Chinese President Xi Jinping renewed a pledge to open China's markets further for trade and investment, including in 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.
Speaking at annual economic forum 40 years after China began what is known as the "reform and opening up" of its economy, Xi pledged to begin a new phase of that process. The Trump administration has threatened to impose US$ 150 billion in tariffs on Chinese imports over allegations of unfair trade practices.
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 – especially after years of broken promises.
Addressing several of the concerns raised by the US 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. Only a few hours before, President Trump had tweeted about the China's unfair 25% tariffs on car imports.
"China does not seek a trade surplus," Xi said. "We have a genuine desire to increase imports and achieve greater balance of international payments under the current account."
Jake Parker at the US China Business Council said Xi had addressed some key concerns, but had fallen short of offering "paradigm-shifting announcements" on ending the joint venture and licensing requirements that give China leverage to force technology transfer in return for market access. "Ultimately, US industry will be looking for implementation of long-stalled economic reforms," he said. "Lack of action to date has greatly undermined the optimism of the US business community."
China made a similar promise to cut tariffs in November when Trump visited Beijing, and again at the World Economic Forum in Davos, Switzerland, in January. US officials have reacted with skepticism until now, saying it was time for action, not empty promises.
Alicia Garcia-Herrero, chief Asia Pacific economist at bankers Natixis in Hong Kong, said Xi's pledges were not concrete, immediate or far-reaching enough to defuse the trade dispute. And Christopher Balding, an associate professor of business and economics at the HSBC Business School in Shenzhen said Xi's speech was largely a "re-rerun of previous speeches and previous commitments."
While US 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.
Xi has made it clear that his vision for a "socialist market economy" is one where the Communist Party and state remain firmly in control, while protecting and subsidising key industries. That approach, a fundamental bone of contention with Washington, is not about to change, experts said.
"When a car is sent to the United States from China, there is a tariff to be paid of 2 1/2%," Trump tweeted Monday. "When 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 – going on for years!"
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's main complaints. He also announced that an International Import Expo would be held in Shanghai in November "to open up the Chinese market."
"I wish to emphasize that with regards to all those initiatives of opening up that I have just announced we have every intention to translate them into reality sooner rather than later," he said.
Xi also reiterated a call for developed nations – in other words the United States – to ease restrictions on high-tech exports to China. That's not about to happen, with Washington citing national security concerns that such technologies would find their way into China's defense industry.
China officially filed its trade complaint against the United States with the World Trade Organization over the steel and aluminum tariffs.