CDF Dialogue focuses on topics such as the global political and economic situation, business values, international cooperation, and human development, with the purpose of "Dialogue with the world, seek common development", aiming to promote rational and equal communication between China and the world.

This episode, the guest is Evan Greenberg, CEO of Chubb.

Since 2022, several American business leaders have called for a breakthrough in the barriers to China-U.S. economic and trade relations. Evan Greenberg, CEO of Chubb, is one of them.

Chubb is the world’s most valuable insurance company, and Evan Greenberg has been deeply involved in the Chinese market for more than 30 years. He told Fang Jin that he has great respect for the Chinese people and Chinese culture and “I like the Chinese as much as I like the Americans” in the interview. And he hopes the people of both countries can share the same feeling and the relationship between China and the U.S. should be based on mutual trust.

The conversation between Fang Jin and Greenberg focuses on practical issues, such as the economic conflict between China and the U.S. and the challenges faced by multinational corporations under the current China-U.S. relationship.

Greenberg does not deny that there are differences between the U.S. and China. But he believes that it’s a mistake for China to view the U.S. as a declining nation, and the U.S. also should not feel uneasy about China’s rise. Despite the differences in two countries’ governance systems, both sides are pursuing what they see as a path to prosperity for their citizens. If full-scale or large-scale decoupling becomes a goal for either country, it will undermine not just the U.S. and Chinese economies, but the global economy. But he also said that “reduced dependence” is a realistic option for both sides.

The public and private sectors of both countries have a responsibility to continue to expand exchanges between their people. So Greenberg called on the U.S. companies to continue to participate in the Chinese market and do more business with China.

With Chinese transition from high-speed economic growth to high-quality development, Greenberg said that despite its higher market risk, China still has a growth trend in some respects, “its long-term potential returns are reasonable for me.”

Start with simple differences and achieve a modest confidence in each other
‘China makes a mistake in viewing the U.S. as a country in decline, and the U.S. makes a mistake feeling insecure about China’s rise’

Fang Jin: In the past two years, due to the pandemic and other reasons, social and cultural communication between China and the United States has also been hindered to a large extent, and people seem to be putting nationalist sentiments before material interests. According to surveys, the number of Americans with a negative view of China has been increasing at an alarming rate. As a well-known business leader with important interests in both China and the United States, do you think you should persuade the people of the two countries to view bilateral relations as rationally and objectively as possible?
Evan Greenberg: It’s not just alarming to me and disturbing, it’s painful.

I’ve done business, socialized, have deep friendships and a deep respect for Chinese people and their culture, I love Chinese people like I love American people, and I hope the sentiment is true on the other side.

There’s the notion that we may have legitimate issues with each other’s policies, with each other’s directions, with the action of each other, but that’s very different than saying you have a problem with the Chinese people or you have a problem with American people. I reject that notion completely.

Our countries have important and fundamental differences, including the construct of our economies and our governments, regardless of the differences of our governance system, what I do know is each country is pursuing what it believes is its own path to prosperity for its people.

We’re in a difficult time in the relationship between our countries. The level of distrust, the lack of honest and productive communication, at all levels, particularly between our two governments and the growing nationalism being fed by the constituents in both countries for political purposes are at a high, and it’s important to seek ways to ease the current tensions. We need to stop trying to convince each other that what we see doesn’t exist. That’s gonna go nowhere, that's been going on endlessly. We need substantive, purposeful communication and modest confidence building measures that we take together that begin to get us back in the habit of some cooperation and problem-solving we can point to.

Communication doesn’t mean we need to ignore our differences and we just need to start with simple ones, to solve problems that we can solve between ourselves and that would achieve a modest amount of understanding, and maybe a modest amount of confidence in each other.

At the same time, we have to put in place conflict avoidance mechanisms so that things don’t ever spin out and spiral out of control. We have to push off to the future. Those areas of profound difference that we have no foundation for addressing between ourselves right now, we have to put things in different buckets and be more practical.

I think China makes a mistake in viewing the U.S. as a country in decline, it’s a deep misunderstanding about my country, and the U.S. makes a mistake feeling insecure about China’s rise. So both start fundamentally. Both should start fundamentally to solve the problem. We are not natural enemies, at the same time, it doesn’t mean we shouldn't defend our respective interests.

People-to-people relations have suffered during the pandemic, including from travel restrictions. We’re learning more about each other secondhand and that is not a good thing. We all do have roles to play in communication and in creating reciprocal understanding of each other’s actions and relationships are built on trusting communication. They’re built between individuals and we can’t ignore that kind of relationship building. This may sounds simple, but we need that along with purposeful and very frank dialogue, not sloganeering.

