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Xi vows to further open China economy

Xi vows to further open China economy

Chinese President Xi Jinping pledged on Tuesday to take steps to further open the world's number two economy, indirectly addressing major complaints by the United States in a simmering trade row.

In his keynote address at the annual conference of the Boao Forum for Asia in Boao town of Hainan province in China, Xi promised a “new phase of opening up” and said that Beijing “does not seek a trade surplus” and hopes to increase imports.

He said China will take measures 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.

“Economic globalisation is an irreversible trend of the time,” Xi told the Boao Forum for Asia. "The door of China's opening up will not close, it will only open wider and wider.”

Xi pushed measures in areas that have been high on the list of US President Donald Trump's ire at China.

“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%,” Trump tweeted on Monday. “Does that sound like free or fair trade. No, it sounds like STUPID TRADE — going on for years!”

Without directly responding to Trump, Xi promised China would lower import tariffs for vehicles and other products, but he gave no details or an exact date for taking the measures.

Beijing's restrictions on foreign ownership in the auto sector have forced foreign companies to partner with Chinese firms and share their technology. Elon Musk, CEO of electric car giant Tesla asked for Trump's help on the issue this year, alluding to the troubles his firm has faced to producing in China.

Xi said those restrictions would be liberalised, pledging “to quickly relax restrictions on foreign shareholding, especially the restrictions on foreign investment in the automobile industry”.

Asia markets — hammered along with global equities by the trade row in recent weeks — rallied on the speech on Tuesday.

The threatened tariff war was spurred by a US Trade Representative investigation into China's intellectual property practices, which alleged wide-scale theft and forced technology transfers. Xi also pledged specific measures to address IP protection.

“This year, we will reorganise the State Intellectual Property Office to strengthen law enforcement,” he told the forum, an Asian version of the World Economic Forum, which draws global leaders to its annual meeting in the Swiss ski resort of Davos.

“We encourage Chinese and foreign companies to carry out normal technical exchanges and cooperation to protect the legitimate intellectual property rights of foreign-funded enterprises in China,” he said.

Pledges on autos and IP were accompanied by a promise to push through reforms in the financial services industry, which would open up to more foreign participation — reforms first announced last year. Xi also spoke of building a more welcoming investment environment for foreigners by strengthening the rule of law and increasing transparency.

But Chinese officials have promised many of the measures in the past with little action — Washington says it has grown tired of China's unfulfilled pledges, while the EU Chamber of Commerce in China summed up the exasperation last year as “promise fatigue”.

Xi's speech comes as the US and China have threatened tariffs on a large number of goods, bringing the world's two largest economies to the brink of a trade war.

The spat began earlier this year with the US's decision to tax imports of steel and aluminium, followed by planned levies on $50 billion worth of goods from China over what Washington says is theft of intellectual property and technology.

China retaliated by unveiling planned levies on $50 billion worth of major US exports, including soybeans, cars and aircraft. Trump then threatened to impose more tariffs on $100 billion worth of Chinese goods, prompting Beijing to warn that it would stand firm and punch back with great strength.

On Monday in Beijing, China's foreign ministry warned that trade talks with the US were “impossible” under current conditions.

Talking about the country's growth, Xi said over the past 40 years, China's GDP has averaged an annual growth rate of around 9.5 per cent.

He said Boao proposals have helped build consensus in Asia, encouraged cooperation, promoted economic globalization and advanced the building of a community with a shared future for mankind.

China did a commendable job for the eradication of economic crisis in Asia, he added.

In his address at the conference, Prime Minister Shahid Khaqan Abbasi said that Pak-China friendship is a bedrock of strategic stability, reported Radio Pakistan.

He said it is but natural for Pakistan to take the lead in partnering with China to usher in a new era of peace and prosperity through enhanced connectivity.

A new Asia is taking shape step by step, he said adding that the China-Pakistan Economic Corridor (CPEC) is fast reaching fruition. "It is an excellent example of an open, coordinated, and inclusive development paradigm that benefits all stakeholders," he said.

PM Abbasi said Pakistan has already begun reaping dividends of CPEC rail, road and infrastructure projects.

"Pakistan's economy is growing 6pc annually," he said, adding that the country will be among developed economies by 2050.

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