China widens open door
AUSTRALIAN shares and markets across Asia have lifted after China’s president, Xi Jinping, promised to widen market access for foreign investors, a statement that helped ease concerns over a potential trade war between the US and China.
President Xi’s comments boosted the Australian dollar, while US share market futures were also higher.
The benchmark S&P/ ASX200 index gained 48.3 points, or 0.83 per cent to 5857.0 points yesterday, while the broader All Ordinaries index was up 47 points, or 0.8 per cent, at 5951.7 points.
President Xi, in a speech to the Boao Forum economic conference in China yesterday, promised to cut car import taxes, open China’s markets and improve conditions for foreign companies.
He said China would take measures to liberalise car investment, significantly reduce tariffs on cars this year and protect intellectual property – all areas high on the list of Washington’s demands.
“Economic globalisation is an irreversible trend of the time,” President Xi told the Boao Forum for Asia.
“The door of China’s opening up will not close – it will only open wider and wider.”
President Xi pushed measures in areas that have triggered the ire of US President Donald Trump.
“When a car is sent to the United States from China, there is a tariff to be paid of 2.5 per cent. When a car is sent to China from the United States, there is a tariff to be paid of 25 per cent,” Mr Trump tweeted on Monday.
“Does that sound like free or fair trade. No, it sounds like STUPID TRADE – going on for years!”
Without directly responding to Mr Trump, President Xi promised China would lower import tariffs for vehicles and other products but gave no details or an exact date for taking the measures.
Beijing’s restrictions on foreign ownership in the car sector have forced foreign companies to partner with Chinese firms and share their technology.
InvestSMART chief market strategist Evan Lucas said it had been a positive day for the Australian market and other markets in the region off the back of President Xi’s commitment to open trade.
“The ability to trade with China becomes more agreeable,” Mr Lucas said.
“Mining and energy plays really picked up as he spoke.”