Rising trade tensions reflect that China is becoming less complementary to the U.S. and more directly competitive, according to David Loevinger, a former China specialist at the U.S. Treasury and now an analyst at fund manager TCW Group Inc.in Los Angeles.
Trump welcomed the speech and said he saw an end to the dispute, which has roiled markets since early last month. USA shares were also set to drift higher with the future for the Dow industrial average surging 1.1 percent to 24,279.
Xi pledged a “new phase of opening up” in his keynote address Tuesday to the Boao Forum for Asia. Beijing, the next day, said it would also place 25 per cent tariffs on $50 billion worth of United States imports, including in the aerospace sector where China has emerged as a key market for companies like Boeing.
QuickTake explainers on the trade war, Trump’s claim that China stole USA intellectual property and the 1962 law he cited for his steel tariffs.
China’s exports to the USA increased 14.8 percent from a year earlier in January-March period, spokesman Huang Songping told a briefing in Beijing, while imports from the US also rose 8.9 percent.
He promised to encourage “normal technological exchange” and “protect the lawful ownership rights of foreign enterprises”.
Xi’s conciliatory tone was welcomed by markets from Sydney to NY as a sign of easing trade tensions. “Going forward, we will reduce as soon as possible limits on foreign investment in these industries, automobiles in particular”, Xi said. It characterized those tariffs as a penalty for Beijing’s forcing American companies to hand over technology to gain entry to China’s market.
The Chinese president seemed to be addressing the concerns of US President Donald Trump, as the two countries grow closer by the day towards an all-out trade war. If that fails, China can ask for a ruling from a WTO panel. -China dialogues. In 2010 and 2012, for instance, China declared that foreign companies were free to decide for themselves when to share technology with Chinese partners or other businesses.
Technology companies, banks and industrial companies all rose Thursday as investors got ready for big banks to announce their first-quarter results and let go of some of their concerns about the trade dispute between the United States and China.
Foreign companies complain Beijing is squeezing them out of promising parts of the state-dominated economy to promote the ruling Communist Party’s plans to create Chinese global competitors in fields including robotics, electric cars and pharmaceuticals.
Xi gave no details on how conditions might change, leaving unclear how he intends to mollify Washington. Whenever there is more conciliatory talk about negotiating an agreement, markets rise. US stocks closed higher on Tuesday.
Chinese officials have been promising since at least 2013 to ease restrictions on foreign joint ventures in the auto industry, which would allow foreign firms to take a majority stake.
Likening investment environment to air, Xi said that only fresh air can attract more investment from the outside.
Xi Jinping’s commitment to open up China even more is already being put into action.
The Trump administration has said it is taking action as a crackdown on China’s theft of US intellectual property.
China vowed a harsh response to Trump’s latest threat, helping to spur a selloff that prompted the S&P 500 Index to fall 2.2 percent last Friday. “China imports just over 1 million cars into its 20 million-a-year-plus auto market”.
“Regardless of the extent of development, China will not subvert the current global system, nor will it seek to establish spheres of influence”, Xi said. “We will make great progress together!”, Trump said on Twitter.
But Trump himself – who has demonstrated repeatedly that he places a premium on his warm personal relationship with Xi – is less hardbitten than his own cabinet about the Chinese leadership’s empty pledges.