Coverage: Tech giants meet with Chinese president

Chinese President Xi Jinping met with the tech industry’s biggest names Wednesday in an effort to quell fears that cybersecurity attacks and intellectual property theft in China are on the rise.

New York Times’ reporters Jane Perlez and Nick Wingfield described the situation in the room:

On a day that President Xi Jinping wanted to show off the significance of China’s huge market to American business, the titans of the American tech industry lined up for a 10-minute photo opportunity with Mr. Xi here at Microsoft’s campus.

The first in line to meet Mr. Xi, Mark Zuckerberg, the chief of Facebook, spoke Chinese with him, enough to get a laugh from the Chinese leader.

Among those who greeted Mr. Xi were Timothy D. Cook, the chief of Apple; Virginia M. Rometty, the head of IBM; and Jeffrey P. Bezos, the chief of Amazon. Jack Ma, the head of the Chinese retailer Alibaba, stood in the middle of the executives who had taken part in an Internet forum sponsored by the Chinese and Microsoft.

Mr. Xi told the executives that China advocated cooperation in development of the Internet in line with China’s “national realities,” a phrase that critics say is in contrast to the open Internet in the West.

Mr. Xi told the executives that a “secure, stable and prosperous” cyberspace had become an issue for all countries, a vague reference apparently to the severe disagreements between the United States and China over how to manage cyber-related issues.

Earlier, Mr. Xi and his top lieutenants heard tough criticism of his government’s laws and practices that discriminate against American corporate operations in China.

At a round-table discussion with top American executives in Seattle — including Warren Buffett, Mr. Bezos and Mr. Cook — the Obama administration’s commerce secretary, Penny Pritzker, told Mr. Xi that corporate America had complaints about cybertheft, forced technology transfer and regulations that unfairly discriminate against American companies.

Richard Waters and Geoff Dyer of The Financial Times wrote about the moods of the technology executives going into the meeting;

“I don’t expect the American companies to be complaining in front of him, actually it will be quite the opposite,” said Scott Kennedy at the Center for Strategic and International Studies in Washington. He added that the Chinese president would be able to use any positive comments from the chief executives in his defence, should President Barack Obama attack China over unfair treatment of American companies at a meeting in Washington on Thursday.

Other China experts say that the mood among US business leaders has hit a new low. “In my 35 years following the US-China relationship and participating in it I have never seen a time where the business community, the private sector component of the relationship, has been more despondent,” Jon Huntsman, former US ambassador to China, said last week.

However, Boeing marked Mr Xi’s visit by announcing orders and commitments from Chinese customers worth $38bn at list prices and plans to set up the company’s first plant outside the US.

While tech leaders who met Mr Xi were not expecting to get the chance to air their views ahead of the meeting, a wider group of industry representatives also converged on Seattle for discussions on US-China tech issues.

“No one is running away from the hard issues,” said Dean Garfield, head of the Information Technology Industry Council, a tech trade group, who was at the meetings. He added: “No one is going to solve them here,” but the talks had laid the ground for more constructive discussions in future.

Among the tech alliances unveiled on Wednesday, Microsoft said it would make Baidu the default search engine in its new Windows 10 operating system in China, replacing its in-house Bing service. Baidu dominates internet search in China following Google’s retreat five years ago. Microsoft said it would not pull Bing from China entirely, though its market share there is minuscule, according to independent estimates.

In return, Baidu will promote Windows 10 to its users, joining other Chinese tech companies, part of Microsoft’s latest bid to counter rampant piracy of its software in China.

Shira Ovide and Jeremy Page of The Wall Street Journal laid out what was going on behind the scenes of President Xi Jinping’s meeting:

China’s tech industry was growing notably faster than the average in the industrial sector and its 600 million Internet users and 1.2 billion mobile phone users presented business opportunities for companies such as Amazon, Cisco and Apple, Mr. Xi said.

“China’s economic development will create and sustain an elastic demand for technology capital and products of other countries,” Mr. Xi said.

Mr. Xi’s visit comes at a time of mounting tension with the U.S. over issues including alleged Chinese cyberattacks on U.S. companies and government offices, and China’s commitment to ease restrictions on U.S. investment.

The Obama administration has been urging U.S. technology and other companies to be more vocal about the problems they are facing in China.

China, however, has been using the meetings with business leaders in Seattle to highlight the positive aspects of commercial ties, while playing down tensions in other areas ahead of Mr. Xi’s summit with President Barack Obama on Friday.

“China will open up still wider to the outside world. Without reform there will be no driving force. Without opening up there will be no progress,” Mr. Xi said.

“We are working to build a new open economic system and promoting reform of the foreign investment management system and significantly removing restrictions on market access for foreign investment.”

China wanted more cooperation with the U.S. in advanced manufacturing, clean energy, environmental protection, finance, IT, and modern agricultural infrastructure, and supported large U.S. companies setting up regional headquarters in China, Mr. Xi said.

He said China also wanted investment from smaller U.S. companies and would “stand firm to protect” intellectual property rights.

“The newly established IPR courts are working smoothly. This means there will be much stronger IPR protection which will serve the interests of foreign businesses as well as Chinese companies.”