Published: Tue, April 10, 2018
Markets | By Noel Gibbs

China's president offers USA possible trade concessions

China's president offers USA possible trade concessions

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

-China trade dispute. While President Donald Trump continued to bash America's trade deals on Twitter, he said the USA and China could settle their dispute. But numerous steps he outlined are ones Beijing has already proposed in some form.

In an attempt to reduce the trade imbalance between the two nations, the United States has proposed tariffs on $US150 billion in Chinese imports entering the country, accounting for around 6.6% of China's total exports a year ago. "Today's message from Xi contained nothing really new but it seemed like a conciliatory tone and so the market is just grabbing at that", said Peter Garnry, head of equity strategy at Saxo Bank in Copenhagen.

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. "Avoiding a trade war will benefit all countries", Musk tweeted after Xi's speech. His says, "No, it sounds like STUPID TRADE".

China's President Xi Jinping delivers his opening speech at the Boao Forum for Asia Annual Conference in Boao in south China's Hainan province, Tuesday, April 10, 2018.

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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.

The president's speech is being seen as an attempt to defuse an escalating trade dispute with the US.

But other analysts said Xi's remarks could help lay the groundwork for a compromise. Hu predicted that the current US-China clash over trade would eventually end with some kind of concessions from Beijing.

Based on wire headlines from Reuters, Xi made all the right noises when it came to the outlook for Chinese trade policy, helping to calm investor nerves that have been rattled over the past month as trade tensions between the United States and China increased. But he stressed the need for tackling problems through dialogue rather than confrontation, warning against adopting a "Cold War mentality". The U.S. Treasury Department is working on plans to restrict Chinese technology investments in the U.S. And there is talk that the U.S. could also put limits on visas for Chinese who want to visit or study in this country.

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.

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Such pledges might help, Rajiv Biswas of IHS Markit said in a report.

The new White House economic adviser, Larry Kudlow, said Sunday that a "coalition of the willing" - including Canada, much of Europe and Australia - was being formed to pressure China and that the US would demand that the World Trade Organization, an arbiter of trade disputes, be stricter on Beijing.

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

"These measures are based on our consistent policy and stance, our own development and our own pace", read a commentary published online by the People's Daily, the official newspaper of the ruling Communist Party.

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