Xi reiterates vow to open up economy further, cut tariffs

April 10, 2018 15:32
Chinese President Xi Jinping delivers a speech at an annual meeting of the Boao Forum for Asia in Boao in Hainan province on Tuesday. Credit: Kyodo/via Reuters

China will open up its economy further and lower import tariffs on some products including cars, President Xi Jinping said on Tuesday, in pledges seen as a bid to defuse a trade row with the US.

In a speech at the Boao Forum for Asia, an annual summit that is held in Boao in Hainan province, Xi vowed to 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, Reuters reports.

"This year, we will considerably reduce auto import tariffs, and at the same time reduce import tariffs on some other products," Xi added.

China will sharply widen market access for foreign investors, he said, apparently responding to the chief complaint of the nation's trading partners and a point of contention for US President Donald Trump’s administration.

While most of Xi's pledges were reiterations of previously announced measures, for which foreign business groups say implementation is long overdue, Xi’s comments sent US stock futures, the dollar and Asian shares higher.

Chinese officials have been promising since at least 2013 to ease restrictions on foreign joint ventures in the auto industry, which would allow foreign companies to take a majority stake.

They currently are limited to a 50 percent stake in joint ventures, and are not allowed to establish wholly owned factories.

Xi’s renewed pledges to open up the auto sector come after Trump on Monday criticized China on Twitter for maintaining 25 percent auto import tariffs compared to the United States' 2.5 percent duties, calling such a relationship with China not free trade but "stupid trade".

In other remarks, the Chinese president said "Cold War mentality" and isolationism would "hit brick walls".

His speech did not specifically mention the United States or its trade policies, Reuters noted.

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," Jacob Parker, vice president of China operations at the US-China Business Council, told Reuters.

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