Elon and Jamie

Jun 1, 2023

A CNBC headline exclaimed, “A flood of US execs head to China.” CNN dubbed it a “flock.” A trickle would probably have been a better choice of words. Yes, two high-profile CEOs, Elon Musk of Tesla and Jamie Dimon of JP Morgan, were back in China this week. But in the aftermath of unusually scarce attendance of US CEOs at the China Development Forum in late March, the Musk-Dimon tag-team hardly represents a stunning about-face.

Tesla, of course, has a major commitment to China — both as an offshoring platform (cars and soon, batteries) for its higher-cost US capacity and as a toehold in China’s rapidly growing domestic EV market. Musk, who hadn’t been to China for over three years, was making the rounds as any responsible CEO would do. While he met with several senior Chinese government officials during his two-day whirlwind visit, he did not meet with the new Premier, Li Quang; instead, he had to settle for Vice Premier, Ding Xuexiang. By contrast, on a visit in 2019, he did have a one-on-one meeting with former Premier, Li Keqiang. As a former senior executive of a US firm, I can attest that this is pretty much standard operating procedure in China.

Jamie Dimon was in Shanghai in a different capacity — as the official host of JP Morgan’s China investor conference. Like Musk, due to Covid, he hadn’t been to China since 2019 — so his return was especially welcomed in China. Apparently, the theme of the research conference was “We are Back!”— reinforcing China’s own post-Zero-Covid reopening mantra.  Dimon, however, delivered more of a mixed message than the Tesla pitch — stressing, on the one hand, the predictable statements of JP Morgan’s commitment to growing its China business while at the same time warning of the risks and complexities of the escalating US-China conflict.

I do not want to dismiss the significance of these two visits. Fearful of retribution in increasingly toxic anti-China political climate, the US business community has been uncharacteristically silent over the past several years as the US-China conflict has intensified. At least, Musk and Dimon showed up in Shanghai, and, in doing so, made special efforts to walk a delicate line — stressing, for example, the tricky distinction between the diplomatic construct of “de-risking” over decoupling.

These visits also serve the useful purpose of underscoring the way it used to be in the US-China relationship. As I noted on these pages a few weeks ago, since the Nixon-Kissinger visit of 1972, the relationship had long been anchored by economics and trade. But now, with security concerns front and center for both nations, the old anchor has all but been lifted. The media is trying to make the Musk-Dimon visits into a big deal — a confrontation between America’s still-strong business interests and Washington’s increasingly tougher anti-China policy stance. US business leaders, including Elon and Jamie, know full well how difficult it will be to go back to the way it was and re-anchor an increasingly fraught US-China relationship.

You can follow me on Twitter @SRoach_econ

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