In a speech, Xi vowed to open China's economy further, protect intellectual property of foreign firms and criticized a "Cold War mentality" as obsolete, in his first public comments since the trade dispute with U.S. President Donald Trump's administration erupted.
After weeks of escalating trade tensions between China and the United States over import tariffs, Chinese leader Xi Jinping has finally capitulated to USA pressure. The Russell 2000 index of smaller-company stocks advanced 28.97 points, or 1.9 percent, to 1,543.43.
"China relied in the past on creating favourable policies for itself", Xi conceded.
Promising a "new phase of opening up", Xi told an economic forum on the southern island of Hainan that Beijing "does not seek a trade surplus" and hopes to increase imports. China also reportedly offered to open up financial services more rapidly and to give US firms access to the rapidly growing e-commerce market in China.
"There is little new in this speech, these broad promises have been made before, and none of them go to the real heart of the US angst over China", Bill Bishop, author of the Sinocism China Newsletter, explained to Axios. "Human history shows that openness leads to progress, while seclusion leaves one behind", he declared.
And then came China, with 1.3 billion people and a GDP of nearly $2.4 trillion when it joined the WTO in 2001.
A survey released in January by the American Chamber of Commerce in China found that American businesses still don't feel welcome in China. During a cabinet meeting, the US president said the United States would "probably" reach a deal with China including tax reciprocity and intellectual property protections.
Pantheon Economics said they continue to have reservations about the longer term "but the details heighten our conviction that China and the U.S. will produce a grand bargain and avert the imposition of any significant tariffs this year".
Whether Xi will make good on his words remains to be seen. "If there's any seriousness in China's position, it's time for Xi Jinping to put up or shut up".
Many investors may leave China for Vietnam to avoid the high taxes, they said. And the gesture toward reducing tariffs didn't come cost-free: "Xi clearly signaled that he expected Western countries to allow Chinese investment unimpeded access to sensitive high technology sectors", the Diplomatjudged.
The bulk of Xi's 40-minute speech was devoted to China's vision for economic development and its global role following a ruling party congress in October that installed him for a second five-year term as leader.
Shares on Wall Street jumped and the oil price bounced after a promise by President Xi of China to cut tariffs on imported cars eased fears of a trade war with America.
China claims the duties of 25 percent on imports of steel and 10 percent on imports of aluminum products breach global trade rules.
In reality, this is merely reiterating a Tweet (with some caps lock for emphasis) sent to President Trump over a month ago by Tesla CEO Elon Musk that criticized China for the same tactic. "But economists said Beijing responded in order to show it would defend itself", CNBC reported on Tuesday.
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