Xi's speech shows China standing firm on trade

If Chinese President Xi Jinping is getting ready to make big concessions to the U.S., his much anticipated speech at a Shanghai trade fair didn’t show it.

Xi hit back against President Donald Trump’s “America First” policies Monday with some of his most pointed language yet, denouncing “law of the jun- gle” and “beggar-thy-neighbor” trade practices. At the same time, he didn’t outline any new proposals that would suggest he was prepared to meet Trump’s demands, such as halting forced technology transfers or rolling back support for state-owned enterprises. Stocks declined across Asia.

“All countries should strive to improve their business environment and solve their own problems,” Xi told the inaugural China International Import Expo, which featured more than 3,600 companies from 172 countries, regions and organizations. “They shouldn’t always whitewash themselves and blame oth- ers, or act like a flashlight that only exposes others, but not themselves.”

Xi stopped short of nam- ing Trump or the U.S. in the speech, his most high-profile economic address since April. Instead, he stepped up warnings that protec- tionism would harm global growth while pledging to boost domestic consumption, strengthen intellec- tual property protection and advance trade talks with Europe, Japan and South Korea.

While Trump has floated the possibility of a deal when he meets Xi in the coming weeks, the two sides remain far apart on resolving key U.S. complaints. Investors watching Xi’s speech for evidence that China was serious about accelerating its eco- nomic opening and wanted a quick resolution to the trade war were left underwhelmed.

“He repeated a lot of the planned policies we have already heard in the past few months,” said Sue Trinh, head of Asia FX Strategy at RBC Capital Markets in Hong Kong. “Markets seemed to like the headline ‘to cut import tariffs,’ but this plan was already announced in September and canonly be milked so many times.”

Although Xi pledged to import $30 trillion of goods over the next 15 years — up from$24 trillion in previous estimates — his policy ini- tiatives were largely in line with previous statements. The government has already cut tariffs this year and said it would do so again.

Enthusiasm wasn’t high in the run-up to the event. While 18 heads of state or government are slated to attend, virtually all are from small economies. Of G-20 countries, only Russia is send- ing a head of state or government.

Although the event was meant to gather foreign companies to woo Chinese con- sumers, global brands from Adidas to Walmart, Procter & Gamble to Uniqlo, were sending only country heads — or no senior executives at all. Starbucks Corp. CEO Kevin Johnson, whose company opens a store in China every 15 hours, won’t be attending even though he’ll be in the same city.

That didn’t dampen Xi’s efforts to cast himself as one of the world’s chief defend- ers of globalization, which he described as a “widen- ing road.” “As globalization deepens, the practices oflaw of the jungle and winner take all are a dead end,” Xi said.

Trump on Monday said the trade conflict with China could still go either way.

“We’re in a very big dispute with them right now, and we’re winning,” Trump said on a conference call with supporters the day before the midterm elections. China wants to make a deal, but if they don’t, that’s fine as well, he said.

Christine Lagarde, managing director of the International Monetary Fund, attended the Shanghai event and called on all parties to de-escalate tensions and“fix the global trade system, not destroy it.”

China ranks 59th out of the 62 countries evaluated by the Organization for Economic Cooperation and Development in terms of openness to foreign direct investment. Almost half of companies surveyed in June by the European Chamber of Commerce in China said they missed out on business opportunities due to regulatory barriers or market access restrictions, and they expected obstacles to increase during the next five years.

About 180 U.S. companies are sending representatives, including big names such as Google, Boeing, Caterpillar, Facebook, General Motors, Honeywell International, Microsoft, Tesla and Qualcomm.

Yet the U.S. government mostly stayed away, even though China said Trump voiced support for the expo in a call with Xi last week. A U.S. Embassy spokesperson said the Trump administration had no plans to send a high-level representative, adding that “China needs to make the necessary reforms to end its unfair trade practices that are harming the world economy.”