{"id":62775,"date":"2018-04-11T07:01:08","date_gmt":"2018-04-11T07:01:08","guid":{"rendered":"https:\/\/www.biphoo.com\/bipnews\/?p=62775"},"modified":"2018-04-11T07:01:08","modified_gmt":"2018-04-11T07:01:08","slug":"facing-trade-war-u-s-chinas-xi-renews-vow-open-markets-import","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/world-news\/facing-trade-war-u-s-chinas-xi-renews-vow-open-markets-import.html","title":{"rendered":"Facing trade war with U.S., China’s Xi renews vow to open markets, import more"},"content":{"rendered":"

Facing trade war with U.S., China’s Xi renews vow to open markets, import more<\/span><\/strong><\/h2>\n

President Xi Jinping renewed a pledge Tuesday to open China\u2019s markets further for trade and investment, including its automobile sector, and said he would also work harder to boost imports, in what was seen as a conciliatory speech amid an escalating trade conflict with the United States.<\/span><\/p>\n

Speaking at an annual economic forum 40 years after China began what is known as the \u201creform and opening up\u201d of its economy, Xi pledged to begin a new phase of that process. The Trump administration has threatened to impose tariffs on $150 billion in Chinese imports over allegations of unfair trade practices.<\/span><\/p>\n

But his speech was more a reiteration of existing commitments than any major new initiatives, and experts said it was neither concrete enough in itself, nor far-reaching enough, to defuse the trade dispute with Washington \u2014 especially after years of broken promises.<\/span><\/p>\n

Addressing several concerns raised by the U.S. administration and business community, Xi promised significantly lower import tariffs for vehicles, an easing of restrictions on foreign investment in autos and financial services, and greater protection for intellectual property.<\/span><\/p>\n

Only a few hours before, President Trump had tweeted about China\u2019s unfair 25 percent tariffs on car imports.<\/span><\/p>\n

Speaking at the Boao Economic Forum on the southern Chinese island of Hainan, Xi pledged to \u201csignificantly broaden market access\u201d for foreign companies, including a pledge to ease foreign equity restrictions in the automobile industry \u201cas soon as possible\u201d and \u201csignificantly lower import tariffs\u201d for vehicles.<\/span><\/p>\n

\u201cChina does not seek a trade surplus,\u201d Xi said. \u201cWe have a genuine desire to increase imports and achieve greater balance of international payments under the current account.\u201d<\/span><\/p>\n

Jake Parker at the U.S. China Business Council said Xi addressed some key concerns but fell short of offering \u201cparadigm-shifting announcements\u201d on ending the joint venture and licensing requirements that give China leverage to force technology transfer in return for market access.<\/span><\/p>\n

\u201cUltimately U.S. industry will be looking for implementation of long-stalled economic reforms,\u201d he said. \u201cLack of action to date has greatly undermined the optimism of the U.S. business community.\u201d<\/span><\/p>\n

On Tuesday, Trump thanked Xi on Twitter for his \u201ckind words on tariffs and automobile barriers\u201d and \u201chis enlightenment\u201d on intellectual property and technology transfers. \u201cWe will make great progress together!\u201d the president added.<\/span><\/p>\n

[The winners in Trump\u2019s trade war? This Indiana family. The losers? The same family.]<\/span><\/p>\n

China made a similar promise to cut auto tariffs in November when Trump visited Beijing, and again at the World Economic Forum in Davos, Switzerland, in January.<\/span><\/p>\n

U.S. officials have reacted with skepticism until now, saying it was time for action, not empty promises. Nevertheless, the fact that Xi made the commitment in a keynote speech at an important event, billed as China\u2019s version of Davos, gave the promise more weight.<\/span><\/p>\n

Alicia Garcia-Herrero, chief Asia Pacific economist at the Natixis investment banking firm in Hong Kong, said Xi\u2019s pledges were insufficient to resolve the trade dispute.<\/span><\/p>\n

And Christopher Balding, an associate professor of business and economics at the HSBC Business School in Shenzhen, said Xi\u2019s speech was largely a \u201cre-rerun of previous speeches and previous commitments.\u201d<\/span><\/p>\n

\u201cI suspect this is not going to go down as well with our friends in Washington as some people are hoping,\u201d he said.<\/span><\/p>\n

Balding said it would be hard to find a way out of the mounting trade conflict that would not leave either Trump or Xi, \u201cboth men with very large egos,\u201d feeling that he had backed down.<\/span><\/p>\n

China has consistently promised to further open its markets since Xi took office but has largely failed to follow through on those promises. It has also ignored years of entreaties from the U.S. administration and business community to level the playing field for foreign companies and resolve problems through dialogue and negotiation.<\/span><\/p>\n

While U.S. business leaders in China want to avoid a trade war, there is broad support for the idea that it is time to get tough with Beijing.<\/span><\/p>\n

