Chinese hackers have been accused by the U.S. government of breaking into corporate and government systems and stealing information to benefit Chinese companies, or for intelligence gathering.
Xi, however, said his government "will not, in whatever form, engage in commercial theft nor encourage or support such efforts by anyone." Cybertheft and hacking, he said, were criminal acts and should be punished as such.
Xi received a warm welcome to standing applause from some 750 guests gathered at the Westin Seattle hotel, which is serving as his base for a 48-hour swing through Everett, Redmond, Seattle and Tacoma.
Before touching on some of the issues that have brought U.S.-China relations to their lowest point in years, he reminded the crowd, "I am no stranger to the state of Washington and the city of Seattle," presumably referring to his visit as a provincial-level official years ago.
For others in his country, he said, "The film 'Sleepless in Seattle' has made the city almost a household name in China."
He continued the folksy strain, talking about being sent to work in a village as a teenager during the Cultural Revolution.
"Life was very hard," said the Chinese president, adding that this background spurred his desire to improve the standard of living for people in that village.
He then tied that anecdote to a common refrain of his -- the "Chinese Dream" -- in which China is strong and revitalized and its people prosperous, saying economic development remained the top priority of Chinese leaders.
Xi has been running a vigorous anti-corruption campaign -- something that's created factions within China's Communist Party. He told the crowd that campaign is part of necessary economic reforms. "It has nothing to do with a power struggle," he said. "In this case, there's no 'House of Cards.' "
He tried to allay U.S. fears about the Chinese economy -- especially its stock- market plunge earlier this year and the government's devaluation of the Chinese currency. "Recent abnormal ups and downs in China's stock market have caused wide concerns," he acknowledged.
But he said "China's economy will stay on a steady course with fairly fast growth," and reasserted his commitment to shift China from reliance on cheap manufacturing to growth based on the services sector and middle-class buying power.
He also addressed another area of contention with the U.S.: China's proposed laws that would put more restrictions on foreign nongovernmental organizations operating there.
Xi said foreign NGOs' activities wouldn't be restricted "so long as their activities are beneficial to the Chinese people."
China's increased assertiveness in the South China Sea has also raised worries in the U.S. -- which wants global shipping lanes there to remain free -- and in other countries with territorial claims in the area.
Xi sought to ease some of the concerns about China's military ambitions, saying: "No matter how developed it becomes, China will never seek hegemony or expansion."
He said it was important for the U.S. and China to cooperate and manage any differences, because if the U.S. and China "enter into conflict and confrontation, it would lead to disaster for both countries and the world at large."
As Xi spoke on Tuesday evening, protesters gathered nearby, objecting to the country's policies in Tibet and other issues.
Important guest list
The banquet was more than a venue for Xi's speech: It demonstrated the array of U.S. business and political luminaries with ties to China.The head table alone included Bill and Melinda Gates, Gov. Jay Inslee, Seattle Mayor Ed Murray, former U.S. Secretary of State Henry Kissinger, and the chief executives of Microsoft, Boeing and Starbucks -- not to mention the CEOs of IBM, DuPont and Ford, three other U.S. governors and U.S. Secretary of Commerce Penny Pritzker.
Also seated with Xi were his wife, Peng Liyuan; members of the Central Committee of the Communist Party of China; the governors of Zhejiang, Shandong and Shanxi provinces; and the mayors of Beijing and Chongqing, according to the banquet program.
On the menu were several Washington products. A salad from Willie Green's Organic Farm was vouchsafed as "vegan, gluten free, dairy free, nut free." The assembled dignitaries were also offered Double R Ranch Washington beef, wines from Chateau Ste. Michelle and a dessert made with Theo Chocolate.
Welcome at Paine Field
The dinner capped a day that began with Xi's arrival at Paine Field. Xi and his wife smiled and waved as they stepped off an Air China jetliner about 9:30 a.m., then descended a staircase to a sun-drenched red carpet lined with more than three dozen dignitaries.Two children, the 8-year-old son and 11-year-old daughter of a Boeing employee, welcomed the Chinese president and first lady with flowers. Then Inslee, former governor and U.S. ambassador to China Gary Locke, and other VIPs greeted the couple in a short reception on the tarmac amid heavy security.
