China’s Xi positions himself globalisation champion at Boao forum

Chinese premier’s keynote address at the annual Boao business forum — often called Asia’s Davos — came amid ongoing trade tensions between Beijing and Washington.

business Updated: Apr 10, 2018 23:06 IST
China,Xi Jinping,globalisation
Xi did address some of the concerns raised by the US like protection of intellectual property rights and opening up China’s command economy but didn’t share specifics.(AFP)

President Xi Jinping on Tuesday pledged to open up China’s economy in sectors ranging from banking to auto manufacturing as he warned against a “Cold War mentality”, presenting an alternative vision to US President Donald Trump’s call for tariffs and restricted trade.

Xi’s keynote address at the annual Boao business forum on the Chinese island of Hainan – often called Asia’s Davos – also referred to enforcing the intellectual property rights (IPR) of foreign firms and lowering foreign-ownership limits on manufacturing.

The speech was seen as an attempt to place China – and Xi himself – as the champion of globalisation and gave enough indications that the US has abdicated that position.

“China’s reform and opening up will definitely succeed and a Cold War mentality, zero-sum thinking and isolationism are outdated,” Xi said. “Only by adhering to peaceful development and working together can we truly achieve win-win results.”

Speaking publicly for the first time since the escalation of trade tensions, Xi also opposed efforts to impose barriers to world trade, saying that “China’s door of opening up will not be closed and will only open up even wider”.

His comments buoyed global markets, under pressure since China and the US threatened each other with billion in tariffs amid worries of a full-fledged trade war that could hit global growth. Energy stocks gained as oil broke above $70 a barrel and European markets followed Asia with solid gains.

“This is a very important action by China. Avoiding a trade war will benefit all countries,” Elon Musk tweeted after Xi’s speech.

Last week, China had said it would fight trade protectionism and take “comprehensive countermeasures” hours after Trump directed his administration to consider $100 billion in additional tariffs on Chinese goods.

Xi’s speech, which didn’t mention Trump or the US by name, was seen by experts as more conciliatory and leaving the door open for negotiations on the tensions.

He addressed some of the concerns raised by the US, such as protection of IPR and opening up China’s economy but didn’t share specifics. There should be respect for “each other’s core interest and major concerns” and a new approach to state-to-state relations “featuring dialogue rather than confrontation”, he said.

“Putting oneself on a pedestal or trying to immunise oneself from adverse developments will get nowhere,” Xi said. “Humanity has a major choice to make between openness and isolation, and between progress and retrogression.”

Xi highlighted areas where China was willing to make concessions, including pledging to ease restrictions on imported cars by the end of the year, and repeating promises to give foreigners greater access to financial markets.

He said China has opened up manufacturing with a small number of exceptions on automobiles, ships and aircraft. China now plans to allow more access in these sectors, he added.

“These industries are now in a position to open up. Going forward, we will reduce as soon as possible limits on foreign investment in these industries, automobiles in particular,” he said.

IPR protection will boost the competitiveness of the Chinese economy, Xi said. “Stronger IPR protection is the requirement of foreign enterprises, and even more so of Chinese enterprises,” he said.

“We will enhance alignment with international economic and trading rules, increase transparency, strengthen property right protection, uphold the rule of law, encourage competition and oppose monopoly,” he added.

China, he said, would also accelerate the “opening up of the insurance industry, ease restrictions on the establishment of foreign financial institutions in China and expanding their business scope, and open up more areas of cooperation between Chinese and foreign financial markets”.

Xi also took a veiled swipe at Trump’s “America First” polices. “Paying attention only to one’s own community without thinking of others can only lead into a wall,” he said.

A White House official who watched a broadcast of Xi’s speech was quoted by Bloomberg as saying the Chinese president’s reference to automobiles following Trump’s Twitter complaints on the issue appeared to be an opportunity to develop trust. The official said the US is expecting China to put concrete proposals forward.

However, experts noted there are long-standing accusations that China violates trade rules and IPR. The speech also came as Xi tightens his grip over China’s political, social and economic life after the lifting of the two-term limit on the country’s presidency.

(With inputs from Agencies)

First Published: Apr 10, 2018 17:09 IST