Chinese President Xi Jinping hit back against protectionist trade practices advocated by U.S. President Donald Trump in a speech in which he also pledged to further cut import tariffs and open his country’s markets.
In a veiled reference to the tariffs Trump has leveled against his country’s exports, Xi told the inaugural China International Import Expo on Monday that “the practices of beggar-thy-neighbor” would lead to global stagnation. He said China would continue to promote globalization and pledged to boost domestic consumption, strengthen intellectual property enforcement and advance trade talks with Europe, Japan and South Korea.
“As globalization deepens, the practices of law of jungle and winner take all are a dead end,” Xi told the gathering in Shanghai, which featured more than 3,600 companies from 172 countries, regions and organizations. “Inclusion and reciprocity, win-win and mutual benefits are a widening road.”
Xi’s speech had been closely watched for new measures that would show China was serious about opening its economy quickly as investors look for signs of a possible resolution to a trade war between the world’s two biggest economies. But he said little that would indicate a breakthrough is coming any time soon, contributing to a slump in the yuan as Asian stocks retreated.
“He repeated a lot of the planned policies we have already heard in the past few months,” said Sue Trinh, head of Asia FX Strategy at RBC Capital Markets in Hong Kong. “Markets seemed to like the headline ‘to cut import tariffs,’ but this plan was already announced in September and can only be milked so many times.”
While Xi pledged to import $30 trillion of good over the next 15 years — up from $24 trillion in previous estimates — his policy initiatives were largely in line with previous statements. The government has already cut tariffs this year and said it would do so again.
Xi also didn’t reveal any further details about China’s plans for further stimulus measures to support the slowing economy, which were flagged last week. He did say, however, that stimulus already announced was being seen in the economy. He also said China would further develop Hainan as a free-trade port, prompting shares of companies based in the southern province to jump.
Enthusiasm wasn’t high in the run-up to the event. While 18 heads of state or government are slated to attend, virtually all are from small economies. Of G-20 countries, only Russia is sending a head of state or government.
There’s also a notable dearth of top business chiefs. Although the event is meant to gather foreign companies to woo the Chinese consumer, global brands from Adidas to Walmart, Procter & Gamble to Uniqlo, are sending only country heads — or no senior executives at all. Starbucks Corp. CEO Kevin Johnson, whose company opens a store in China every 15 hours, won’t be attending even though he’ll be in the same city.
China is under pressure from Trump and elsewhere to wind back its $423 billion goods trade surplus with the world, and Xi has already pledged that the country will import $24 trillion dollars of goods from abroad over the next decade and a half. While Trump has floated the possibility of a deal when he meets Xi in the coming weeks, they remain far apart on market access and government support for state-run enterprises.
While Xi didn’t mention Trump or the U.S. by name, the trade conflict was a clear theme in his remarks.
“All countries should strive to improve their business environment and solve their own problems,” Xi said. “They shouldn’t always whitewash themselves and blame others, or act like a flashlight that only exposes others but not themselves.”
Trump, who has in recent days expressed optimism about cutting a deal with China, touted his approach toward the country during a campaign rally in Tennessee shortly before Xi’s speech. “We’ve taken the toughest-ever action to crack down on China’s abusive trade practices. We’re doing very well,” Trump said.
China ranks 59th out of the 62 countries evaluated by the Organization for Economic Cooperation and Development in terms of openness to foreign direct investment. Almost half of companies surveyed in June by the European Chamber of Commerce in China said they missed out on business opportunities due to regulatory barriers or market access restrictions, and they expected obstacles to increase during the next five years.
About 180 U.S. companies are sending representatives, including big names such as Alphabet Inc.’s Google, Boeing Co., Caterpillar Inc., Facebook Inc., General Motors Co., Honeywell International Inc., Microsoft Corp., Tesla Inc. and Qualcomm Inc.
Yet the U.S. government mostly stayed away, even though China said Trump voiced support for the expo in a call with Xi last week. A U.S. Embassy spokesperson said the Trump administration had no plans to send a high-level representative, adding that “China needs to make the necessary reforms to end its unfair trade practices that are harming the world economy.”
“It seems like there were good statements and good headlines, but what we want are concrete actions and a concrete timetable of reform,” said Carlo Diego D’Andrea, the Shanghai chairman for the European chamber. “We can’t let the CEOs of European companies in China to set up their businesses on a foundation of hope that reform will come.”