Xi has made it clear that his vision for a \u201csocialist market economy\u201d is one where the Communist Party and state remain firmly in control, while protecting and subsidizing key industries. That approach, a fundamental bone of contention with Washington, is not about to change, experts said.<\/span><\/p>\n

Nevertheless financial markets were moderately encouraged.<\/span><\/p>\n

Only last week, global share prices had tumbled as Washington and Beijing traded threats to impose tens of billions of dollars of tariffs on each other\u2019s imports, in what was beginning to look like a high-stakes poker game.<\/span><\/p>\n

On Tuesday, at least, the talk was of tariff cuts, not hikes, and stocks took heart: Japan\u2019s main Nikkei share index ended 0.5 percent higher, while share indexes in Hong Kong and Shanghai recorded gains of 1.7 and 1.4 percent respectively.<\/span><\/p>\n

Rajiv Biswas, Asia-Pacific economist at IHS Markit, was among the optimists, arguing that Xi\u2019s speech \u201cset a very positive tone for lowering U.S.-China trade tensions\u201d and citing what he called some \u201cextremely constructive signals.\u201d<\/span><\/p>\n

The auto sector is one that Trump has highlighted as a concern.<\/span><\/p>\n

To set up factories in China, foreign car companies are forced into 50-50 joint ventures with Chinese companies, and many fear their valuable intellectual property will eventually find its way into Chinese cars. Vehicles imported from abroad face a 25 percent import tariff.<\/span><\/p>\n

\u201cWhen a car is sent to the United States from China, there is a Tariff to be paid of 2 1\/2%,\u201d Trump tweeted Monday. \u201cWhen a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade. No, it sounds like STUPID TRADE \u2014 going on for years!\u201d<\/span><\/p>\n

In his speech, Xi reiterated a long-standing promise to reduce restrictions on foreign investment in financial services, including banking, securities and insurance, and to strengthen protection for intellectual property, another of the U.S. administration\u2019s main complaints. He also announced that an International Import Expo would be held in Shanghai in November \u201cto open up the Chinese market.\u201d<\/span><\/p>\n

\u201cI wish to emphasize that with regards to all of those initiatives opening up that I have just announced, we have every intention to translate them into reality sooner rather than later,\u201d he said.<\/span><\/p>\n

\u201cWe want the outcomes of our opening up efforts to deliver benefits as soon as possible to all enterprises and people in China and around the world,\u201d he added.<\/span><\/p>\n

Xi also reiterated a call for developed nations \u2014 in other words, the United States \u2014 to ease restrictions on high-tech exports to China. That is not about to happen, with Washington citing national security concerns that such technologies would find their way into China\u2019s defense industry.<\/span><\/p>\n

More generally, Xi tried to portray China as a defender of globalization and openness, just as he did at Davos last year, ignoring the fact that many sectors of China\u2019s economy continue to restrict foreign trade and investment and that he presides over the largest system of Internet censorship in the world.<\/span><\/p>\n

\u201cWe live at a time with an overwhelming trend toward openness and connectivity. Human history shows that openness leads to progress while seclusion leaves one behind,\u201d Xi said. The process of \u201creform and opening\u201d of China\u2019s economy has been the driving force for decades of progress, innovation and development in his country, he added.<\/span><\/p>\n

\u201cI wish to make it clear to you all that China\u2019s door of opening up will not be closed and will only open even wider,\u201d he said.<\/span><\/p>\n

While he made no direct mention of the trade war with the United States, he said a \u201czero-sum\u201d and \u201cCold War\u201d mentality looks even more out of place than ever in the modern world.<\/span><\/p>\n

The People\u2019s Daily, the Communist Party mouthpiece, said China would never open its markets because of American pressure, but only for its own interests and at its own pace.<\/span><\/p>\n

\u201cOpening up to the outside world will not be at the expense of China\u2019s national interests,\u201d it wrote in a commentary after Xi\u2019s speech. \u201cNo one can expect that China today will open its doors in an uncontrolled and unprincipled manner, under pressure from outside.\u201d<\/span><\/p>\n

And in an ominous warning for Trump, it warned that market opening measures would not apply to those countries that violate the rules of the World Trade Organization and \u201cfrequently launch trade wars.\u201d<\/span><\/p>\n

On Tuesday, China officially filed a trade complaint against the United States with the World Trade Organization over the steel and aluminum tariffs.<\/span><\/p>\n

Source:-https:\/\/www.washingtonpost.com\/world\/chinas-president-pledges-to-reduce-investment-restrictions-tariffs-on-auto-industry\/2018\/04\/09\/e3012ffa-3c39-11e8-955b-7d2e19b79966_story.html?utm_term=.a08c2bf84d96<\/span><\/p>\n

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