month pledged to tear down foreign investment barriers and promised to invite foreign capital with ‘heart-warming’ measures.

"We will strive to tear down the barriers to the flow of innovation factors, deepen reform of the digital economy, and promote free and orderly flow of data in compliance with the law,” he said in his speech aimed at rising sagging business confidence in China leading to shifting of supply chains.

During his trip to Shanghai, Xi is expected to encourage city officials to pursue more market liberalisation to spur cross-border trade and capital flows via the mainland’s gateway city amid mounting worries about China’s decoupling from the West, Ding Haifeng, a consultant at Shanghai financial advisory firm Integrity said.

"Shanghai's role as an economic locomotive will be further highlighted following the top leader's visit," he told the Post.

Observers say China's current economic woes were largely attributed to Xi’s emphasis more on security issues denting business confidence.

"In the past five years, however, security concerns have taken top priority," Post columnist Wang Xiangwei said.

Last year, in his keynote speech at the 20th Communist Party national congress, Xi spoke of pursuing development as the government’s central task but devoted far more time to national security and social stability, Wang wrote in his column in the Post on Monday.

"But, in reality, restoring economic vigour and the confidence of domestic and international businesses is a far greater challenge for China’s leadership, not least because Xi has further consolidated his position as the country’s most powerful leader in decades after eliminating all other political factions," Wang said.

"Now that China and the US are heading for a period of uneasy calm, China’s leadership must take advantage of the window of opportunity to find a better balance between security and development. That calls for a renewed effort to genuinely make pursuing development the government's central task," he said.