Xi vows to further open up economy, protect IP rights

Prime Minister Lee Hsien Loong and Chinese President Xi Jinping at the Boao Forum for Asia. PM Lee said it is in China's interests to contribute more to strengthening multilateralism, in keeping with its larger weight in the world.
Prime Minister Lee Hsien Loong and Chinese President Xi Jinping at the Boao Forum for Asia. PM Lee said it is in China's interests to contribute more to strengthening multilateralism, in keeping with its larger weight in the world.PHOTO: LIANHE ZAOBAO

He says China sees economic globalisation as an irreversible trend; words calm markets

Chinese President Xi Jinping has pledged to open up Chinese markets further, even as his government parries with the United States over trade disagreements.

His conciliatory remarks included the promise of more protection for intellectual property rights and the prospect of lower tariffs. These are among the demands that Washington has been making on Beijing, as it threatens China with heavy tariffs of its own.

Mr Xi, however, indicated that China was taking this route simply because it sees economic globalisation as an "irreversible trend", though his words calmed stock markets spooked by the spectre of a trade war.

"I want to make clear to everyone that China's doors will not be closed, but will only be opened wider," Mr Xi said to applause from about 2,000 attendees at the opening ceremony of the Boao Forum for Asia yesterday.

He also took a swipe at US President Donald Trump's protectionist policy, saying "human history shows that openness leads to progress, while seclusion leaves one behind".

"In a world aspiring for peace and development, the Cold War mentality and zero-sum mentality look ever more out of place," he said.

GLOBAL CONSEQUENCES

China and the US have the most important bilateral relationship in the world. A trade war must damage these bilateral ties in many areas.
Surely it will make it much harder for the two countries to cooperate on climate change, non-proliferation, regional security and denuclearisation of the Korean peninsula.
None of these issues can be solved without the full participation of both countries.
And if the disputes escalate and destabilise US-China relations, the consequences for the world could be catastrophic. 

PRIME MINISTER LEE HSIEN LOONG, on the importance of China-US ties, in his speech at the Boao Forum for Asia.

"Putting oneself on a pedestal or trying to immunise oneself from adverse developments will get one nowhere."

Mr Xi went on to list some steps that China would take to open its doors further, to more applause from the audience.

Most of what he said was not new, but he gave more details of what would be done.

He elaborated on the promise to open up the car sector by reducing tariffs considerably this year, and raising the limit on foreign ownership of carmakers "as soon as possible". Premier Li Keqiang had first flagged the reduction of car tariffs last month at the annual parliamentary session.

Mr Xi also said the financial sector would be opened up, and intellectual property rights would be afforded more protection by significantly raising the cost for offenders.

The Chinese leader's remarks soothed markets on both sides of the Pacific. In the US, Nasdaq 100 futures gained 1.6 per cent and the Dow Jones Industrial Average climbed 1.2 per cent, reported Bloomberg. In Asia, Singapore's Straits Times Index rose 0.5 per cent, while the Nikkei Stock Average gained 0.54 per cent.

Some observers are cautious in their assessment of the situation.

"They are warming words," World Trade Organisation (WTO) chief economist Robert Koopman said at a session following Mr Xi's speech. He said this was important as China and the US have been exchanging words in the past few months that were not always positive.

However, he said, these are just words, and "we will have to follow the actions". And these could go either way, including a trade war.

Dr Koopman added that it was worrying that the exchange between the two sides was taking place outside the WTO system.

He said the system had an advantage of treating all members equally, whether big or small. Having members talking outside it or taking action that could be inconsistent with their WTO obligations "could undermine this system of equality in global economic relations".

Singapore's Prime Minister Lee Hsien Loong weighed in on the issue in his speech at the forum, warning against a trade war that could be damaging to US-China ties and catastrophic for the world.

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A version of this article appeared in the print edition of The Straits Times on April 11, 2018, with the headline 'Xi vows to further open up economy, protect IP rights'. Print Edition | Subscribe