China tempers hopes about US tariff truce
BEIJING—A truce in a U.S.-Chinese tariff war and Beijing' sp rom is es to open more of its state-dominated economy are raising investor hopes. But Beijing is trying to temper expectations, while companies express frustration over the halting pace of market-opening.
The China Daily, an Englishl anguage newspaper aimed at foreign readers, warned Tuesday the two sides have yet to put last week's agreement on paper after President Donald Trump suspended a planned tariff hike. In exchange, Trump said Beijing would buy up to $50 billion of American farm goods, a pledge China has yet to confirm.
“There is always the possibility that Washington may decide to cancel the deal if it thinks that doing so will better serve its interests,” said the newspaper. It called on the Trump administration to “avoid backpedaling.”
Business groups welcomed the truce as a possible step toward ending the costly, 15-month-old fight but said it was a small one. Talks broke down earlier after Trump accused Beijing of backsliding on promises Washington believed were locked in.
On Tuesday, a foreign ministry spokesman said Chinese importers have bought 20 million tons of soybeans and 700,000 tons of pork this year from the United States. He gave no details on when that happened.
China's imports of U.S. soybeans fell by about half last year to 16.6 million tons from 2017's 33 million tons.
“China will further speed up procurement of U.S. agricultural products,” said the spokesman, Geng Shuang.
Friday' s agreement coincided with China' s announcement of a timetable to carry out a 2017 promise
to abolish limits on foreign ownership of some finance businesses, starting with futures trading firms on Jan. 1. Securities firms and mutual fund managers follow later in the year.
Investors saw that as a commitment to freer trade. Chinese officials say it has nothing to do with the trade talks and isn' t a concession to Washington.
Over the past 18 months, President Xi J in ping' s government also has promised to allow full foreign ownership in banking, insurance and auto manufacturing in hopes of making its slowing economy more competitive and productive.
None addresses U.S. complaints that plans for government-led creation of Chinese competitors in robotics and other industries violate Beij in g' s market-opening commitment sand are based on stealing or pressuring companies to hand over technology.
Chinese marketopening initiatives follow a standard script. Authorities announce dramatic but vague promises that raise hopes abroad. Six months to a year passes while companies wait to see regulations. Many are dismayed when they impose costly licensing requirements or curbs on the size of a business.
Foreign companies are frustrated Beijing is moving so gradually 17 years after joining the free-trading World Trade Organization. China, the biggest global exporter, is widely seen as having benefited most from freer trade but faces complaints it violates the rules and spirit of the WTO by blocking access to its own markets and subsidizing Chinese competitors.
“China's opening- up process needs to move beyond piecemeal changes and instead embrace an absolute approach in which China goes from `increasingly open' to `open',” said Joerg Wuttke, the president of the European Union Chamber of Commerce in China.
Chinese leaders want foreign capital, skills and competition for an economy where huge but inefficient state companies still control industries including oil and gas, telecoms, banking, insurance and power generation.
Beijing wants more foreign involvement to help improve China's finance industry, said Lester Ross, a lawyer in Beijing for the firm WilmerHale.
“There is a lot of attractiveness” for foreign banks, insurers and other competitors in China' s fledgling market, he said.
Opening its own markets also gives Beijing leverage to ask the United States and other governments to let wholly Chinese-owned banks, insurance and other companies into their markets, Ross said.
Beijing allowed full foreign ownership of electric car producers starting last year.