One American CEO Argues for Mending Fences With China
‘Engagement is in our interest,’ says Chubb’s Evan Greenberg, pushing for an ‘interest-based approach to our economic relationship’
At a precarious moment in relations between Washington and Beijing, a prominent business leader is speaking up in favor of engagement with—as opposed to decoupling from—China.
“We must recommit to an interest-based approach to our economic relationship with China,” Evan Greenberg, chief executive of insurer Chubb Ltd., CB -2.01%▼ is set to say in a speech to be delivered Tuesday. “I believe deeply that America is strengthened by having its companies compete and thrive in the global marketplace, and in China.”
The U.S. business community for years had been the biggest lobbyist for Beijing in Washington. That lobby has splintered in recent years, as China’s gradual turn toward greater state control over the economy has prompted many American companies to slow their expansion in the country.
Many U.S. companies, especially smaller manufacturers unhappy about a lack of market access in China, have cheered a tough U.S. approach toward Beijing. Financial-services firms have remained relatively more engaged at a time when Beijing has broadened access for foreign banks, brokerages and insurers, one of the few areas of liberalization in China’s economy in recent years.
Mr. Greenberg is a former chairman of the U.S.-China Business Council, a lobbying group for more than 200 U.S. companies doing business in China.
Chinese leaders have long viewed his father, Hank Greenberg, the former CEO of insurance giant AIG, as an “old friend of China.” In 2018, when Beijing celebrated the 40th anniversary of the “reform and opening” policy, which brought China closer to the rest of the world, the older Mr. Greenberg was one of the 10 foreigners who received a “reform friendship medal” from President Xi Jinping.
In his planned speech, the younger Mr. Greenberg, whom senior Chinese officials refer to as “Greenberg Junior,” acknowledges that his pro-engagement argument “may invite criticism” because of Chubb’s business interests in China.
“But I’m willing to make the case because I believe engagement is in our interest,” Mr. Greenberg said in an interview Monday. “In aggregate, we have benefited and continue to benefit from two-way trade and investments with China.”
Chubb is increasing its stake in Huatai Insurance Group, a Chinese insurer and asset manager with 11 million customers, to over 50%. When completed, Huatai will account for less than 5% of Chubb’s revenue, according to Mr. Greenberg.
The Biden administration has taken a tough stance on China in the foreign-policy realm, but many U.S. executives and trade associations say its messaging on trade and economic policy toward Beijing has been less clear.
So far, Washington has largely kept in place steep tariffs imposed by the Trump administration on $350 billion of Chinese imports. The Wall Street Journal reported Monday that draft legislation in the U.S. could further redirect supply chains for some strategic products away from China and limit investment in the country.
While the Biden administration is considering ways to reconfigure some tariffs on some Chinese imports to ease inflation, it is also weighing whether to launch a probe into China’s industrial subsidies, potentially adding new punitive measures.
Tentative signs are emerging that some in the U.S. and Chinese governments want to prevent relations from deteriorating further. When Defense Secretary Lloyd Austin and his Chinese counterpart, Wei Fenghe, met in Singapore over the past week, they emphasized the need to maintain open channels while also delivering pointed criticisms of each other.
U.S. national security adviser Jake Sullivan met for 4½ hours Monday with his Chinese counterpart, Yang Jiechi, in Luxembourg, a senior Biden administration official said. The two discussed the war in Ukraine, Taiwan, security in the Indo-Pacific region and other sore spots in the two countries’ relations in what the official said is an effort to maintain communication with Beijing.
Trade with China has been a politically perilous topic in the U.S. since Donald Trump, first as a candidate and then as president, accused American elites of selling out workers. The Biden administration’s backing for U.S. labor unions and its promise to develop a trade policy for the middle class make any opening to Beijing risky politically.
Meanwhile, Beijing has also done its part to promote at least some forms of economic decoupling. Worried about a potential transfer of sensitive data to the U.S., Beijing has essentially forced Chinese ride-sharing firm Didi Global Inc. to delist from the New York Stock Exchange.
Given what many in Washington see as the threats China poses to the U.S. and the U.S.-led international order, some influential voices in the U.S. security establishment have gone as far as criticizing American companies for “underwriting America’s demise” by doing business in China, according to executives and trade associations.
Mr. Greenberg rejects such criticism.
“We can broadly trade with China while protecting and defending our interests,” Mr. Greenberg said in the interview. Of the roughly $600 billion trade between the U.S. and China, he noted, “most is not in the area that’s sensitive to national security.”
The U.S. should work with other countries, Mr. Greenberg added, to hold China accountable for “what we consider to be unacceptable practices” such as market access that gives Chinese companies an edge over their foreign competitors.
In his planned speech, Mr. Greenberg says, “I tell Chinese officials that I believe they are limiting their country’s growth by overplaying the role of the state in their economy.”
China’s tightened restrictions on data, digital services and businesses overall, as well as its stringent approach to controlling Covid-19 outbreaks, have led to some American businesses pulling out of the country, including Microsoft Corp.’s LinkedIn social-media service, Amazon.com Inc.’s Kindle digital bookstore and Airbnb Inc.
Direct U.S. investment in China plateaued in the past decade, hovering between $13 billion and $16 billion in the years from 2010 to 2019, according to analyst Mark Witzke at Rhodium Group. It dropped to $8.7 billion in 2020 and $8.4 billion last year. A slowing Chinese economy and rising geopolitical tensions “significantly cloud the prospects of continued U.S. investments in the country,” Mr. Witzke said.
Mr. Greenberg is scheduled to make his speech at an event jointly held by the Center for Strategic and International Studies and the Peterson Institute for International Economics, two prominent Washington think tanks.
Some other executives also believe there should be a greater debate on how to engage with China.
Jon Huntsman Jr., former U.S. ambassador to China and now vice chair of policy at Ford Motor Co., said at a China-focused conference in Salt Lake City last week that policy makers have to get beyond taking an aggressive stance toward China to instead engage and come up with solutions to the challenges it poses.
“There has to be coexistence,” Mr. Huntsman said at the event, held by the World Trade Center Utah, a trade group advocating for local businesses in global markets.
U.S. and Chinese trade and financial officials used to meet several times a year to hash out market access and other issues. While some U.S. officials and others came to see these meetings as pointless talk shops, they also provided a regular channel to air problems and resolve some issues.
U.S. business groups and lobbyists say that the lack of regular contacts now adds to an atmosphere of uncertainty about the direction of relations.
“Give us clarity. Give us certainty on the rules,” said one lobbyist. “The environment is not conducive to that in either capital.”