China’s Xi vows to keep economy open, warns against protectionism
Chinese President Xi Jinping pegged China as the pivot point for global free trade on Thursday, vowing to keep his “super-sized” economy open and warning against protectionism in a global economy eviscerated by the COVID-19 pandemic.
Buoyed by the signing of the world’s largest trade pact over the weekend, Xi said the Asia-Pacific is the ‘forerunner driving global growth’ in a world hit by “multiple challenges” including the coronavirus.
He vowed “openness” to trade and refuted any possibility of the “decoupling” of China’s economy -- in his only comments nodding to the hostile trade policy of Donald Trump’s US administration, which has battered China with tariffs and tech restrictions.
The Asia-pacific Economic Cooperation (APEC) forum, held online this year because of the coronavirus pandemic, brings together 21 Pacific Rim countries including the world’ s two biggest economies, accounting for about 60 per cent of global GDP.
It was not immediately clear if Trump, wounded by his election loss to Joe Biden, would take part in the summit or send a high level delegate in his place.
In a speech that veered into triumphalism over China’s economic “resilience and vitality” in coming back from the virus, which first emerged in the central city of Wuhan, Xi warned countries who insist on trade barriers will suffer self-inflicted wounds.
“Openness enables a country to move forward while seclusion holds it back,” he said.
“China will actively cooperate with all countries, regions and enterprises that want to do so. We will continue to hold high the banner of openness and co-operation.”
The high rhethoric may raise eyebrows in capitals where China has either restricted trade, imposed sudden blocks or used its giant economy as a bargaining chip in wider geopolitical plays.
In the APEC region, Australian exports including beef, wine and barley have been disrupted to their largest market, as diplomatic rumble over the orgins of the pandemic as well as alleged antics by each other’s spies hammer relations.
The APEC gathering comes a week ater China and 14 other Asia-pacific countries signed the world’s largest free-trade deal.
The regional comprehensive economic partnership (RCEP), which excludes the US, is viewed as a major coup for China and further evidence that Beijing is seting the agenda for global commerce as Washington retreats.
RCEP’S rival was the Trans-pacific Partnership -- championed by former Barack Obama -- but Trump pulled out of it and the pact has been replaced by a watered-down alternative that the United States has not joined.
Xi had no direct words for President-elect Biden, whose ascension to office next year -- while still clouded by Trump’s refusal to concede defeat - is seen as likely to see a more naunced extension of Washington’s current China policy.
China will continue to cut its tariffs and expand imports of high-quality goods and services, The Chinese President said, while vowing to push reforms and promote an innovation-driven growth model.
“We will further reduce tariffs and institutional costs..., and expand imports of high-quality products and services from all countries,” Xi said in a keynote speech delivered via video at the APEC CEO Dialogues, ahead of a leaders’ virtual summit on the future of international cooperation on Friday.
China will pursue higher quality growth through its “dual circulation” development model, driven by technological innovation, Xi said.
Xi also called for stronger policy coordination among international communities and said globalisation is “irreversible” and that China will not engage in “de-coupling”.
“Our new development patern is not a closed domestic single circulation, but an open and mutually promoting domestic and international dual circulation,” Xi said.
The “dual circulation” strategy envisages that China’s next phase of development will depend mainly on “domestic circulation” or an internal cycle of production, distribution and consumption, backed by domestic technological innovation.
Xi also said China will sign free trade pacts with more countries and will promote a high-quality Belt and Road initiative.
At a key meeting last month, Xi and other leaders laid out a blueprint for China’s five-year plan and key objectives for the next 15 years. They include a goal to turn China into a “high income” nation by 2025 and advance to a “moderately developed” nation by 2035.
Separately, China’s yuan dipped on Thursday, pulling back from near 29-month highs on dollar buying, but analysts and traders said they expected the currency’s appreciation to resume as rising expectations for easing weigh on the greenback. The soter yuan came despite a stronger fixing by the central bank. Before the market open, the People’s Bank of China set the midpoint rate of the yuan’s daily trading band at 6.5484 per dollar, its firmest level since June 26, 2018.
Buoyed by the signing of the world’s largest trade pact over the weekend, Chinese president said the Asia-pacific is the ‘forerunner driving global growth