Stocks jump as Xi calms jitters over US-China trade row

Chinese President Xi Jinping delivers a speech at an annual meeting of the Boao Forum for Asia in Boao in China. Mr Xi promised to open the country’s economy further and lower import tariffs on products including cars Kyodo  via Reuters

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 global cooperation against a backdrop of a spiraling dispute with Washington over trade and technology.

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 past year.

Chinese officials deny foreign companies are compelled to hand over technology, but business groups say joint venture and licensing rules make that unavoidable.

Earlier in the day, Trump tweeted about the "STUPID TRADE" with China, saying that when a Chinese-made vehicle is sent to the USA, the tariff is only 2.5 percent, while American cars exported to China are slapped with a 25 percent tariff.

"President Xi's speech could create a very good platform to launch U.S".

He also said "Cold War mentality" and isolationism would "hit brick walls". They now are limited to a 50 percent stake in joint ventures and can not establish their own wholly owned factories.

Tesla's chief executive Elon Musk has railed against an unequal playing field in China and wants to retain full ownership over a manufacturing facility the company is in talks with the Chinese government to build there.

In a tweet on Monday morning Trump says that when a Chinese-made vehicle is sent to the US, the tariff is only 2.5 percent, while American cars exported to China are slapped with a 25 percent tariff.

Trump's latest proposal intensified what was already shaping up to be the biggest trade battle in more than a half century.




Foreign business groups welcomed Mr Xi's commitment to reforms, including promises to strengthen legal deterrence on intellectual property violators, but said the speech fell short on specifics.

Although most of Xi's measures were previously announced, Asian markets and United States futures rallied. -China tariffs will explode into a full-scale trade war in a blow to global growth.

Xi, speaking at the Boao Forum for Asia in Hainan province, said that China will take measures to sharply widen market access for foreign investors, raise the foreign ownership limit in the automobile sector and protect intellectual property of foreign firms.

The bulk of Xi's 40-minute speech was devoted to China's vision for economic development and its global role following a ruling party congress in October that confirmed him as the most dominant Chinese leader since at least the 1980s.

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 Trump's "America first" calls for import restrictions and trade deals that are more favorable to the United States.

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 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 USA move to impose tariffs on $50 billion in Chinese goods. But things looked worse at the end of last week, when Trump threatened to impose tariffs on an additional $100 billion in Chinese goods. None of the announced duties have been implemented yet, offering room for negotiation. "This would be a victory for the world trading system and an important step away from the abyss of rising global protectionism".

Xi added that he hoped developed nations will remove barriers on high-tech exports to China; again, another key factor in the recent escalation in trade tensions with the US.

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