Hong Kong: Asian markets rallied Tuesday 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 — he 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.
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China’s massive surplus with the US is a key complaint of Trump’s who accuses the country of unfair trade practices that hurt American jobs.
His latest measures on Friday battered US stocks, though hopes the issue can be resolved saw Asia post gains on at the start of this week.
But on Tuesday Xi said he would move to liberalise automobile investment, significantly reduce tariffs on cars this year and protect intellectual property — all areas that have been high on the list of demands by Washington.
The measures have been high on Trump’s list of grievances against China.
“Xi’s speech sends a positive signal to the market since he backs globalisation and the opening up of China market,” 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.”
Source: Brecorder
