China Attempts to Defuse Trade War
In stark contrast to Trump's bullying remarks, China’s Xi Promises to Ease Foreign Access.
In a speech that officials had billed as a major address, Mr. Xi said Tuesday that plans are under way to accelerate access to the insurance sector, expand the permitted business scope for foreign financial institutions and reduce tariffs on imported automobiles and ownership limits for foreign car companies.
Throughout his 40-minute address, Mr. Xi never mentioned the trade friction with the U.S. or President Donald Trump. His remarks seemed designed to offer some policy initiatives, if not concessions, while drawing a contrast with President Trump’s “America First” agenda and portraying China as a steady global partner committed to the international trade order.
“In a world aspiring for peace and development, the Cold War and zero-sum mentality look even more out of place.” Mr. Xi told the Boao Forum, a government-backed gathering of business and political leaders on the tropical island of Hainan.
“Putting oneself on a pedestal or trying to immunize oneself from adverse developments will get nowhere,” he said.
President Xi said China would increase imports, improve the protection of intellectual property and provide a more transparent, rule-based environment for foreign investment. He also pointed to Beijing’s announcement late last year that it would raise foreign-equity caps in the banking, securities and insurance industries, and promised those measures would be implemented.
“We have every intention to translate the measures into reality sooner rather than later, Mr. Xi said, though he didn’t provide a clearer timetable for those or the other measures announced.
The Financial Times does not think much of the speech.
Most of the measures he mentioned had been previously announced and the Chinese president offered no new details about when or how they would be implemented, increasing the chances that the world’s two largest economies could be embroiled in a trade war as soon as June.
Xi's speech may be meaningless chatter, but futures are up significantly once again.
If this rally attempt fails, a quick, deep plunge is likely.
Mike "Mish" Shedlock