Markets rise as Xi calms fears over trade war

GLOBAL stock markets were spurred higher on Tuesday by Chinese President Xi Jinping, whose remarks have soothed worries over a trade conflict with the US, dealers said.

Frankfurt equities jumped 1 percent, London gained 0.4 percent and Paris won 0.7 percent in late morning deals in Europe. Across in Asia, both Hong Kong and Shanghai each surged 1.7 percent in value, while Tokyo piled on 0.5 percent.

In a closely watched speech at the Boao Forum – dubbed by many observers as the Asian Davos – Xi pledged a “new phase of opening up”, adding that Beijing “does not seek a trade surplus” and wants to boost imports.

Dealers pounced on the comments as a sign that a possible trade war between the world’s top two superpowers can be averted.

“Investors took this as an effort to calm the US-China war of words on trade . . . boosting hopes of a balanced outcome that avoids disruption to global growth,” said Accendo Markets analyst Michael van Dulken.

Investor sentiment has been rocked in recent weeks as the White House has announced a series of tariffs on Chinese goods as part of his “America First” agenda, fuelling fears of potentially devastating tit-for-tat measures that could hammer the global economy.

China’s massive surplus with the US is a key complaint of Trump’s who accuses the country of unfair trade practices that hurt American jobs.

His latest measures on Friday battered US stocks, though hopes the issue can be resolved saw Asia post gains on at the start of this week.

However, on Tuesday Xi said he would move to liberalise automobile investment, significantly reduce tariffs on cars this year and protect intellectual property – all areas that have been high on the list of demands by Washington.