Fang Jin: I agree we do have fundamental differences, but we also have lots of things in common and we also have things that we believe we have differences, but those beliefs may change through dialogue. So working together through getting rid of the mistrust by talking and by working together, CDRF will do our best by bringing more people from both sides to engage in discussion, to enhance mutual understanding and even cooperation.
Many economists, including some from the United States, have said that decoupling between China and the United States is economically impossible because the healthy economic and trade relations between the two countries play an important role in maintaining the stability of the global supply chain and reducing inflation. As the bilateral relations continue to plummet, "decoupling" is being invoked more and more frequently in various fields. In your opinion, how can China and the United States establish a mutually beneficial economic cooperative relationship, and what role can or should multinational corporations play in China-US relations?
Evan Greenberg: From an economic point of view, attempts to broadly decouple the U.S. and China are, frankly, misguided and unrealistic.

The balance of trade and investment creates prosperity and value for both countries and it adds ballast fundamentally to the relationship. Such a significant economic relationship between two major economies with different systems inevitably creates tensions and these need to be managed on a regular basis. Reciprocity, providing an equal treatment is an important way. With all that said, we’re invested in each other's future.

There will be cases of decoupling and I would like to say reduced dependencies.

There are products and technologies that have such value to national security, including economic or health security that they justify being produced either at home or among diversified sources, I think that would be true in the view of both countries.

Let’s face it. There’s a lot of mistrust in the relationship, and so you tend to broaden your definition when there's greater distrust than when there’s more harmony. If full-scale or large-scale decoupling becomes a goal for either national, it will undermine not just the U.S. and Chinese economies, but the global economy and competitiveness. It’ll amount to a self-inflicted injury to both countries.

In my mind, full-scale decoupling between the U.S. and China is economically impossible and is not a serious option. In my judgment, it’s a political statement more than an economic statement.

Frankly, an interest-based economic relationship between China and the U.S makes sense and is supported by the facts. Our competition and our tensions grow, our two nation’s economic interests are deeply intertwined and the scale of trade and investment is significant. The cold reality is as trade flows between the U.S. and China have actually been rising even with reciprocal tariffs in place. The 2021 data shows $657 billion is the scale of our trade relationship. In a word, both China and the U.S. are important markets and they’re not going away.

Take a long term view of the development of the Chinese market
‘When a country has a clear sense of its interest, it has stability because it has been thought through.’

Fang jin：China’s economy is in the process of transitioning from high-speed growth to high-quality development. There are concerns and objectives for preserving the environment, for enhancing social equity. We need to improve our communication skills, but I hope the international business community will understand what is going on in China and be more patient about the process and the result.
Evan Greenberg: ‘Patience’ depends on the time scale which you are dealing with. If you are a long-term investor and a builder, as in my case, you view time in one way and the other.

Many investors do not operate locally and honestly know the reality and do not have the same knowledge and insight. They make many decisions more quickly on where to allocate and participate.

Fang Jin: It brings us to the next question. Chubb Insurance has actively participated in developing China’s financial and insurance industry as the world’s largest listed property and liability insurance company. You have also been involved in the Chinese market for over 30 years. In recent years, the Chinese government has actively promoted the opening-up of its financial sector by granting more significant access to foreign financial institutions. So how do you comment on the measures the Chinese government took in terms of financial opening-up in recent years? What is worth noting about this opening-up process given the current international situation and the China-U.S. relationship.
Evan Greenberg：First, I deeply respect China’s finances. Those architecting the financial system and the economy thinks in a strategic sense. Moreover, the opening-up of the financial sector is done clearly through the lens of China’s interest, which makes me more comfortable. When a country has a clear sense of its interest, it has stability because it has been thought through.

The fact that China was until recently the world’s largest recipient of inbound foreign direct investment. It is evidence that your government’s policies to attract foreign investment were working. Though, again of late, those flows have slowed.

My company has been doing business in China for almost 120 years. There have been disruptions, of course. Nevertheless, in the last couple of decades, we have invested and have pending investments in China that total almost $5 billion, which is over 33 billion RMB, making us the second largest foreign investor in China’s insurance industry today.

We have been the largest shareholder of Huatai Group for two decades. Huatai is now the first Chinese financial services holding company that converted to a joint venture. Such developments result from China’s policy to open up the financial sector. In the long term, it creates opportunities for companies like my own.

For any modern economy to develop, it must develop its financial sector and capital markets. It must harness, pool and reinvest into the economy and allocate capital where it achieves a reasonable risk-adjusted return. It is not just somebody’s industrial policy but to be sustainable where it achieves a return for its investors.

The foreign financial services industry is well developed in markets. They bring tools and capabilities. That is the opportunity now, and the Chinese government officials and party officials see that kernel of wisdom.

I have been personally building businesses in China for 30 years, and I have not been investing in China simply. I have been trying to build in China. We aim to support Huatai’s becoming an essential player in the Chinese insurance market.

