Xi pledges to open China’s markets wider to an impatient world

November 5, 2018 (3 weeks ago)
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Xi pushed back at foreign pressure in comments clearly aimed at US President Donald Trump/AFP

, HANGHAI, China, Nov 5 – President Xi Jinping on Monday pledged to widen access to China’s economy, while delivering a veiled rebuke to Trumpism, as he kicked off an import expo amid growing foreign accusations that he was backtracking on grand promises to play fair on trade.

Xi said China would “step up” efforts to stimulate imports, lower tariffs, ease customs clearance procedures, and implement harsh punishments for intellectual property infringements, though he was light on specifics.

“It is our sincere commitment to open the Chinese market,” Xi said in an address opening the event in Shanghai.

China would “foster a world-class business environment” and its doors will open “ever wider”, he said.

But Xi also pushed back at foreign pressure in comments clearly aimed at Donald Trump and the trade war he launched between the world’s two largest economies.

Nations “should not just point fingers at others to gloss over their own problems”, Xi said, decrying “protectionism”, “isolationism” and “the law of the jungle”.

“They should not hold a flashlight in hand, doing nothing but highlighting the weaknesses of others and not their own.”

Beijing has touted the first annual China International Import Expo as a sign of its willingness to open its markets despite mounting criticism to the contrary and the worsening trade war with Washington, which has seen both sides impose punitive tariffs on hundreds of billions of dollars worth of goods.

Organisers say more than 3,000 foreign companies from 130 countries including the United States and Europe are present, including General Motors, Ford, Microsoft, Samsung, Walmart and Tesla.

Promise fatigue

It remained to be seen whether Xi’s latest promises would satisfy increasingly impatient trading partners.

In a speech at Davos nearly two years ago, he presented China as a beacon of globalisation, in a counterpoint to Trump.

But critics say Xi is yet to put his money where his mouth is and they are tired of empty promises.

Kenneth Jarrett, president of the American Chamber of Commerce in Shanghai, said the association welcomed the fresh promise to strengthen intellectual property protections.

But he said Xi’s latest comments came “with few specific solutions” and that the chamber wants to see the “rhetoric” match by actions.

“Now that it is the world’s second-largest economy, China can afford to open its doors all the way,” Jarrett said.

Foreign businesses complain about a range of policies that benefit local firms, requirements that foreign companies form joint ventures with Chinese partners, forced technology transfers, rampant intellectual property violations and restrictive red tape.

Foreign business surveys indicate the playing field is worsening as Xi champions a strong-China message not unlike Trump’s “America First” platform.

The event has drawn several foreign heads of government including Russian Prime Minister Dmitry Medvedev and Pakistani premier Imran Khan, though most are from small African or Asian countries dependent on China trade.

But Kenyan President Uhuru Kenyatta voiced impatience when he told the opening ceremony that his country’s growing trade with China was “heavily skewed” in Beijing’s favour.

“It is important for us therefore to correct the existing trade imbalance to enable a fair share of the benefits of trade,” he said.

IMF chief Christine Lagarde also said there remained “room for even greater reform” in China’s market.

US snub

China ranks 59th out of 62 countries on openness to foreign direct investment, according to an Organization for Economic Cooperation and Development ranking.

Xi has said the import expo proves China is willing to reduce its foreign trade surpluses.

But US officials say that approach amounts to China buying its way out of trouble with a short-term import surge rather than real change, and Washington snubbed the gathering by not sending high-level representation.

But the lure of China’s market remains strong and the US contingent includes even tech giants such as Facebook, which is blocked in China, and Google, which pulled out years ago over censorship and cyber-attacks.

Both are seen as eyeing new ways into China.

Experts say the week-long expo is also a message by China that, as the buying power of its 1.4 billion people grows, trading partners will need to work with Beijing if they want a piece of that import market.

Microsoft founder Bill Gates will join a business forum on Monday, but the touchy optics of attending the expo amid trade rancour resulted in few big-name American CEOs attending.

Trump, however, has in recent days raised hopes of a resolution to the trade spat, saying he was optimistic a deal could be reached soon.

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