Finance
China ramps up Wall Street meetings as Trump inauguration looms
Chinese Vice Premier He Lifeng has met with several U.S. finance executives in the last month as Beijing seeks to build relationships ahead of President-elect Donald Trump’s planned tariffs on China.
He Lifeng is one of China’s four vice premiers, and heads the ruling Chinese Communist Party’s economic and finance committee.
He met with BlackRock Chairman and CEO Larry Fink in Beijing on Dec. 5, and Goldman Sachs President and COO John E. Waldron on Dec. 4, according to state media. That followed a meeting with Citigroup CEO Jane Fraser on Nov. 21, state media said.
“The Chinese are seeking all possible avenues to access those now ascending to power in Washington. The Trump Team,” said Peter Alexander, founder of Shanghai-based consulting firm Z-Ben Advisors. “Back channeling is how China operates, even prefers, when building lines of communications.”
Goldman Sachs said it was aware of the reports. The two other financial firms did not respond to a CNBC request for comment.
Trump has filled his Cabinet picks with at least 10 reported billionaires, including two with a finance-heavy background: hedge fund manager Scott Bessent for treasury secretary and Cantor Fitzgerald CEO Howard Lutnick for commerce secretary.
“I do think the Wall Street folks that are coming into commerce and treasury will serve a moderating role on the trade protectionist side,” said Clark Packard, research fellow at the Cato Institute. “It’s all relative because I do think there’s going to be something protectionist on the trade side. Those voices will be the voices that work to mitigate some of that.”
“Especially at Treasury they’re pretty worried about market reaction,” Packard said. “The one thing that can truly maybe scare Trump away from a really aggressive [policy] would be the market reaction.”
U.S. stocks are on track for a relatively rare second straight year of more than 20% gains. After tumbling early this year, Chinese stocks rebounded after Beijing signaled a shift toward stimulus in late September. Chinese authorities on Monday affirmed that supportive stance in a high-level meeting.
‘Keeping its options open’
With actions such as hosting Wall Street executives and imposing export controls on critical minerals, Beijing is keeping its options open, said Zongyuan Zoe Liu, who is Maurice R. Greenberg senior fellow for China studies at the Council on Foreign Relations. “They are preparing for the worst-case scenario.”
But she cautioned that it’s unlikely that financial institutions can do much to mitigate tariffs and tensions with the U.S. “Business transactions and Wall Street executives, one way or another, they would not give up opportunities in any market as long as it fits into their profile,” Liu said.
Chinese financial media summarized He Lifeng’s meetings with the U.S. executives as sending a signal on Beijing’s willingness to open up the financial sector and attract long-term, foreign institutional investment. Foreign capital inflows are often cast by Chinese state media as a symbol of support for the domestic market.
The Chinese vice premier also met with Invesco President and CEO Andrew Schlossberg in Beijing on Nov. 12, and HSBC Group Chairman Mark Tucker on Nov. 14, according to state media. HSBC said it had nothing to add to the report. Invesco did not respond to a request for comment.
U.S.-China capital markets have been “arguably the most dynamic and inter-connected aspect” of the bilateral relationship in the last two decades, said Winston Ma, adjunct professor at NYU School of Law.
“When the cross-border finance relationship is constructive and cooperative, it could lead to MAP, i.e. mutual assured [prosperity]; otherwise it will be MAD, mutual assured destruction,” Ma said, referring to a Cold War deterrence principle.
After ringing the opening bell at the New York Stock Exchange on Thursday, President-elect Donald Trump stopped short of telling investors to buy more stock as he gets set to take office.
“I don’t want to get into a situation where they do and we have a dip or something, because that can always happen,” Trump told CNBC’s Jim Cramer during “Squawk on the Street.”
Trump repeatedly used the stock market as a performance barometer during his first term. In that time, the S&P 500 scaled nearly 68% — reaching all-time highs. Part of that was due to corporate tax cuts passed by the administration at the time. The Federal Reserve also maintained interest rates close to historical lows back then as it tried to spur inflation — also boosting stock prices.
President-elect Donald Trump is greeted by traders, as he walks the floor of the New York Stock Exchange, Thursday, Dec. 12, 2024, in New York.
Alex Brandon | AP
He touted at the exchange on Thursday the possibility of lowering taxes again. “We’re gonna do things that haven’t really been done before. We’re gonna cut taxes still further,” he said. “You pay 21% if you don’t build here. If you do, we’re going to try and get it to 15%, but you have to build your product, make your product in the USA.”
Wall Street CEOs and investors such as Goldman Sachs’ David Solomon and Pershing Square’s Bill Ackman came to the NYSE for Trump’s bell-ringing ceremony. Ackman told CNBC later that “most of the country understands that the more successful businesses are, the more the stock market goes up, the more that their wages rise, the more job growth, the more opportunity, the more businesses who come to this country, it lifts all boats.”
To be sure, while Trump refrained from telling investors to buy stocks now, he maintained a bullish outlook longer term.
“I think long term this is going to be a country like no other. We had the three best years ever until Covid came,” he said after being named Time Magazine’s “Person of the Year.”
—With reporting by Yun Li
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