Not long ago, at a dinner in San Francisco where Xi Jinping met with American business leaders, Broadcom CEO Hock Tan spent $40,000 to sit at the same table with the Chinese leader. Chen Fuyang has much bigger things to fight for - he is waiting for China to approve a $69 billion deal.

For months, Chinese regulators have not approved the U.S. chipmaker's acquisition of enterprise software developer VMware, causing Broadcom to delay the closing date of the deal three times; the deal was originally announced in May 2022. The Chinese government has previously blocked a number of mergers and acquisitions involving U.S. companies. Intel's plan to acquire Israeli company Tower Semiconductor for more than $5 billion fell through in August after Chinese regulators refused to give the go-ahead.

A few days after the dinner, China approved the Broadcom deal. The Chinese government also gave Mastercard a long-awaited green light, allowing the New York-based payments processor to issue Mastercard-branded yuan-denominated bank cards in China.

Some observers see China's moves as an olive branch to U.S. companies, which are increasingly wary of doing business in China. Such moves also show how companies could be exploited in the growing geopolitical competition between the United States and China.

Broadcom CEO Chen Fuyang sought an opportunity to meet with Chinese Foreign Minister Wang Yi at the end of October, and ultimately succeeded.

According to people familiar with the matter, as recently as October this year, officials from the State Administration for Market Regulation, China’s antitrust regulator, hinted to Broadcom that it could agree to the deal as long as Broadcom met all conditions imposed by the agency.

However, Broadcom executives extended the deadline to complete the deal after learning from Chinese officials that it would not be a simple business decision. People familiar with the matter said China's Ministry of Foreign Affairs will also have a say in this matter.

With this in mind, Chen Fuyang sought an opportunity to meet with Chinese Foreign Minister Wang Yi at the end of October, and ultimately succeeded, according to people familiar with the matter. Wang Yi was in Washington to pave the way for Xi Jinping's visit to the United States in November, and the foreign minister held talks with American business leaders on the sidelines of the visit.

During the meeting, Chen Fuyang, a Chinese businessman who was born in Malaysia and is now a U.S. citizen, mentioned the Broadcom-VMware deal. Wang Yi responded that the Chinese government continued to welcome foreign investment, but did not disclose what actions China might take, people familiar with the matter said.

Broadcom declined to comment. Mastercard did not respond to questions. China’s Ministry of Foreign Affairs referred the Journal to an official statement on November 21 approving the Broadcom deal.

Eric Zheng, president of the American Chamber of Commerce in Shanghai, said the approval of Mastercard and Broadcom's respective deals were independent success stories that must be viewed in the context of bilateral relations between China and the United States. Member companies of the American Chamber of Commerce in Shanghai believe that uncertainty in U.S.-China relations is their biggest concern when doing business in China.

Zheng Yi said in an interview that these should be standard business practices based on established laws and regulations, and foreign companies hope that such activities will not be politicized.

China has long used access to its vast domestic consumer market to seek geopolitical and commercial concessions. Recently, China has taken advantage of its access to raw materials such as critical minerals and used antitrust approvals to fight back against trade actions it considers detrimental. Chinese officials are also frustrated by some U.S. actions they see as unfairly punishing Chinese companies.

Broadcom, Mastercard and Boeing were among the backers of a dinner hosted by U.S. business groups for Xi Jinping.

While Mastercard gained access to the Chinese market it has sought for years, U.S. plane maker Boeing has been shut out.

China has not purchased passenger planes from Boeing since 2017 due to tensions in U.S.-China trade relations and two fatal crashes of its 737 Max aircraft. Some investors are hopeful that China will resume buying Boeing passenger jets after a friendly summit between Xi Jinping and Biden that eased tensions between the world's two largest economies, but as of Monday, the two sides had not announced a resumption of purchases. . Xi Jinping's dinner with U.S. business leaders such as Mastercard Chairman Merit Janow did not touch on trade issues, disappointing many.

Many business executives cautioned that the recently approved deals were unlikely to prompt significant investment into China, and that the Chinese government still had a lot of work to do to convince multinational companies that they were welcome in China.

A survey released on Thursday by the Conference Board, a New York think tank, showed that CEOs of multinational companies are losing confidence in China as China's economic woes continue.

A survey of 35 CEOs of foreign companies based in China showed that in the second half of this year, an indicator measuring their confidence in China fell to 54 from 72 six months ago. A value below 50 indicates that more respondents responded negatively than positively. The survey, conducted before the Chinese government's recent approval of the deal, included mostly CEOs from U.S. and European companies.

The think tank also found that 40% of CEOs surveyed expected capital investment to decrease, and almost the same proportion expected to reduce headcount in the next six months, compared with only 9% in the first half of this year.

According to an analysis of Chinese data, in the six consecutive quarters to the end of September, the total profits of overseas companies withdrawn from China exceeded 160 billion US dollars; this abnormal and continuous outflow of profits indicates that China is becoming less attractive to overseas capital.

U.S. companies in China still face various challenges, including opaque laws requiring data localization and narrowing access to information within China. Raids on foreign due diligence and consulting firms, including the detention of staff, and exit bans on executives have also made companies uneasy about their operations in China. In addition, doing business in China may also attract scrutiny from U.S. government officials and lawmakers.

James Zimmerman, a partner at Perkins Coie LLP who advises foreign companies on some corporate and regulatory matters in China, said: “This is a business environment of carrots and sticks, and we seem to be In carrot mode.”

He said that in China's business environment, every authorization, license and approval may be a highly politicized process, especially when U.S.-China relations deteriorate.