CDF: What I learned from talking with 9 global CEOs

It was busy at this year's China Development Forum (CDF) from March 23 to 25. The fact that each company could only bring five attendees didn't seem to shorten thequeues outside the Diaoyutai State Guesthouse.

International participation was up 25 percent year-on-year. I wondered whether the higher attendance was due to concerns or commitments of the international CEOs about the Chinese market and policy direction.

Perhaps it was a mix of both. A desire to huddle, suss things out, as well as to commit to the huge market and seize opportunities.

Politicization of business

Financial services and investment had the biggest contingent of senior management representatives – 22 CEOs.

Head of Bridgewater Ray Daliohas been touring the country in the lead up to the CDF in a media blitz. He has long touted the enormous potential of the Chinese market. Global indexes' inclusion, a storm of regulatory reforms, and unshackling overseas investment: change is finally coming, he said.

Six CEOs of automotive companies also came to the forum, although next month's Shanghai auto show is usually their priority.Car sales are down, but the market remains massive, and fewer restrictions on shareholding mean more room to diversify investment and partners.

Four of the world's top five oil and gas companies sent their head honchos – selling crude is no longer the only game, as China frees up downstream business – refining, retail, petrochemicals. Their partnerships are extending to more private companies, not just the state oil giants.

Nine chiefs of global pharmaceutical companies attended – sales are surging, the drug approval processes have sped up, China has joined international standards bodies, so they had success stories to share.

The world's second largest pharma market is currently not a lead launch market, and there is currently no Chinese company in the world's top fifty biopharma, but a combination of government spending, focus on RD, and the potential to lead in digital healthcare, may change that soon.

These are the American companies that took part last year but did not attend the CDF in 2019: Google, Qualcomm, Palantir, GM, Johnson Johnson. I hope their absence is not due to the politicization of business, and that by 2020, the U.S. team at the CDF will be bigger.

The elephant in the room

"Optimism" and "commitment" were words I often heard from the CEOs I interviewed. I wonder if it is survival bias – the companies that want to talk to a state broadcaster at an event aimed at reinforcing China confidence, are naturally those that are doing well in China.

In a few conversations, I asked straight out, whether the CEOs are telling me what they think China wants to hear, before going to other networks and say how they really feel. Of course, I didn't expect anyone to admit it, since these are PR-trained inhouse-briefed executives of public companies, but I still hoped they would at least tone down their China rah-rah a little.

Nobel laureate in Economics Edmund Phelps, whenspeaking about some of the sessions at the CDF, lamented that "trade, trade, trade, that's all they talk about." I feel that many shared his frustration, but only a few would dare to address the elephant in the room.

Former U.S. Treasury Secretary Larry Summers – who told me a year ago at the same forum that “trade wars are to be avoided at all cost," this year delivered a lunch speech that had some speculating if he'll be asked back, when he equated China's economy in the past to an adolescent that now needed to "act like an adult."

In private he is said to have expounded at length on China's shortcomings. The seasoned Chinese diplomat and politician Fu Ying followed his speech with velvety steel, saying that the U.S. cannot be "selective" on how it wants China to be.

(CGTN)