Chinese Vice Premier He Lifeng met with several U.S. financial executives last month as Beijing seeks to build ties ahead of President-elect Donald Trump's planned tariffs against China.
He Lifeng is one of China's four vice premiers and heads the Economic and Financial Committee of the ruling Chinese Communist Party.
He met with BlackRock Chairman and CEO Larry Fink in Beijing on December 5th Goldman Sachs According to state media on December 4, President and COO John E. Waldron. A meeting followed Citigroup CEO Jane Fraser on November 21, state media said.
“The Chinese are looking for every possible way to get to those who are now coming to power in Washington. The Trump team,” said Peter Alexander, founder of Shanghai-based consulting firm Z-Ben Advisors. “Back channeling is the way China goes about building lines of communication, and even prefers it.”
Goldman Sachs said it was aware of the reports. Citi confirmed the meeting, while BlackRock did not respond to a CNBC request for comment.
Trump has staffed his Cabinet with at least 10 alleged billionaires, including two with money-heavy backgrounds: hedge fund manager Scott Bessent as Treasury secretary and Cantor Fitzgerald CEO Howard Lutnick as Commerce secretary.
“I do think that the Wall Street people coming into the trade and finance department will play a moderating role on the side of trade protectionists,” said Clark Packard, a research fellow at the Cato Institute. “It's all relative because I think there will be some protectionism on the trade side. These voices will be the ones working to mitigate some of this.”
“Particularly at the Treasury, they are quite concerned about the market reaction,” Packard said. “The only thing that might really deter Trump from a really aggressive person.” [policy] would be the market reaction.”
U.S. stocks are on track for a relatively rare second straight year of gains of more than 20%. After plunging earlier this year, Chinese stocks rebounded after Beijing signaled a shift to stimulus measures in late September. Chinese authorities reiterated this supportive stance at a high-level meeting on Monday.
“Keep options open”
With moves like adding Wall Street executives and imposing export controls on critical minerals, Beijing is keeping its options open, said Zongyuan Zoe Liu, Maurice R. Greenberg senior fellow for China studies at the Council on Foreign Relations. “They are preparing for the worst case scenario.”
But she warned that it was unlikely that financial institutions could do much to mitigate tariffs and tensions with the US. “Business transactions and Wall Street executives, one way or another, would not give up opportunities in any market as long as it fits their profile,” Liu said.
Chinese financial media summarized He Lifeng's meetings with U.S. leaders as a signal of Beijing's willingness to open up the financial sector and attract long-term foreign institutional investment. Foreign capital inflows are often portrayed by Chinese state media as a symbol of support for the domestic market.
According to state media, the Chinese vice premier also met with Invesco President and CEO Andrew Schlossberg in Beijing on November 12 and with HSBC Group Chairman Mark Tucker on November 14. HSBC said it had nothing to add to the report. Invesco did not respond to a request for comment.
The U.S.-China capital markets have been “arguably the most dynamic and interconnected aspect” of the bilateral relationship over the past two decades, said Winston Ma, an associate professor at NYU School of Law.
“If the cross-border financial relationship is constructive and cooperative, it could lead to MAP, or mutual security [prosperity]; “Otherwise it will be FURIOUS, mutually assured destruction,” Ma said, referring to a Cold War deterrence principle.