Xi Set for Landmark Economic Speech as Trump Trade Fight Simmers

Shares were mixed in Asia on Wednesday trading in a narrow range after overnight gains following conciliatory comments on trade

"With his speech, Xi is offering a solution to the Sino-U.S. trade dispute", said Yang Hai, strategist at Kaiyuan Securities, referring to the pledge to open up Chinese markets, including financial and auto sectors, while demanding fewer restrictions on Chinese purchases of high-tech products. He further added, "We encourage normal technological exchanges and cooperation between Chinese and foreign enterprises and protect the lawful [intellectual property] owned by foreign enterprises in China".

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.

During an eagerly awaited speech at a development conference on the tropical Chinese island of Hainan, Xi billed the planned cut in vehicle tariffs and a series of other measures as "a new phase of opening up".

Xi also said China would raise the foreign ownership limit in the automobile sector as soon as possible and push previously announced measures to open the financial sector.

China has pledged to "counterattack with great strength" if Trump decides to follow through on his latest threat to impose tariffs on an additional $100 billion in Chinese goods - after an earlier announcement that targeted $50 billion.

China would also crackdown on intellectual property violations, Xi promised.

Xi gave no details on how those conditions might change, leaving it unclear whether that might mollify Washington. -China Business Council, said.

China charges total duties of 25 percentage on most imported cars - a10 percent habits price plus a 15% auto taxation.

Shares were mixed in Asia on Wednesday trading in a narrow range after overnight gains following conciliatory comments on trade by Chinese Presiden

After remarks from his Chinese counterpart, Singaporean Foreign Minister Vivian Balakrishnan vowed to "double down" on free trade and economic liberalization in tandem with China.

The US, the world's largest economy, has a trade deficit of nearly Dollars 500 billion with China, the world's second largest economy.

Another blogger, under the name of "Leng Yan", pointed out that the argument that China can rely on Brazilian soybeans to replace US imports is faulty: Brazil, located in the southern hemisphere, harvests in early spring, while the United States harvests in late fall.

Larry Kudlow, President Donald Trump's top economic adviser, said China has "got to act like" a First World country.

Jonas Short, head of the Beijing office at Everbright Sun Hung Kai said the market reacted positively to Xi's speech because it was framed in more positive terms, without the increasingly combative rhetoric seen from both sides. "Xi's apparent desire to balance out his country's global payments is clearly great news for countries and companies selling goods to China". That can make a significant difference in developing countries, where the government often accounts for most sales of computer software, medical equipment and other high-value goods.

In his speech, the Chinese president sold a vision of China as a benevolent leader of the global economy, emphasizing that open systems are the best course of action for the world.

Xi sounded a conciliatory note toward neighbors with which Beijing has territorial disputes, saying China wants to pursue peaceful cooperative development. "Cold war thinking and zero-sum games are increasingly obsolete". "Arrogance or self-righteousness can only bump into walls at every turn".

Kansas Sen. Pat Roberts, Republican chairman of the Senate Agriculture Committee, suggested lawmakers may need to consider what he called a "Trump Tariff Payment" to compensate farmers if their crops face retaliation. And why is Trump targeting China?

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