China's President Xi Jinping offers United States possible trade concessions

Dianna Christensen
April 10, 2018

President Xi Jinping has promised to cut auto import taxes, open China's markets and improve conditions for foreign companies in a speech that called for worldwide cooperation against a backdrop of a spiralling dispute with Washington over trade and technology.

Xi also said China would speed up opening up of its insurance industry, with Shanghai Securities News citing a government researcher after the speech saying foreign investors should be able to hold a controlling stake or even full ownership of an insurance company in the future.

Mr Xi tried to position China as a defender of free trade and cooperation, despite its status as the most-closed major economy, in response to Mr Trump's "America first" calls for import restrictions and trade deals that are more favourable to the United States.

Xi said China would 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.

Trump told advisers last week that he was unhappy with China's decision to tax $50 billion in American products, including soybeans and small aircraft, in response to a US move to impose tariffs on $50 billion in Chinese goods.

This was among the main complaints of the country's trading partners and a point of contention for US President Donald Trump's administration, which has threatened billions of dollars in tariffs on Chinese goods.

He also promised to encourage "normal technological exchange" and to "protect the lawful ownership rights of foreign enterprises".

Xi didn't mention Trump or the United States by name in his speech.

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"President Xi's speech appears to have struck a relatively positive tone and opens the door to potential negotiations with the our view".

Trump complained as recently as Monday about China's 25% tariff on foreign cars, pointing out that it's far higher than the 2.5% tariff the United States charges for imported cars. -China Business Council, which represents companies that deal with China, welcomed Xi's announcement but expressed hope for additional steps such as ending requirements for joint ventures and technology licensing.

The biggest beneficiaries of a cut in China's 25 percent tariff on most auto imports will be the handful of automakers such as electric vehicle brand Tesla that have no factory in China. "President Xi has ignited a rally in risk assets that might have some legs if the US can keep a lid on the protectionist rhetoric for a while", said Sean Callow, FX strategist for Westpac in Sydney. Other automakers such as General Motors and Volkswagen that assemble vehicles in China with local state-owned partners could offer additional models.

Trump has often slammed China's huge surplus in the trade of goods with the United States, which reached $375 billion past year, according to USA data.

But Vice Commerce Minister Qian Keming said at the forum on Tuesday that China's economic reforms were driven by domestic factors and not due to external pressures. "We have a genuine desire to increase imports and achieve a greater balance of worldwide payments".

"This is a problem caused by China, not a problem caused by President Trump", Kudlow said on "Fox News Sunday". "Cold war thinking and zero-sum games are increasingly obsolete". "Arrogance or self-righteousness can only bump into walls at every turn".

ENERGY: Benchmark U.S. crude rose 45 cents to $63.87 a barrel. China has pledged to "counterattack with great strength" if Trump decides to follow through on that threat.

Other reports by GlobalViralNews

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