China regulator vows greater market access

President Xi Jinping on Tuesday promised to open China’s economy further and lower import tariffs, striking a conciliatory tone on the trade tensions between China and the US.

President Jinping’s statements were hailed by US President Donald Trump, who had sparked the “trade war” after levying increased tariffs on steel and aluminium from China.

China’s securities regulator said foreign investors would be allowed to trade a greater volume of shares on Chinese stock markets through existing programmes linking Hong Kong’s bourse with mainland exchanges, and also will “strive” to establish a similar link between Shanghai and London this year.

Last week, the Trump administration unveiled plans to impose tariffs on 1,300 Chinese products, worth about $50 billion a year in imports to the United States.

“The U.S., in the next round of tariffs, could start targeting goods that the Chinese do mostly produce themselves”, he said.

The current import duty in China on auto parts is 25 percent.

However, China was not willing to accede to a key USA demand-that it stop subsidizing the 10 high-tech industries targeted in the “Made in China 2025” program.

But Vice Commerce Minister Qian Keming said at the forum on Tuesday that China’s economic reforms were driven by domestic factors and not due to external pressures. The U.S. wants a rebalancing of trade flows between the two countries, and for China to stop “stealing” American intellectual property, he said.

Markets surged in response in Asia, Europe and also in the USA, where the Dow jumped 300 points before the opening bell Tuesday.

But such investment fell from $46.5 billion in 2016 to $29.7 billion in 2017, according to a report released Tuesday by the Rhodium Group and the National Committee on U.S. “The focus now shifts to the possible US response”, economists at Nomura said. Business interests are increasingly critical of China, but their willingness to accept the consequences of protracted confrontation with China is far from clear.

Washington accuses Chinese firms of stealing the trade secrets of United States companies and forcing them into joint ventures to acquire their technology – the crux of Trump’s current tariff threats against China. The overt message was that China will continue to gradually open up on its own terms, and the implicit message was that American firms may lose out on the benefits if President Trump pursues the trade war.

Many investors may leave China for Vietnam to avoid the high taxes, they said.

“If China doesn’t import goods from the United States it’s going to import them from other countries.in that sense the disputes between China and the United States could bring opportunities”, said Mr Jia.

“There’s a lot of political motivation in the tariffs in the U.S., but ultimately, they won’t want a trade war, there is a general desire to boost the USA economy”.

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

“Up to now China and the USA have not carried out negotiation at any level on the trade frictions”, he said, blaming the USA for not showing “sincerity” in its actions.

As of late October 2017, the US had poured $9.4 billion into Vietnam, ranking it 9th of the 100 countries and territories with investments in the Southeast Asian nation.