Xi vows to open economy, cut tariffs as US trade row eases
MOST PROMISES BY CHINA PRESIDENT NOT NEW BUT COULD EASE TRADE STANDOFF FOR NOW
Chinese President Xi Jinping promised yesterday to open the country’s economy further and lower import tariffs on products including cars, in a speech seen as an attempt to defuse an escalating trade dispute with the United States.
While most of the pledges were reiterations of previously announced reforms, which foreign businesses complain are long overdue, Xi’s comments at the Boao Forum for Asia sent stock markets and the dollar higher on hopes of a compromise that could avert a trade war.
Xi said that China will sharply widen market access for foreign investors, a chief complaint of the country’s trading partners and a point of contention for US President Donald Trump’s administration, which has threatened billions of dollars in tariffs on Chinese goods.
Wall Street stocks jumped early yesterday. About 10 minutes into trading, the Dow Jones Industrial Average was up 1.7 per cent to 24,377.31.
The broad-based S&P 500 gained 1.3 per cent to 2,646.81, while the tech-rich Nasdaq Composite Index rose 1.3 per cent to 7,041.92.
Xi said China would raise the foreign ownership limit in the automobile, shipbuilding and aircraft sectors “as soon as possible”, and push previously announced measures to open the financial sector.
Auto import tariff cuts
“This year, we will considerably reduce auto import tariffs, and at the same time reduce import tariffs on some other products,” Xi said. He also said “Cold War mentality” and arrogance had become obsolete and would be repudiated.
His speech did not specifically mention the United States or its trade policies, which have been assailed by Chinese state media in recent days.
Foreign business groups welcomed Xi’s commitment to reforms, including promises to strengthen legal deterrence on intellectual property violators, but said the speech fell short on specifics.
“Ultimately US industry will be looking for implementation of long-stalled economic reforms, but actions to date have greatly undermined the optimism of the US business community,” said Jacob Parker, vice president of China operations at the US-China Business Council.
Jonas Short, head of the Beijing office at Everbright Sun Hung Kai, said the market was cheered by Xi’s speech because it was framed in more positive terms which could ease trade tensions, but he voiced caution about promised reforms.