Elon Musk, Tim Cook and Larry Fink will be on President Trump’s flight to China this week for a very important attempt to get deals done during a meeting with Xi Jinping. The White House wants China to agree to actually buy things, and are prioritizing aviation and agriculture.
Business calculus behind the Beijing push
A White House staff member said leaders from the car, technology, finance and airplane industries were invited. Elon Musk of Tesla, Tim Cook of Apple and Kelly Ortberg of Boeing are the most important business people going, and they are joined by David Solomon of Goldman Sachs, Stephen Schwarzman of Blackstone, Larry Fink of BlackRock, Jane Fraser of Citigroup and Dina Powell McCormick of Meta.
The trip, happening May 13-15, will have more than twelve of the top bosses of companies. The government hopes having these powerful business leaders with them will help get business deals and new money coming into the country after they meet with China’s leaders.
Aviation emerges as the swing sector
From what we’re hearing, a major goal is a huge deal for civil airplanes. Kelly Ortberg from Boeing is expected to try to get China to order as many as 500 737 MAX planes, and also a number of larger, long-distance planes.
If this happens, it would be the first big order from China for Boeing since 2017 and could be the biggest airplane order ever. Doing this would mean that the normal ways of doing business, which have been difficult in recent years, are starting up again.
Here is what is at stake as the delegation lands in Beijing:
– Potential record Boeing order reshaping global aircraft backlogs
– Visible progress on purchase agreements with Beijing
– Signals on US-China business ties after years of friction
– Agriculture commitments that ripple through commodity markets
– Tech access limits despite Nvidia’s H200 export clearance
Tech heavyweights attend, chips take a back seat
Aside from airplanes, the list of people going shows how much Silicon Valley and payment companies rely on China. People from Meta, Cisco, Qualcomm, Visa and Mastercard are expected to be there, as are people from industries that do a lot of making things and selling to customers in China.
However, Jensen Huang from Nvidia isn’t going. Reports indicate that the White House is prioritizing farming and airplanes over the most advanced kinds of computer chips on this trip, even though the government recently allowed exports of H200 AI chips to China.
Those Nvidia deals are supposedly being delayed because Chinese companies are having trouble getting permission from their own government to do them. So, without the chips being the focus, those negotiating are looking for quicker, more immediate victories that China can do on a large scale.
Why Musk and Cook matter in Beijing
Musk and Cook have a lot of power going into this. Both Tesla and Apple do a huge amount of production and selling to customers in China, so they’ll have a big say in things as Washington tries to make business relationships more stable and get China to promise to buy more.
Their being there is also meant to send a message. If the leaders of consumer tech companies think they can do business in China in a way that they can count on, it could encourage them to invest more money, in addition to any big deals made with airplane or farming products.
What comes next
For Wall Street, who is going on the trip suggests where we might hear about deals first. Financial leaders such as Solomon, Schwarzman, Fink and Fraser will be watching to see if the airplane purchases come with more general agreements that suggest a more consistent stream of deals.
In the end, how successful the trip is will be judged by the actual contracts that are signed after the meetings with Xi Jinping. The dates, May tth to 15th, are important and the goal is clear: turn the power of the CEOs into signed contracts, or come back with only statements.