Insurance is a long-term business. It is more market-oriented, transparent, consistent, and rules-based policies. Economic policies reinforce the confidence of foreign investors, and more would follow suit and do the same. However, they also benefit other participants in the market and the economy as a whole.

Fang Jin: I think insurance is a perfect word, given the current international and domestic situation, especially the increasing uncertainty brought out by the pandemic. How do you view the insurance industry’s role in promoting the high-quality development of China’s economy? Furthermore, how will Chubb integrate its corporate plan with the development of the Chinese market and the development of China’s financial and insurance industry?
Evan Greenberg: As society grows and develops, it has more exposure. People have more things to lose. They reach the middle class, and they become wealthier. They may own homes, and own cars may own other things. They have financial obligations, loans, and protection for their children and their family. It is the same with businesses as economies develop. They become more notions of business responsibility and liability grow. Asset values build, the legal systems evolve, notions of responsibility and the climate changes, the external change. Moreover, with these changes in exposure, people cannot simply rely on the government. They cannot simply go back to zero if something happens to them.

Insurance provides protection. It provides long-term vehicles for savings. Those grow in importance to provide stability to an economy and a society by transferring risk to an entity.

We allow businesses and individuals to take more personal responsibility for their future and to limit their reliance on the state, thus relieving the state of the burden. I think that is a small quantity of China’s interest in the longer term.

We collect financial assets and invest them where they attract the best risk-adjusted return.

Chubb represents a dynamic, highly professional private sector model that can be used to accelerate the development of the modern insurance industry with separate PNC life and asset management subsidiaries. Huatai has nearly 19 million customers and more than 600 branches, and in time, this should become a meaningful contributor to Chubb’s revenue in earnings.

It is part of that one country being invested in the fate of the other country, creating stability and a bilateral relationship.

In a word, China is a market where the risks are high, and in some ways, they are growing. However, they are justified to me by the potential rewards over time. So, I take a long view that requires time, patience, and capability investment.

Multinational company need to be “Good Corporate Citizenship”
‘Many mature multinational companies know and practice the enlightened self-interest’

Fang Jin: What role can or should multinational corporations play in the cooperative economic and trade relationship between China and the United States?
Evan Greenberg: I believe that the choices the United States makes regarding trade will have a huge impact on China-U.S. economic and trade relations and on American national security and global competitiveness.

The insight of private sector could help policy sectors better weigh options and develop policies. Engaging business leaders in public-private sector dialogue is a beneficial strategy for both China and the U.S..

Fang Jin: I agree with you. China and the United States are the two largest economies in the world, and both are largely integrated into the world economy. Therefore, a healthy and stable relationship between China and the United States is not only beneficial to both sides, but also to the world economy.

The world economy is going through a rough patch at a moment with rising inflation and low growth at present. I think the multinational corporations could play a positive role among this, not only through cross-border trade and investment, they are also a vehicle for enhancing competition and innovation. I think the multinational corporations also have reaped huge dividends from healthy and stable bilateral relationships. I do hope more business people like you can come out and play their part in making a positive improvement in the bilateral relationship between China and the U.S..
Evan Greenberg: I agree with you, but I think it’s two ways. I think both Chinese and American multinationals will benefit from outbound trade. That’s in both countries such efforts would benefit from private sector’s insight, in order to better develop policy. Who knows the trade better than the ones who create it and manage it?

During the process, business leaders are brought into the discussion to delineate where those boundaries should be drawn. Based on this, national leaders can set principles to preserve an appropriate balance between national security and national economic competitiveness.

Fang Jin: Social equity is a challenge facing both countries, and Chubb Insurance has been helping the China Development Research Foundation in providing early childhood care and education for disadvantaged children in China’s rural areas with a great positive impact. I think this is a very good example of how China and the U.S. can work together addressing common concerns. So can multinational corporations use these commonalities to promote mutual understanding and cooperation between China and the United States by fulfilling their social responsibilities?
Evan Greenberg: The so-called “social responsibility” is built in a top-down approach instead of only taken by government, so I think each citizen and collective should accept responsibility of the environment around them. As a source of social wealth and collective interest, corporation is able to fulfill and as a mechanism support society’s objectives that are established in social responsibility.I think that a large source of friction and concern in the world today is the gap between the wealthy and the less well-off, and all policy makers in the world are seeking the approach to address this inequity.

As we all know, multinational company generates substantial wealth and lifts people out of poverty, so the regression of global trade is bound to lead to chaos.

We always use the word “good corporate citizenship”, the notion of achieving sustainable development through implementing the corporation’s social responsibility. Corporation and its employees are not just mercantilists, they have the freedom and power to help those who were left behind.

Only if you make these communities better can help your own business set there better. It’s an enlightened self-interest, and multinationals which are sustainable and mature know and practice it. I don’t know a multinational leader who I have a regard for doesn’t want to contribute to the society as individuals.