Amid cyber sparring, Xi Jinping to court Boeing, Microsoft for investment

Amid a festering dispute over cyber security and hacking incidents, China’s President Xi Jinping looks set to launch an outreach to US corporate and tech giants during his September 22-24 visit to the US. He would be visiting Redmond near Seattle and Everett where Microsoft and Boeing are located, respectively.

President Xi becomes the fourth consecutive Chinese President to visit the US, the last being President Hu Jintao in 2006. This comes at a time when China’s economy has taken a hit along with its stock markets recording one of the steepest crashes in recent times. The escalating tension between US and China on cyber security has been a major thorn in the relations between the two countries.

Boeing’s factory in Everett is where the massive aircrafts 787, 777 are built. “We’re honoured that President Xi will see our factory and meet the Boeing employees who worked to deliver a record 155 airplanes to China last year,” Boeing Chairman Jim McNerney said. Boeing is said to be looking to set up a facility in China and President Xi’s visit could give further thrust to this deal. Boeing plans to set up the facility in China to finish, paint and deliver narrow body 737 planes. This move by Boeing is seen as a means to win more aircraft orders from China, which is building its own 737 competitor, the Comac C919, which is said to be running behind schedule.

Seattle would be the only place where President Xi is expected to deliver a policy speech. Many of the American tech giants are seeking greater and easier access to China’s markets. As per the current regulations no foreign company can directly invest in China in the internet and telecommunication sectors. Microsoft and Apple do build key components in China, but social networking giant Facebook is blocked in China by the Chinese government. While some see blocking of Facebook as China’s intent to promote its own social networking sites, others see it as a violation against free speech and insecurity that China has regarding American tech companies.

US President Barack Obama is expected to take up the issue of cyber security threats by China and talk tough to his Chinese counterpart. Despite China and US having strong economic ties, they differ on a lot of political issues from China’s domination in South China Sea to China’s treatment of its human rights activists and free speech.

Given that China’s economy has taken a hit and the yuan has been devalued, President Xi’s meeting with heads of US corporate giants could spur American investments into the world’s second largest economy. It remains to be seen whether China would relax its rules for foreign investors in the internet and telecommunication sectors after President Xi’s visit to the US.

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