Asian markets rally as Xi soothes fears of a China-US trade war

Mr Xi Jinping speaking at the Boao Forum for Asia Annual Conference, on April 10, 2018.
Mr Xi Jinping speaking at the Boao Forum for Asia Annual Conference, on April 10, 2018. PHOTO: BLOOMBERG
Chinese President Xi Jinping promises to open the country's economy further and lower import tariffs on products including cars, in a speech that struck a conciliatory tone amid rising trade tensions between China and the United States.

HONG KONG (AFP) - Asian markets rallied on Tuesday (Apr 10) after Chinese President Xi Jinping eased worries over a simmering US trade conflict by promising new measures to open his country's massive economy "wider and wider".

In a closely watched speech at the Boao Forum - dubbed the Asian Davos - Mr Xi pledged a "new phase of opening up", adding that Beijing "does not seek a trade surplus" and wants to boost imports.

After starting the day cautiously, dealers pounced on the comments as a sign that a possible trade war between the world's top two powers can be averted.

Markets have been roiled in recent weeks as the White House has announced a series of tariffs mostly on Chinese goods as part of his "America First" protectionist agenda, fuelling fears of potentially devastating tit-for-tat measures that could hammer the global economy.

China's massive surplus with the US is a key complaint of President Donald Trump's who accuses the country of unfair trade practices that hurt American jobs.

His latest measures last Friday battered US stocks, though hopes that the issue can be resolved saw Asia post gains on at the start of this week.

"Xi's speech sends a positive signal to the market since he backs globalisation and the opening up of China market," Mr Linus Yip, a strategist at First Shanghai Securities, told Bloomberg News.

"Investors were very worried about trade disputes, while his speech calms the nerves a lot. The concern about trade disputes in near-term are still here however, since what Xi pictures is a very long-term picture."

Shanghai climbed 0.5 per cent, Hong Kong jumped 0.9 per cent and Tokyo added more than 1 per cent by the break.

Sydney - where a number of firms are listed that rely on China trade - rose 0.8 per cent, Singapore put on 0.2 per cent and Seoul added 0.3 per cent.

There were also healthy gains in Wellington, Taipei and Indonesia.