Chip maker Broadcom (AVGO) is one of several U.S. tech firms set to visit China this month for a government-backed investment summit despite the growing geopolitical crisis between the two countries.
China Seeks Foreign Help
The annual China Development Forum will take place next week according to a report in Reuters. Despite the recent geopolitical tensions, including the introduction of pumped-up trade tariffs between China and the U.S., Broadcom is expected to be one of a number of foreign firms making the trip, as are reportedly peers Synopsys (SNPS) and Qualcomm (QCOM). Some, Reuters reported, will even be given the chance to meet President Xi on their travels.
The forum traditionally sets out Chinese economic development plans and aims for the months ahead and tries to secure co-operation and investment from foreign enterprises to help it achieve its goals.
Beijing is eager to attract more foreign investment to revive what it sees, at least, as an ailing domestic economy. That’s despite growth, of around 5%, that most Western countries would snap a hand or two off for. China wants to boost domestic consumption such as consumer goods and is also keen on further developing its technological capabilities, particularly in the area of AI. According to Reuters, foreign investment into China fell just over 13% last year.
Low-Key Americans
It has recently had a renewed love-in with the private sector after a number of years when it was left out in the cold. That means tech companies such as Alibaba (BABA) being promised more support in the months ahead to compete with the U.S.
Other major companies also reported to be attending the event include drugs giant AstraZeneca (AZN), mining behemoth Rio Tinto (RIO), Mercedes-Benz and BMW. Indeed, Reuters pointed out that this year a higher proportion of European CEOs and a smaller number of U.S. peers will be attending. That is likely down to those increased political and economic tensions.
“Any trip to China by American CEOs would be very low-key given the current heightened scrutiny on American investment in China from Washington,” a Reuters source said.
Investors weren’t impressed with AVGO down nearly 3% in pre-market trading.
Is AVGO a Good Stock to Buy Now?
On TipRanks, AVGO has a Strong Buy consensus based on 22 Buy and 2 Hold ratings. Its highest price target is $300. AVGO stock’s consensus price target is $252.20 implying an 29.67% upside.
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