Recycling is popular in Chinese economic and trade policy and so is conning investors.
How? Well, Chinese President Xi Jinping yesterday pledged to reduce tariffs on foreign cars sold in China, apparently meeting a key trade demand from US President Donald Trump.
The offer was one of a group of market opening measures outlined by Xi, which were revealed in a much anticipated keynote speech at the Boao Forum, considered by many the Davos economic forum of Asia.
Im fact it sounded very much like the speech he made at the real Davos in Switzerland in January 2017
President Xi said China would also reduce restrictions on foreign investment in automotive and aircraft manufacturing. But Chinese government officials first proposed greater financial sector liberalisation and easing the 50% foreign ownership limit on automotive joint ventures in November, just after US president Donald Trump ended his first visit to China.
Mr Xi, on Tuesday gave no details about the proposed tariff reduction, which the Financial Times pointed out has been previously touted by Chinese government officials.
Mr Xi also outlined a “four-point plan” consisting what the FT and other media said was mostly of previously announced initiatives, such as the liberalisation of selected financial sectors and an easing of limits on foreign investment in China’s auto sector.
Reuters said “The speech at the Boao Forum for Asia in the southern province of Hainan had been widely anticipated as one of 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."
Xi’s speech sent markets in Asia, Europe and the US higher, though investors there were wary about the raid on the New York offices and home of President Trump’s lawyer, Michael Cohen.
The speech in fact turned around markets and pushed those in Asia and Europe into the green after futures and early dealings had noted losses.
President Xi through the challenge back on the US and President Trump by calling on the Americans to drop its push for restrictions on Chinese high technology products – a reference to mooted bans by Washington on high tech products and technology (mobile telephony for example).
“China does not seek trade surplus,” Xi said. China had a “genuine desire” to expand its imports from the US this year and would significantly lower import tariffs for cars and other products.
“We will work hard to import more products than are competitive and needed by our people.”
Cutting the 25% tariff on American cars was a major demand from Washington, as Trump ramped up his threat to impose tariffs on $US150 billion of Chinese imports
But China had retaliated last week by threatening to slap a further 25% tariff on American cars, among other suggested moves/
In his first public speech since the outbreak of trade conflict with the US, Xi positioned China as a champion of multilateral trade and said the world was a global village where economic development was increasingly interconnected.
“Self importance or concern only for oneself can only bring trouble,” he said.
Xi said China would ensure measures announced last year – to broaden market access to banking, securities and insurance and to raise the foreign equity cap for financial services firms – would materialise.
He said the opening up of the insurance industry would be accelerated.
Chinese manufacturing had basically been liberalised with the exception of automobiles, ships and aircraft, he said.
“Now that these industries have the foundation for opening up, the next step is to relax restrictions on foreign shareholdings, especially the restrictions on foreign investment in the automobile industry,” he said.
Xi said opening China’s financial sector would make it more competitive. He said China’s decision to open up further was driven by its own need for development.
But he also made a demand of the US: “We hope developed countries will stop imposing restrictions on normal and reasonable trade of high-tech products and relax export controls on such trade with China.”
