“I am very happy to see you. We haven’t seen each other for more than three years…and you are an old friend of ours,” Xi Jinping told Bill Gates at a one-on-one meeting on Friday, according to Chinese state news site People’s Daily. The Microsoft cofounder was visiting Beijing to discuss U.S.-China relations with the Chinese president, and was also the only American businessperson Xi has met with privately in years.
After China lifted its strict “zero COVID” border closures in January, other tech tycoons such as Tesla CEO Elon Musk and Apple CEO Tim Cook have visited the country. But no magnate besides Gates has met one-on-one with the president.
China’s economy is currently suffering a huge slowdown in trade and industrial production, and U.S. officials are discussing the possibility of economically decoupling from China—which Janet Yellen recently noted would be “disastrous.” Xi seems to want to avoid an economic implosion and to return to pre-COVID ways of business by strengthening ties in the private sector.
“I’ve just landed in Beijing for the first time since 2019, where I’m excited to visit with partners who have been working on global health and development challenges with @gatesfoundation for more than 15 years,” Gates wrote in a Wednesday tweet.
This week’s trip was Gates’ first return to China since before the start of the COVID-19 pandemic. Microsoft has a of collaboration with Beijing, including a decades-old research institute in the capital city as well as two accelerators (more than it has in any other country) in Beijing and Shanghai. Gates left the board of Microsoft in 2020, but remains its largest shareholder. Since his departure from the company, he has devoted much of his time to his philanthropic nonprofit, the Bill & Melinda Gates Foundation. At Friday’s meeting, Xi told Gates that he wanted to increase collaboration with the Gates Foundation.
Xi’s connection to the Gates Foundation goes back several years, and the president even wrote the foundation a personal thank-you letter in 2020 for emergency COVID-19 funding. Gates and Xi’s meeting comes a day after the Gates Foundation pledged $50 million in a research partnership with the Beijing Municipal Government and the city’s Tsinghua University. Beijing will match the foundation’s $50 million, and the funds will be used over five years for drug and infectious disease research.
The Gates Foundation did not respond to Fortune’s request for comment.
“China has made significant gains reducing poverty and improving health outcomes within China,” Gates said in a Thursday speech at the Global Health Drug Discovery Institute in Beijing. “I’m hopeful China can play an even bigger role in addressing the current challenges, particularly those facing African countries.”
The decoupling backdrop
Gates’ trip comes amid spiking tensions between the U.S. and China. It also overlaps with U.S. Secretary of State Antony Blinken’s visit, his first since assuming the role. Blinken had planned to make the trip in February, but the diplomatic chaos surrounding a Chinese spy balloon in U.S. airspace postponed his visit.
It also comes amid economic challenges for China following the lift of its zero-COVID policy. The government is targeting modest GDP growth of around 5% this year, preceded by a huge drop to around 3% for 2022, one of its worst years in almost half a century. Imports and exports have still not recovered since the country fully reopened its borders, and the Chinese property market is wilting. China’s economic slowdown is so severe that foreign investors are pulling out of the country, and several major foreign banks have slashed their GDP growth forecasts for the country by over 5%. Bank of America cut its forecast from 6.3% to 5.7%, and Japanese bank Nomura downgraded its forecast from 5.5% to 5.1%. Last month, Chinese retail sales and industrial output both fell short of expectations.
The spy balloon, which the U.S. shot down, intensified Washington’s concerns over Chinese espionage. The U.S. government is also wary of TikTok, a Chinese-owned social media platform, which it fears is collecting American data for potential Chinese state use.
The U.S. and China are sparring over international relations issues as well, including Taiwan and trade. Taiwan is an independently governed island that the People’s Republic of China views as a rebel province and seeks to unify with the mainland. It plays a huge role in international trade as the home of the Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chip manufacturer by market share. China condemns the U.S.’s relations with Taiwan, including a highly contentious visit by then–House Speaker Nancy Pelosi in August 2022.
Microsoft is one of the only major U.S. tech firms still operating in China.
[This headline has been corrected to clarify that the Beijing municipal government is matching the Gates Foundation’s $50 million donation, not Xi Jinping’s federal government.]
