China's Xi Jinping, talking to US business leaders, promises better investment climate

Seeking to project a sunny climate for US business, Chinese President Xi Jinping said on Wednesday his country was prepared to greatly reduce restrictions on foreign investment and forecast a long period of economic growth in China, despite recent wobbles.

Xi, who kicked off a week-long trip to the United States on Tuesday wooing Seattle's elite with pop-culture jokes, made his comments to a group of business leaders in Seattle. Soon after he spoke Boeing Co <BA.N> confirmed it had won orders and commitments for 300 planes from China, worth $38 billion.

The stop on the West Coast is the first leg of Xi's trip to the United States and offers him a chance to highlight China's cooperation with U.S. companies before he heads to Washington, where he will contend with the full spectrum of irritants in relations, from tension in the South China Sea to human rights.

"The positive long-term trend in China's economy will not change," Xi told the gathering, despite new data earlier on Wednesday showing activity in China's factory sector shrank to a 6-1/2 year low this month.

Xi said he was aware of risks and challenges facing China's economy, and was adopting more forceful and innovative macro-economic measures to address them. China's recent loosening of controls on the yuan - effectively devaluing its currency to boost exports - ruffled U.S. feathers and was blamed for market turmoil in August.

"I believe that from a long-term perspective, China's economic fundamentals are good," Xi told the gathering, which included Apple Inc <AAPL.O> Chief Executive Tim Cook and Berkshire Hathaway's <BRKa.N> Warren Buffett. He also said, "We are working to create a new open economic system, push forward reform of foreign investment management and greatly reduce the restrictions on foreign investment."

Xi said a key part of that reform would be reducing the scope of the current "negative list" on foreign investment, adding, "Our positive list will be bigger, a longer list. We will continue to build an open and law-based environment." He also said China would greatly strengthen protection of intellectual property. Xi added that he hoped the United States in turn would loosen export restrictions on high tech products and create a fair business environment for Chinese investors in the country.

 

Meeting with Boeing, tech leaders 

After his meeting with business leaders, Xi was touring the Everett, Washington, factory where Boeing makes aircraft such as the 777 and 787 Dreamliner. In addition to the order for planes, Boeing was expected to announce a new Chinese finishing plant for its 737 airliner.

Later on Wednesday, Xi was due to head to the Microsoft campus, where tech executives were set to hold a US-China Internet forum. Facebook Inc <FB.O> CEO Mark Zuckerberg was expected to meet Xi, but Google Inc <GOOGL.O> executives were not expected to attend, according to a person familiar with the matter.

Both Facebook and Google are essentially blocked in mainland China. Google largely pulled its services out of China five years ago after refusing to continue self-censoring its search results. More recently, Google CEO Sundar Pichai has made no secret that he wants to get back into China via Google Play, the app store for its Android mobile operating system. Beneath the bonhomie of Xi's business meetings, serious issues lurked.

A group of 12 Nobel Peace Prize winners called on US President Barack Obama to make a public call for the release of their fellow laureate, Liu Xiaobo, and his wife Liu Xia, during a summit meeting with Xi later this week.

US Secretary of Commerce Penny Pritzker greeted Xi on Tuesday, offering cooperation and support before saying that the US government and companies have "serious concerns" about "the lack of a level playing field across a range of sectors".

On the cyber issue, a hack of personal data from U.S. government workers emerged as worse than previously thought on Wednesday. Hackers who stole security clearance data on millions of Defence Department and other U.S. government employees got away with about 5.6 million fingerprint records, some 4.5 million more than initially reported, the government said.

US officials have privately blamed the breach on Chinese government hackers, but they have avoided saying so publicly.