Vow to open economy

BOAO/BEIJING, China – Chinese President Xi Jinping promised on Tuesday to open the country’s economy further and lower import tariffs on products like cars, in a speech seen as an attempt to defuse an escalating trade dispute with the United States.

While much of his pledges were reiterations of previously announced reforms that foreign businesses say are long overdue, Mr Xi’s comments sent stock markets and the US dollar higher on hopes of a compromise that could avert a trade war.

Mr Xi said China will widen market access for foreign investors, addressing a chief complaint of its 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.

Mr Trump struck a conciliatory tone in response to Mr Xi’s speech, saying in a post on Twitter that he was “thankful” for the Chinese leader’s kind words on tariffs and access for US automakers, as well as his “enlightenment” on the issue of intellectual property.

“We will make great progress together!” Mr Trump tweeted.

Washington charges that Chinese companies steal the trade secrets of American companies and force them into joint ventures to get hold of their technology, an issue that is at the center of Mr Trump’s current tariff threats.

The latest comments from both leaders appear to reinforce a view that a full-scale trade war can be averted, although there have been no talks between the world’s two economic superpowers since the US tariffs were announced.

“President Xi’s speech appears to have struck a relatively positive tone and opens the door to potential negotiations with the US in our view.

The focus now shifts to the possible US response,” economists at Nomura said.

“But of course actions speak louder than words.

“We will keep an eye on the progress of those opening-up measures.”

The speech at the Boao Forum for Asia in the southern province of Hainan had been widely anticipated as one of Mr Xi’s first major addresses in a year in which the ruling Communist Party marks the 40th anniversary of its landmark economic reforms and opening up under former leader Deng Xiaoping.