Xi then climbed into an SUV and his motorcade departed for Seattle.
Those on hand included U.S. Ambassador to China Max Baucus. In a brief discussion with journalists, the former U.S. senator from Montana called China's pursuit of disputed territorial claims in the South China Sea "concerning," adding that the issue is "not to be resolved during this visit."
"It will be on the agenda for the next couple, three years," Baucus said. "It's extremely important, in my judgment, that the issue be resolved according to international norms and international dispute settlements ... rather than use of brute force or trying to push other countries around."
Baucus added that cybersecurity remains a priority in the two nations' diplomatic relations -- so much so that the United States has taken a hard stand.
"The threat of (economic) sanctions ... has brought the Chinese to the table" on the cybersecurity issue, Baucus said. "They were not coming to the table until there was a threat."
Locke, standing before China's presidential Boeing 747-400 jet, noted that this visit marked an important economic milestone for the Northwest.
More than 90,000 jobs here rely on trade to China, and several projects now under development in Washington are receiving heavy financial investments from China, Locke said.
The visit will help to further establish diplomatic relations, Locke said, including seeking common ground on such pressing issues as cybersecurity and climate change.
"There are many areas of common interest between China and the U.S.," he said. "... And there's no substitute for face-to-face dialogue between President Obama and President Xi."
A delegation of 1,000
How large is the contingent from China? Details from China's officials are difficult to obtain. But Starbucks, which had CEO Howard Schultz on the host committee for the visit, told its Chinese employees that the delegation has 1,000 people.Hong Kong's The Standard described the delegation as "a historic lineup of China's business heavyweights." Among them were scheduled to be Alibaba chief Jack Ma and the head of the Industrial and Commercial Bank of China, the world's largest bank.
Xi met Tuesday afternoon with a handful of U.S. governors who joined Inslee at the Westin, and the governors of several provinces in China, as the regional officials signed an agreement to work together on clean-energy technology businesses and ways to combat climate change.
Outside the forum, Gov. Jerry Brown (D-Calif.) said that China seemed to be "as serious ... as a good part of America is serious" about working on climate-change efforts. But "we're not out of the woods yet," Brown said.
Also at the forum were Govs. Terry Branstad (R-Iowa), Rick Snyder (R-Mich.) and Kate Brown (D-Ore.).
Xi met briefly with the governors, and told them China is spending heavily on environmental problems and is very interested in tapping their states' expertise.
While American executives may be eager to reap opportunities in China, their Chinese counterparts visiting with Xi evidently feel deterred from making certain investments here. Real-estate investments in markets such as Seattle have grown rapidly, but Chinese executives still describe how a Chinese oil firm's bid to buy the U.S. company Unocal was turned away for political reasons in 2005.
"For Chinese companies it's not easy to come to the U.S.," said Xu Niansha, chairman of China Poly Group, a media company.
One reason is that many of China's larger companies are either state-owned or share a state-owned heritage, and do not necessarily feel welcome in what can be a politically charged environment.
But "the larger enterprises in China are changing," Xu said. "The time has come for American restrictions on these enterprises (to change)."
Felicia Pullam, a U.S. Department of Commerce official charged with outreach to foreign investors, said all foreign investors are treated equally, and that the U.S. is open to Chinese business.
"We warmly welcome Chinese investment, which is growing faster than investment from any other country," she said.
A busy Wednesday
The Chinese president's agenda for Wednesday begins with remarks at a roundtable meeting for 30 leading U.S. and Chinese business executives. After a visit to Boeing's Everett plant, Xi continues to Redmond's Microsoft campus. Later he'll visit Tacoma's Lincoln High School, and in the evening will host a private reception for invited members of the Chinese community on the West Coast.He leaves Thursday morning for his first state visit to the nation's capital, and then will head to New York for events at the United Nations.
Seattle Times reporters Lewis Kamb, Angel Gonzalez, Evan Bush and Dan Beekman contributed to this report, which includes material from The Associated Press.
©2015 The Seattle Times Distributed by Tribune Content Agency, LLC.
